Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 11, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | Virtual Learning Company, Inc. | |
Entity Central Index Key | 1,518,336 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 23,226,667 | |
Trading symbol | VLCI | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,016 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
CURRENT ASSETS | ||
Cash | $ 61,193 | $ 2,298 |
Accounts receivable | 55,245 | |
Total current assets | 116,438 | 2,298 |
OTHER ASSETS | ||
Capitalized curriculum development costs | 28,234 | 51,334 |
Total assets | 144,672 | 53,632 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 60,688 | 16,140 |
Billings in excess of costs and estimated earnings | 56,997 | |
Convertible Notes Payable, net of unamortized debt discounts of $ 0 and $ 4,166, respectively, and accrued interest | 63,497 | 53,706 |
Loans payable to related parties | 16,408 | 14,525 |
Total current liabilities | 197,590 | 84,371 |
STOCKHOLDERS’ DEFICIENCY | ||
Preferred stock; 5,000,000 shares authorized, $.001 par value, as of September 30, 2016 and December 31, 2015, there are no shares outstanding | ||
Common stock; 70,000,000 shares authorized, $.001 par value, as of September 30, 2016 and December 31, 2015, there are 23,066,667 and 16,304,300 shares outstanding | 23,067 | 16,304 |
Additional paid-in capital | 1,321,251 | 1,305,513 |
Accumulated deficit | (1,397,236) | (1,352,556) |
Total stockholders’ deficiency | (52,918) | (30,739) |
Total liabilities and stockholders’ deficiency | $ 144,672 | $ 53,632 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Convertible notes payable, net of unamortized debt discounts | $ 0 | $ 4,166 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, shares authorized | 70,000,000 | 70,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares outstanding | 23,066,667 | 16,304,300 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenue: | ||||
Construction contracts | $ 58,977 | $ 58,977 | ||
Educational software and products | 20 | 21 | 75 | |
Total revenue | 58,977 | 20 | 58,998 | 75 |
Cost of construction contracts | 41,339 | 41,339 | ||
Gross profit | 17,638 | 20 | 17,659 | 75 |
Operating Expenses: | ||||
Selling, general and administrative, including issuance of common stock for legal services of $ 2,500, $40,000, $ 2,500 and $0 respectively | 21,507 | 9,265 | 32,006 | 76,437 |
Amortization of capitalized curriculum development costs | 7,700 | 8,200 | 23,100 | 24,600 |
Total operating expenses | 29,207 | 17,465 | 55,106 | 101,037 |
Loss from operations | (11,569) | (17,445) | (37,447) | (100,962) |
Other expenses (income): | ||||
Amortization of debt discounts | 12,500 | 4,166 | 36,666 | |
Interest expense | 1,875 | 1,878 | 5,625 | 5,038 |
Consulting fee income | (2,558) | |||
Total other expenses-net | 1,875 | 14,378 | 7,233 | 41,704 |
Net loss | $ (13,444) | $ (31,823) | $ (44,680) | $ (142,666) |
Basic and diluted earnings (loss) per common share | $ 0 | $ (.00) | $ (.00) | $ (.01) |
Weighted average common shares outstanding-basic and diluted | 19,234,659 | 16,304,250 | 17,281,086 | 16,236,500 |
Consolidated Statements of Ope5
Consolidated Statements of Operations (Parenthetical) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||||
Issuance of common stock value for legal services | $ 2,500 | $ 0 | $ 2,500 | $ 40,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
OPERATING ACTIVITIES | ||
Net loss | $ (44,680) | $ (142,666) |
Adjustments to reconcile net loss to net cash provided (used) in operating activities: | ||
Amortization of capitalized curriculum development costs | 23,100 | 24,600 |
Amortization of debt discounts | 4,166 | 36,666 |
Issuance of common stock for legal services | 2,500 | 40,000 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (55,245) | |
Accounts payable and accrued expenses, including accrued interest relating to convertible notes payable of $5,625 and $5,038, Respectively | 50,174 | 13,038 |
Billings in excess of costs and estimated earnings | 56,997 | |
Net cash provided (used) in operating activities | 37,012 | (28,362) |
INVESTING ACTIVITIES | ||
Property and equipment | ||
FINANCING ACTIVITIES | ||
Proceeds from Convertible notes payable | 10,000 | |
Proceeds from sale of common stock | 1,100 | |
Proceeds from loans payable to related parties | 24,883 | |
Repayments of loans payable to former chief executive officer who died in April 2016-net | (3,000) | (6,668) |
Net cash provided by financing activities | 21,883 | 4,432 |
NET INCREASE (DECREASE) IN CASH | 58,895 | (23,930) |
CASH BALANCE, BEGINNING OF PERIOD | 2,298 | 26,773 |
CASH BALANCE, END OF PERIOD | 61,193 | 2,843 |
Supplemental Disclosures of Cash Flow Information: | ||
Interest expense paid | ||
Income taxes paid | ||
Non-Cash Investing and Financing Activities: | ||
Newly Acquired Construction Business (Note 1): Issuance of 2,225,000 restricted shares of common stock for investment in Dream Homes Ltd. | ||
Issuance of 2,287,367 restricted shares of common stock for rights to 6 construction contracts of Dream Homes Ltd. | ||
Issuance of 2,000,000 restricted shares of common stock in satisfaction of loans payable to General Property Investments LLC (see Note-6) | 20,000 | |
Issuance of common stock in connection with the sale of Convertible notes payable charged to debt discounts | 50,000 | |
Cancellation of common stock issued in 2009 for capitalized curriculum development costs | $ (4,333) |
Consolidated Statements of Cas7
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Statement of Cash Flows [Abstract] | ||
Accounts payable and accrued expenses, accrued interest relating to convertible notes payable | $ 5,625 | $ 5,038 |
Issuance of common stock for investment in Dream Homes Ltd | 2,225,000 | 2,225,000 |
Issuance of common stock restricted shares for rights to construction contracts | 2,287,367 | 2,287,367 |
Issuance of common stock restricted shares in satisfaction of loans | 2,000,000 | 2,000,000 |
Significant Accounting Policies
Significant Accounting Policies and Basis of Presentation | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies and Basis of Presentation | Note 1 - Significant Accounting Policies and Basis of Presentation Basis of Presentation The accompanying unaudited 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 and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they may 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 unaudited interim financial statements should be read in conjunction with the Company’s Annual Report filed on Form 10-K for the year ended December 31, 2015, which contains the audited financial statements and notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations, for the year ended December 31, 2015. Nature of Operations The Virtual Learning Company, Inc. (“Virtual Learning”) was incorporated on January 6, 2009 as a Nevada corporation with 75,000,000 shares of capital stock authorized, of which 70,000,000 shares are common shares ($.001 par value), and 5,000,000 shares are preferred shares ($.001 par value). Virtual Learning has been a subscription based software as a service (“SaaS”) provider of education products. Virtual Learning provides standards-based instruction, practice, assessments, and productivity tools that improve the performance of educators and students via proprietary web-based platforms at www.mathisbasic.com, www.scienceisbasic.com and www.readingisbasic.com. Virtual Learning is also a producer of a series of practice workbooks published on CD, DVD formatted disc and USB Drives and in the ePub format which have been offered for sale through Barnes and Noble’s Nook and Amazon’s Kindle since 2012. Newly Acquired Construction Business On August 19, 2016, Virtual Learning acquired 4.5% of Dream Homes,Ltd. (“DHL”), 100% of Dream Building, LLC (“DBL”) , a wholly owned subsidiary of DHL, and use of all construction licensing and registrations held by Atlantic Northeast Construction LLC (“ANCL”), a wholly owned subsidiary of DHL, in exchange for the issuance of 2,225,000 restricted shares of Virtual Learning common stock to DHL at an agreed price of $.05 per common share. The majority stockholder and chief executive officer of DHL is also the controlling stockholder and chief executive officer of Virtual Learning. As Virtual Learning and DHL were entities under common control, the acquired assets were reflected by Virtual Learning at DHL’s $0 carrying amount on the date of transfer pursuant to Accounting Standards Codification (“ASC”) 805-50-30-5. From August 19, 2016 to August 23, 2016, Virtual Learning acquired the rights to complete 6 in process construction contracts of ANCL in exchange for the issuance of 2,287,367 restricted shares of Virtual Learning common stock to DHL at an agreed price of $.05 per common share for those ANCL contracts. As Virtual Learning and DHL were entities under common control, the acquired rights were reflected at DHL’s $0 carrying amount on the date of transfer pursuant to ASC 805-50-30-5. Going Concern Uncertainty These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. These standards contemplate continuation of Virtual Learning as a going concern. As of September 30, 2016, Virtual Learning had $61,193 cash and negative working capital of $81,152. For the nine months ended September 30, 2016 and 2015, Virtual Learning had revenues of $58,998 and $75, respectively, and sustained net losses of $44,680 and $142,666, respectively. These factors raise substantial doubt about Virtual Learning’s ability to continue as a going concern. Virtual Learning has also unamortized capitalized stock-based and contributed curriculum development costs of $28,234 as of September 30, 2016. The recovery of these asset costs and continuation of future operations will be dependent upon Virtual Learning’s ability to obtain additional debt or equity capital and its ability to generate revenues sufficient to continue pursuit of its business purposes. Virtual Learning is actively seeking financing to fund future operations. Virtual Learning is subject to a number of risks similar to those of other development stage enterprises. These risks include, but are not limited to, rapid technological change, dependence on key personnel, competing new product introductions and other activities of competitors, the successful development and marketing of its products, and the need to obtain adequate additional capital necessary to fund future operations. There is no assurance that Virtual Learning can reverse its operating losses, or that it can raise additional capital to allow it to continue its planned future operations. These factors raise additional substantial doubt about Virtual Learning’s ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability of recorded asset amounts that might be necessary from an unfavorable resolution of this uncertainty. Principles of Consolidation The consolidated financial statements include the accounts of Virtual Learning and its wholly owned subsidiary DBL (collectively, the “Company”). All intercompany balances and transactions have been eliminated in consolidation. Property and Equipment Property and equipment is stated at cost less accumulated depreciation. Depreciation is provided using the straight-line method over an estimated useful life of five years. Repairs and maintenance costs are expensed as incurred, and renewals and betterments are capitalized. 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 amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. Cash and Cash Equivalents All liquid investments with stated maturities of three months or less from date of purchase are classified as cash equivalents; all liquid investments with stated maturities of greater than three months are classified as short-term investments. Fair Value of Financial Instruments Fair value is defined as the price that we would receive to sell an asset or pay to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. In determining fair value, GAAP establishes a three-level hierarchy used in measuring fair value, as follows: ● Level 1 inputs are quoted prices available for identical assets and liabilities in active markets. ● Level 2 inputs are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets and liabilities in active markets or other inputs that are observable or can be corroborated by observable market data. ● Level 3 inputs are less observable and reflect our own assumptions. Our financial instruments consist of cash and cash equivalents, receivables, accounts payable and accrued expenses and convertible notes payable and accrued interest. The carrying amount of cash and cash equivalents, receivables and accounts payable and accrued expenses approximates fair value because of their short maturities. The carrying value of the convertible notes payable and accrued interest approximates fair value based on the value of comparable financial instruments with similar terms. We may adjust the carrying amount of certain nonfinancial assets to fair value on a non-recurring basis when they are impaired. No such adjustments were made for the nine months ended September 30, 2016 and 2015. Construction Contracts Revenue recognition: The Company and its affiliated entities recognize construction contract revenue using the percentage-of-completion method, based primarily on contract cost incurred to date compared to total estimated contract cost. Cost of revenue includes an allocation of depreciation, amortization and general overhead cost. Changes to total estimated contract cost or losses, if any, are recognized in the period in which they are determined. The Company generally provides limited warranties for work performed under its construction contracts with periods typically extending for a limited duration following substantial completion of the Company’s work on a project. The Company classifies construction-related receivables and payables that may be settled in periods exceeding one year from the balance sheet date, if any, as current assets and liabilities consistent with the length of time of its project operating cycle. For example: ● Costs and estimated earnings in excess of billings represent the excess of contract costs and profits (or contract revenue) over the amount of contract billings to date and are classified as a current asset. ● Billings in excess of costs and estimated earnings represent the excess of contract billings to date over the amount of contract costs and profits (or contract revenue) recognized to date and are classified as a current liability. Costs and estimated earnings in excess of billings result when either: 1) costs are incurred related to certain claims and unapproved change orders, or 2) the appropriate contract revenue amount has been recognized in accordance with the percentage-of-completion accounting method, but a portion of the revenue recorded cannot be billed currently due to the billing terms defined in the contract. Claims occur when there is a dispute regarding both a change in the scope of work and the price associated with that change. Unapproved change orders occur when there is a dispute regarding only the price associated with a change in scope of work. For both claims and unapproved change orders, the Company recognizes revenue, but not profit, when it is determined that recovery of incurred cost is probable and the amounts can be reliably estimated. Change in Estimates: The Company’s estimates of contract revenue and cost are highly detailed and many factors change during a contract performance period that result in a change to contract profitability. These factors include, but are not limited to, differing site conditions: availability of skilled contract labor: performance of major material suppliers and subcontractors: on-going subcontractor negotiations and buyout provisions: unusual weather conditions: changes in the timing of scheduled work: change orders: accuracy of the original bid estimate: changes in estimated labor productivity and costs based on experience to date: achievement of incentive-based income targets: and the expected, or actual, resolution terms for claims. The factors that cause changes in estimates vary depending on the maturation of the project within its lifecycle. For example, in the ramp-up phase, these factors typically consist of revisions in anticipated project costs and during the peak and close-out phases, these fators include the impact of change orders and claims as well as additional revisions in remaining anticipated project costs. Generally, if the contract is at an early stage of completion, the current period impact is smaller than if the same change in estimate is made to the contract at a later stage of completion. Management focuses on evaluating the performance of contracts individually and uses the cumulative catch-up method to account for revisions in estimates. Material changes in estimates are disclosed in the notes to the consolidated financial statements. Educational Software and Products Revenue Recognition: Revenue is recognized when all of the following conditions are satisfied: there is persuasive evidence of an arrangement, the customer has access to full use of the product, the collection is reasonably assured, and the amount to be paid by the customer is fixed or determinable. Revenue generated from the Company’s subscription based learning service is recognized when all of the following conditions are satisfied: there is persuasive evidence of an arrangement, the customer has access to full use of the product, the collection is reasonably assured, and the amount to be paid by the customer is fixed or determinable. Revenue from customer subscriptions is recognized ratably over the subscription term beginning on the commencement date of each subscription. The average subscription term is twelve (12) months for our products, and all subscriptions are on a non-cancelable basis. When additional months are offered as a promotional incentive, those months are part of the subscription term. As part of their subscriptions, customers generally benefit from new features and functionality with each release at no additional cost. Although our membership contracts are generally non-cancelable, customers have the right to cancel their contracts by providing prior written notice to us of their intent to cancel the remainder of the contract term. In the event a customer cancels their contract, they are not entitled to a refund for prior services we have provided to them. Customer support is provided to customers following the sale at no additional charge and at a minimal cost per call. Virtual Learning does not incur significant up-front costs related to providing its products and services and therefore does not defer any expenses. Revenue from the sale of CD’s or DVD’s and other materials is recognized when shipped or available to the customer in a downloadable format. Capitalized Curriculum Development Costs Virtual Learning has internally developed curriculum, which is primarily offered as web content and accessed via the Internet. Virtual Learning also creates textbooks and other offline materials. Virtual Learning has capitalized curriculum development costs incurred during the application development stage in accordance with accounting principles generally accepted in the United States of America. These principles provide guidance for the treatment of costs associated with computer software development and defines those costs to be capitalized and those to be expensed. Costs that qualify for capitalization are external direct costs, payroll, and payroll-related expenses. Costs related to general and administrative functions are not capitalized and are expensed as incurred. Virtual Learning has capitalized curriculum development costs when the projects under development have reached technological feasibility. Many of our courses are leveraged off proven delivery platforms and are primarily content, which has no technological hurdles. As a result, a significant portion of our courseware development costs have qualified for capitalization due to the concentration of our development efforts on the content of the courseware. Technological feasibility is established when we have completed all planning, designing, coding, and testing activities necessary to establish that a course can be produced to meet its design specifications. Capitalization ends when a course is available for general release to our customers, at which time amortization of the capitalized costs begins. The period of time over which these development costs have been amortized is five years. This is consistent with the capitalization period used by others in our industry and corresponds with our product development lifecycle. Virtual Learning tests for impairment annually. At September 30, 2016 and December 31, 2015, the Company’s estimates of future undiscounted cash flows from the courses exceeded the carrying amounts of the capitalized curriculum development costs ($28,234 and $51,334, respectively) and therefore no impairment was recognized. Income Taxes Virtual Learning accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting purposes. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the provision for income tax in the statements of operations. Virtual Learning evaluates the probability of realizing the future benefits of its deferred tax assets and provides a valuation allowance when realization of the assets is not reasonably assured. Virtual Learning recognizes in its financial statements the impact of tax positions that meet a “more likely than not” threshold, based on the technical merits of the position. The tax benefits recognized from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. Net Income (Loss) Per Common Share Basic net income (basic net loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share is computed using the weighted average number of common shares outstanding and potentially dilutive securities outstanding during the period. For the nine months ended September 30, 2016 and 2015, the 317,485 and 279,970 shares of common stock underlying the $63,497 and $55,994 balances of convertible notes payable and accrued interest at September 30, 2016 and 2015, respectively, were excluded from the calculation of diluted shares outstanding as their inclusion would be antidilutive. Reclassifications The statements of operations for the three and nine months ended September 30, 2015 and the statement of cash flows for the nine months ended September 30, 2015 have been reclassified to conform with current period presentation. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Accounting Standards Codification “ASC” Topic 606). The purpose of this ASU is to converge revenue recognition requirements per GAAP and International Financial Reporting Standards (“IFRS”). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in this ASU are effective for interim and annual reporting periods beginning after December 15, 2016, with early adoption not permitted by the FASB; however, in August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date after public comment respondents supported a proposal to delay the effective date of this ASU to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. We are currently evaluating the impact of this ASU on our financial position, results of operations and cash flows. In September 2015, the FASB issued ASU 2015-16, “Business Combinations: Simplifying the Accounting for Measurement-Period Adjustments,” which requires acquirers to recognize adjustments to provisional amounts identified during the reporting period in which the adjustment amounts are determined. Acquirers should record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. Application of the standard, which should be applied prospectively, is required for the annual and interim periods beginning after December 15, 2015. We do not believe that adoption has had or will have a material impact on our results of operations or financial position. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”. The core principle of the standard is that a lessee should recognize the assets and liabilities that arise from leases. A lessee should recognize in its statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. We will be required to adopt the new standard in the first quarter of 2019. We are currently evaluating the impact this new standard will have on our financial statements. Certain other accounting pronouncements have been issued by the FASB and other standard setting organizations which are not yet effective and therefore have not yet been adopted by the Company. The impact on the Company’s financial position and results of operations from adoption of these standards is not expected to be material. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 2 - Property and Equipment Property and equipment is summarized as follows: September 30, 2016 December 31, 2015 (unaudited) Office equipment $ 4,155 $ 4,155 Less: Accumulated depreciation (4,155 ) (4,155 ) Property and Equipment- net $ - $ - Depreciation expense for the nine months ended September 30, 2016 and 2015 was $-0- and $-0-, respectively. |
Capitalized Curriculum Developm
Capitalized Curriculum Development Costs | 9 Months Ended |
Sep. 30, 2016 | |
Capitalized Curriculum Development Costs | |
Capitalized Curriculum Development Costs | 3 – Capitalized Curriculum Development Costs Capitalized curriculum development costs is summarized as follows: September 30, 2016 December 31, 2015 (unaudited) Common stock issued to individuals for services relating to curriculum development $ 110,000 $ 110,000 Contributed services of Thomas Monahan, President of Virtual Learning, relating to curriculum development 44,000 44,000 Total costs 154,000 154,000 Less accumulated amortization (125,766 ) (102,666 ) Net $ 28,234 $ 51,334 As described in Note 1 above, amortization of the capitalized curriculum development costs begins when the courses become available for sale to customers (which occurred in September 2012). Virtual Learning tests for impairment annually. At September 30, 2016 and December 31, 2015, the Company’s estimates of future undiscounted cash flows from the courses exceeded the carrying amounts of the capitalized curriculum development costs ($28,234 and $51,334, respectively) and therefore no impairment was recognized. For the nine months ended September 30, 2016 and 2015, amortization of Capitalized Curriculum Development Costs were $23,100 and $24,600, respectively. At September 30, 2016, expected future amortization expense of Capitalized Curriculum Development Costs follows: Period ending September 30, Amount (unaudited) 2017 $ 28,234 Total $ 28,234 |
Convertible Promissory Notes-Ne
Convertible Promissory Notes-Net | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Convertible Promissory Notes-Net | 4 - Convertible Promissory Notes-Net Convertible Notes Payable-net is summarized as follows: September 30, 2016 December 31, 2015 (unaudited) Unsecured notes issued in October and November 2014 to three individuals and one entity, interest at 15% per annum, due one year from date of receipt, principal and accrued interest convertible into Virtual Learning common stock at $.20 per share. $ 40,000 $ 40,000 Unsecured notes issued in May 2015 to two individuals, interest at 15% per annum, due one year from date of receipt, principal and accrued interest convertible into Virtual Learning common stock at $.20 per share. 10,000 10,000 Accrued interest 13,497 7,872 Total 63,497 57,872 Less unamortized debt discounts - (4,166 ) Net $ 63,497 $ 53,706 Included in the $40,000 notes issued in October and November 2014 above is a $25,000 note payable to General Property Investments LLC (“GPIL”). GPIL is controlled by the current (since July 20, 2016) chief executive officer of Virtual Learning. GPIL is also an owner of 2,125,000 shares, of which 2,000,000 shares are restricted, of Virtual Learning common stock at September 30, 2016. As further consideration for making the loans, Virtual Learning issued an aggregate of 250,000 shares of common stock to the six lenders. The $50,000 estimated fair value of the 250,000 restricted shares was recorded as debt discounts and was amortized over the one year term of the respective notes. As of September 30, 2016, the $50,000 of Notes issued and the $ 13,497 accrued interest thereon were past due and in default. |
Loans Payable to Related Partie
Loans Payable to Related Parties | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Loans Payable to Related Parties | 5-Loans Payable to Related Parties Loans payable to related parties is summarized as follows: September 30, 2016 December 31, 2015 (unaudited) Loans payable to former chief executive officer who died in April 2016 $ 11,525 $ 14,525 Loans payable to GPIL (see Note 6) 4,783 - Loan payable to DHL 100 - Total $ 16,408 $ 14,525 All the loans above are non-interest bearing and due on demand. |
Common Stock Issuances
Common Stock Issuances | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Common Stock Issuances | 6 - Common Stock Issuances In January 2015, Virtual Learning issued a total of 200,000 shares of common stock to four noteholders in connection with their loans totaling $40,000 (see Note 5). The 200,000 shares were valued at $40,000 (or $.20 per share), which amount was charged to debt discounts in the three months ended March 31, 2015 and has been amortized as an expense in the Statements of Operations over the terms of the loans though their respective original maturity dates. In February 2015, Virtual Learning issued 200,000 shares of common stock to Mr. Roger Fidler for legal services. The 200,000 shares were valued at $40,000 (or $.20 per share), which amount was expensed in the three months ended March 31, 2015. In June 2015 Virtual Learning sold a total of 2,100 shares of common stock to three individuals at a price of $.50 per share for proceeds of $1,050. In June 2015, Virtual Learning issued a total of 50,000 shares of common stock to two individuals in connection with their loans totaling $10,000 (see Note 5). The 50,000 shares were valued at $10,000 (or $.20 per share), which amount was charged to debt discounts in the three months ended June 30 2015. In July 2015, Virtual Learning sold 100 shares of common stock to one individual at a price of $.50 per share for proceeds of $50. On August 18, 2016, Virtual Learning issued 2,000,000 restricted shares of common stock to GPIL in satisfaction of $20,000 loans payable. (see Note 5) On August 19, 2016 (see Note1), Virtual Learning issued 2,225,000 shares of common stock to Dream Homes Ltd for a 4.5% equity interest in Dream Homes Ltd, and certain other assets, at an agreed price of $.05 per share. From August 19, 2016 to August 23, 2016 (see Note 1), Virtual Learning issued a total of 2,287,367 shares of common stock to Dream Homes Ltd for rights to complete 6 in process construction contracts of Atlantic Northeast Construction LLC, a wholly owned subsidiary of Dream Homes Ltd, at an agreed price of $.05 per share. On August 19, 2016, Virtual Learning issued 250,000 restricted shares of common stock to Mr. Roger Fidler for legal services. The 250,000 shares were valued at $2,500 (or $.01 per share), which amount was expensed in the three months ended September 30, 2016. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7 – Income Taxes The provisions for (benefit from) income taxes differ from the amounts computed by applying the statutory United States Federal income tax rate of 35% to income (loss) before income taxes. The sources of the differences follow: Nine months ended Nine months ended September 30, 2016 September 30, 2015 (unaudited) (unaudited) Expected tax at 35% $ (15,638 ) $ (49,933 ) Non-deductible stock-based compensation 875 14,000 Non-deductible amortization of debt discounts 1,458 12,833 Non-deductible amortization of stock-based and contributed Capitalized Curriculum Development Costs 8,085 8,610 Change in valuation allowance 5,220 14,490 Provision for (benefit from) income taxes $ - $ - The significant components of Virtual Learning’s deferred tax asset as of September 30, 2016 and December 31, 2015 are as follows: September 30, 2016 December 31, 2015 (unaudited) Deferred tax assets: Net operating loss carry forward $ 46,656 $ 41,436 Valuation allowance (46,656 ) (41,436 ) Net deferred tax asset $ - $ - Based on management’s present assessment, the Company has not yet determined it to be more likely than not that a deferred tax asset of $46,656 attributable to the future utilization of $133,303 of net operating loss carryforwards will be realized. Accordingly, the Company has maintained a 100% allowance against the deferred tax asset in the financial statements at September 30, 2016 and December 31, 2015. The Company will continue to review this valuation allowance and make adjustments as appropriate. The net operating loss carryforwards expire $672 in year 2029, $9,236 in year 2030, $41,526 in year 2031, $5,440 in year 2032, $1,840 in the year 2033, $17,025 in the year 2034, $42,650 in the year 2035, and $14,914 in the year 2036. Current United States income tax law limits the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited. The Company adopted FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109” (“FIN 48”). This Interpretation clarifies accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. FIN 48 establishes guidelines for recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company has not taken any tax positions and thus there is no impact as a result of the adoption of this interpretation. The Company reports interest and penalties associated with its tax positions, if any, as interest expense. |
Business Segments
Business Segments | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Business Segments | 8- Business Segments The Company has two business segments: (1) educational software and products and Summarized financial information by business segment for the three and nine months ended September 30, 2016 and 2015 follows: Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 (unaudited) (unaudited) Revenue: Residential construction $ 58,977 $ - $ 58,977 $ - Educational software and products - 20 21 75 Total $ 58,977 $ 20 $ 58,988 $ 75 Loss from operations Residential construction $ 17,638 $ - $ 17,638 $ - Educational software and products (7,700 ) (8,180 ) (23,079 ) (24,525 ) Corporate (21,507 ) (9,265 ) (32,006 ) (76,437 ) Total $ (11,569 ) $ (17,445 ) $ (37,447 ) $ (100,962 ) Identifiable assets: September 30, December 31, 2016 2015 (unaudited) Residential construction $ 55,245 $ - Educational software and products 28,234 51,334 Corporate 61,193 2,298 Total $ 144,672 $ 53,632 All revenue relating to the residential construction segment was derived from construction contracts involving homeowner customers located in the State of New Jersey. These contracts involve specialized construction related to compromised home foundations and related issues caused by Super Storm Sandy damage. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9- Commitments and Contingencies Construction As of September 30, 2016, Dream Building, LLC is committed under 8 construction contracts outstanding (7 assigned contracts from Atlantic Northeast Construction LLC and 1 contract executed by Dream Building, LLC) with home owners with contract prices totaling approximately $1,500,000, which are being fulfilled in the ordinary course of business. None of these construction projects are expected to take in excess of one year to complete. The Company has no significant commitments with material suppliers or subcontractors that involve any sums of substance or are of long term duration at the date of issuance of these financial statements. Line of Credit On September 15, 2016, Virtual Learning established a $50,000 line of credit with a nonbank lender. Advances under the line bear interest at a rate of 12% payable monthly and the outstanding principal is due and payable in 60 months. The line is secured by the personal guarantee of the Companys Chief Executive Officer. The agreement to fund automatically renews on a yearly basis as long as interest payments are current. To date, the Company has not received any advances under the line of credit. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 10 - Subsequent Events As of November 11 th |
Significant Accounting Polici18
Significant Accounting Policies and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited 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 and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they may 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 unaudited interim financial statements should be read in conjunction with the Company’s Annual Report filed on Form 10-K for the year ended December 31, 2015, which contains the audited financial statements and notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations, for the year ended December 31, 2015. |
Nature of Operations | Nature of Operations The Virtual Learning Company, Inc. (“Virtual Learning”) was incorporated on January 6, 2009 as a Nevada corporation with 75,000,000 shares of capital stock authorized, of which 70,000,000 shares are common shares ($.001 par value), and 5,000,000 shares are preferred shares ($.001 par value). Virtual Learning has been a subscription based software as a service (“SaaS”) provider of education products. Virtual Learning provides standards-based instruction, practice, assessments, and productivity tools that improve the performance of educators and students via proprietary web-based platforms at www.mathisbasic.com, www.scienceisbasic.com and www.readingisbasic.com. Virtual Learning is also a producer of a series of practice workbooks published on CD, DVD formatted disc and USB Drives and in the ePub format which have been offered for sale through Barnes and Noble’s Nook and Amazon’s Kindle since 2012. |
Newly Acquired Construction Business | Newly Acquired Construction Business On August 19, 2016, Virtual Learning acquired 4.5% of Dream Homes,Ltd. (“DHL”), 100% of Dream Building, LLC (“DBL”) , a wholly owned subsidiary of DHL, and use of all construction licensing and registrations held by Atlantic Northeast Construction LLC (“ANCL”), a wholly owned subsidiary of DHL, in exchange for the issuance of 2,225,000 restricted shares of Virtual Learning common stock to DHL at an agreed price of $.05 per common share. The majority stockholder and chief executive officer of DHL is also the controlling stockholder and chief executive officer of Virtual Learning. As Virtual Learning and DHL were entities under common control, the acquired assets were reflected by Virtual Learning at DHL’s $0 carrying amount on the date of transfer pursuant to Accounting Standards Codification (“ASC”) 805-50-30-5. From August 19, 2016 to August 23, 2016, Virtual Learning acquired the rights to complete 6 in process construction contracts of ANCL in exchange for the issuance of 2,287,367 restricted shares of Virtual Learning common stock to DHL at an agreed price of $.05 per common share for those ANCL contracts. As Virtual Learning and DHL were entities under common control, the acquired rights were reflected at DHL’s $0 carrying amount on the date of transfer pursuant to ASC 805-50-30-5. |
Going Concern Uncertainty | Going Concern Uncertainty These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. These standards contemplate continuation of Virtual Learning as a going concern. As of September 30, 2016, Virtual Learning had $61,193 cash and negative working capital of $81,152. For the nine months ended September 30, 2016 and 2015, Virtual Learning had revenues of $58,998 and $75, respectively, and sustained net losses of $44,680 and $142,666, respectively. These factors raise substantial doubt about Virtual Learning’s ability to continue as a going concern. Virtual Learning has also unamortized capitalized stock-based and contributed curriculum development costs of $28,234 as of September 30, 2016. The recovery of these asset costs and continuation of future operations will be dependent upon Virtual Learning’s ability to obtain additional debt or equity capital and its ability to generate revenues sufficient to continue pursuit of its business purposes. Virtual Learning is actively seeking financing to fund future operations. Virtual Learning is subject to a number of risks similar to those of other development stage enterprises. These risks include, but are not limited to, rapid technological change, dependence on key personnel, competing new product introductions and other activities of competitors, the successful development and marketing of its products, and the need to obtain adequate additional capital necessary to fund future operations. There is no assurance that Virtual Learning can reverse its operating losses, or that it can raise additional capital to allow it to continue its planned future operations. These factors raise additional substantial doubt about Virtual Learning’s ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability of recorded asset amounts that might be necessary from an unfavorable resolution of this uncertainty. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Virtual Learning and its wholly owned subsidiary DBL (collectively, the “Company”). All intercompany balances and transactions have been eliminated in consolidation. |
Property and Equipment | Property and Equipment Property and equipment is stated at cost less accumulated depreciation. Depreciation is provided using the straight-line method over an estimated useful life of five years. Repairs and maintenance costs are expensed as incurred, and renewals and betterments are capitalized. |
Use of Estimates | 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 amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents All liquid investments with stated maturities of three months or less from date of purchase are classified as cash equivalents; all liquid investments with stated maturities of greater than three months are classified as short-term investments. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that we would receive to sell an asset or pay to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. In determining fair value, GAAP establishes a three-level hierarchy used in measuring fair value, as follows: ● Level 1 inputs are quoted prices available for identical assets and liabilities in active markets. ● Level 2 inputs are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets and liabilities in active markets or other inputs that are observable or can be corroborated by observable market data. ● Level 3 inputs are less observable and reflect our own assumptions. Our financial instruments consist of cash and cash equivalents, receivables, accounts payable and accrued expenses and convertible notes payable and accrued interest. The carrying amount of cash and cash equivalents, receivables and accounts payable and accrued expenses approximates fair value because of their short maturities. The carrying value of the convertible notes payable and accrued interest approximates fair value based on the value of comparable financial instruments with similar terms. We may adjust the carrying amount of certain nonfinancial assets to fair value on a non-recurring basis when they are impaired. No such adjustments were made for the nine months ended September 30, 2016 and 2015. |
Construction Contracts | Construction Contracts Revenue recognition: The Company and its affiliated entities recognize construction contract revenue using the percentage-of-completion method, based primarily on contract cost incurred to date compared to total estimated contract cost. Cost of revenue includes an allocation of depreciation, amortization and general overhead cost. Changes to total estimated contract cost or losses, if any, are recognized in the period in which they are determined. The Company generally provides limited warranties for work performed under its construction contracts with periods typically extending for a limited duration following substantial completion of the Company’s work on a project. The Company classifies construction-related receivables and payables that may be settled in periods exceeding one year from the balance sheet date, if any, as current assets and liabilities consistent with the length of time of its project operating cycle. For example: ● Costs and estimated earnings in excess of billings represent the excess of contract costs and profits (or contract revenue) over the amount of contract billings to date and are classified as a current asset. ● Billings in excess of costs and estimated earnings represent the excess of contract billings to date over the amount of contract costs and profits (or contract revenue) recognized to date and are classified as a current liability. Costs and estimated earnings in excess of billings result when either: 1) costs are incurred related to certain claims and unapproved change orders, or 2) the appropriate contract revenue amount has been recognized in accordance with the percentage-of-completion accounting method, but a portion of the revenue recorded cannot be billed currently due to the billing terms defined in the contract. Claims occur when there is a dispute regarding both a change in the scope of work and the price associated with that change. Unapproved change orders occur when there is a dispute regarding only the price associated with a change in scope of work. For both claims and unapproved change orders, the Company recognizes revenue, but not profit, when it is determined that recovery of incurred cost is probable and the amounts can be reliably estimated. Change in Estimates: The Company’s estimates of contract revenue and cost are highly detailed and many factors change during a contract performance period that result in a change to contract profitability. These factors include, but are not limited to, differing site conditions: availability of skilled contract labor: performance of major material suppliers and subcontractors: on-going subcontractor negotiations and buyout provisions: unusual weather conditions: changes in the timing of scheduled work: change orders: accuracy of the original bid estimate: changes in estimated labor productivity and costs based on experience to date: achievement of incentive-based income targets: and the expected, or actual, resolution terms for claims. The factors that cause changes in estimates vary depending on the maturation of the project within its lifecycle. For example, in the ramp-up phase, these factors typically consist of revisions in anticipated project costs and during the peak and close-out phases, these fators include the impact of change orders and claims as well as additional revisions in remaining anticipated project costs. Generally, if the contract is at an early stage of completion, the current period impact is smaller than if the same change in estimate is made to the contract at a later stage of completion. Management focuses on evaluating the performance of contracts individually and uses the cumulative catch-up method to account for revisions in estimates. Material changes in estimates are disclosed in the notes to the consolidated financial statements. |
Educational Software and Products | Educational Software and Products Revenue Recognition: Revenue is recognized when all of the following conditions are satisfied: there is persuasive evidence of an arrangement, the customer has access to full use of the product, the collection is reasonably assured, and the amount to be paid by the customer is fixed or determinable. Revenue generated from the Company’s subscription based learning service is recognized when all of the following conditions are satisfied: there is persuasive evidence of an arrangement, the customer has access to full use of the product, the collection is reasonably assured, and the amount to be paid by the customer is fixed or determinable. Revenue from customer subscriptions is recognized ratably over the subscription term beginning on the commencement date of each subscription. The average subscription term is twelve (12) months for our products, and all subscriptions are on a non-cancelable basis. When additional months are offered as a promotional incentive, those months are part of the subscription term. As part of their subscriptions, customers generally benefit from new features and functionality with each release at no additional cost. Although our membership contracts are generally non-cancelable, customers have the right to cancel their contracts by providing prior written notice to us of their intent to cancel the remainder of the contract term. In the event a customer cancels their contract, they are not entitled to a refund for prior services we have provided to them. Customer support is provided to customers following the sale at no additional charge and at a minimal cost per call. Virtual Learning does not incur significant up-front costs related to providing its products and services and therefore does not defer any expenses. Revenue from the sale of CD’s or DVD’s and other materials is recognized when shipped or available to the customer in a downloadable format. |
Capitalized Curriculum Development Costs | Capitalized Curriculum Development Costs Virtual Learning has internally developed curriculum, which is primarily offered as web content and accessed via the Internet. Virtual Learning also creates textbooks and other offline materials. Virtual Learning has capitalized curriculum development costs incurred during the application development stage in accordance with accounting principles generally accepted in the United States of America. These principles provide guidance for the treatment of costs associated with computer software development and defines those costs to be capitalized and those to be expensed. Costs that qualify for capitalization are external direct costs, payroll, and payroll-related expenses. Costs related to general and administrative functions are not capitalized and are expensed as incurred. Virtual Learning has capitalized curriculum development costs when the projects under development have reached technological feasibility. Many of our courses are leveraged off proven delivery platforms and are primarily content, which has no technological hurdles. As a result, a significant portion of our courseware development costs have qualified for capitalization due to the concentration of our development efforts on the content of the courseware. Technological feasibility is established when we have completed all planning, designing, coding, and testing activities necessary to establish that a course can be produced to meet its design specifications. Capitalization ends when a course is available for general release to our customers, at which time amortization of the capitalized costs begins. The period of time over which these development costs have been amortized is five years. This is consistent with the capitalization period used by others in our industry and corresponds with our product development lifecycle. Virtual Learning tests for impairment annually. At September 30, 2016 and December 31, 2015, the Company’s estimates of future undiscounted cash flows from the courses exceeded the carrying amounts of the capitalized curriculum development costs ($28,234 and $51,334, respectively) and therefore no impairment was recognized. |
Income Taxes | Income Taxes Virtual Learning accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting purposes. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the provision for income tax in the statements of operations. Virtual Learning evaluates the probability of realizing the future benefits of its deferred tax assets and provides a valuation allowance when realization of the assets is not reasonably assured. Virtual Learning recognizes in its financial statements the impact of tax positions that meet a “more likely than not” threshold, based on the technical merits of the position. The tax benefits recognized from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. |
Net Income (Loss) Per Common Share | Net Income (Loss) Per Common Share Basic net income (basic net loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share is computed using the weighted average number of common shares outstanding and potentially dilutive securities outstanding during the period. For the nine months ended September 30, 2016 and 2015, the 317,485 and 279,970 shares of common stock underlying the $63,497 and $55,994 balances of convertible notes payable and accrued interest at September 30, 2016 and 2015, respectively, were excluded from the calculation of diluted shares outstanding as their inclusion would be antidilutive. |
Reclassifications | Reclassifications The statements of operations for the three and nine months ended September 30, 2015 and the statement of cash flows for the nine months ended September 30, 2015 have been reclassified to conform with current period presentation. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Accounting Standards Codification “ASC” Topic 606). The purpose of this ASU is to converge revenue recognition requirements per GAAP and International Financial Reporting Standards (“IFRS”). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in this ASU are effective for interim and annual reporting periods beginning after December 15, 2016, with early adoption not permitted by the FASB; however, in August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date after public comment respondents supported a proposal to delay the effective date of this ASU to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. We are currently evaluating the impact of this ASU on our financial position, results of operations and cash flows. In September 2015, the FASB issued ASU 2015-16, “Business Combinations: Simplifying the Accounting for Measurement-Period Adjustments,” which requires acquirers to recognize adjustments to provisional amounts identified during the reporting period in which the adjustment amounts are determined. Acquirers should record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. Application of the standard, which should be applied prospectively, is required for the annual and interim periods beginning after December 15, 2015. We do not believe that adoption has had or will have a material impact on our results of operations or financial position. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”. The core principle of the standard is that a lessee should recognize the assets and liabilities that arise from leases. A lessee should recognize in its statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. We will be required to adopt the new standard in the first quarter of 2019. We are currently evaluating the impact this new standard will have on our financial statements. Certain other accounting pronouncements have been issued by the FASB and other standard setting organizations which are not yet effective and therefore have not yet been adopted by the Company. The impact on the Company’s financial position and results of operations from adoption of these standards is not expected to be material. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment is summarized as follows: September 30, 2016 December 31, 2015 (unaudited) Office equipment $ 4,155 $ 4,155 Less: Accumulated depreciation (4,155 ) (4,155 ) Property and Equipment- net $ - $ - |
Capitalized Curriculum Develo20
Capitalized Curriculum Development Costs (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Capitalized Curriculum Development Costs | |
Schedule of Capitalized Curriculum Development Costs | Capitalized curriculum development costs is summarized as follows: September 30, 2016 December 31, 2015 (unaudited) Common stock issued to individuals for services relating to curriculum development $ 110,000 $ 110,000 Contributed services of Thomas Monahan, President of Virtual Learning, relating to curriculum development 44,000 44,000 Total costs 154,000 154,000 Less accumulated amortization (125,766 ) (102,666 ) Net $ 28,234 $ 51,334 |
Schedule of Expected Future Amortization Expense of Capitalized Curriculum Development Costs | At September 30, 2016, expected future amortization expense of Capitalized Curriculum Development Costs follows: Period ending September 30, Amount (unaudited) 2017 $ 28,234 Total $ 28,234 |
Convertible Promissory Notes-21
Convertible Promissory Notes-Net (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Notes Payable | Convertible Notes Payable-net is summarized as follows: September 30, 2016 December 31, 2015 (unaudited) Unsecured notes issued in October and November 2014 to three individuals and one entity, interest at 15% per annum, due one year from date of receipt, principal and accrued interest convertible into Virtual Learning common stock at $.20 per share. $ 40,000 $ 40,000 Unsecured notes issued in May 2015 to two individuals, interest at 15% per annum, due one year from date of receipt, principal and accrued interest convertible into Virtual Learning common stock at $.20 per share. 10,000 10,000 Accrued interest 13,497 7,872 Total 63,497 57,872 Less unamortized debt discounts - (4,166 ) Net $ 63,497 $ 53,706 |
Loans Payable to Related Part22
Loans Payable to Related Parties (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Schedule of Loans Payable to Related Parties | Loans payable to related parties is summarized as follows: September 30, 2016 December 31, 2015 (unaudited) Loans payable to former chief executive officer who died in April 2016 $ 11,525 $ 14,525 Loans payable to GPIL (see Note 6) 4,783 - Loan payable to DHL 100 - Total $ 16,408 $ 14,525 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of States Federal Income Tax Rate Income Loss Before Income Taxes | The sources of the differences follow: Nine months ended Nine months ended September 30, 2016 September 30, 2015 (unaudited) (unaudited) Expected tax at 35% $ (15,638 ) $ (49,933 ) Non-deductible stock-based compensation 875 14,000 Non-deductible amortization of debt discounts 1,458 12,833 Non-deductible amortization of stock-based and contributed Capitalized Curriculum Development Costs 8,085 8,610 Change in valuation allowance 5,220 14,490 Provision for (benefit from) income taxes $ - $ - |
Schedule of Deferred Tax Assets | The significant components of Virtual Learning’s deferred tax asset as of September 30, 2016 and December 31, 2015 are as follows: September 30, 2016 December 31, 2015 (unaudited) Deferred tax assets: Net operating loss carry forward $ 46,656 $ 41,436 Valuation allowance (46,656 ) (41,436 ) Net deferred tax asset $ - $ - |
Business Segments (Tables)
Business Segments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Summary of Financial Information by Business Segment | Summarized financial information by business segment for the three and nine months ended September 30, 2016 and 2015 follows: Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 (unaudited) (unaudited) Revenue: Residential construction $ 58,977 $ - $ 58,977 $ - Educational software and products - 20 21 75 Total $ 58,977 $ 20 $ 58,988 $ 75 Loss from operations Residential construction $ 17,638 $ - $ 17,638 $ - Educational software and products (7,700 ) (8,180 ) (23,079 ) (24,525 ) Corporate (21,507 ) (9,265 ) (32,006 ) (76,437 ) Total $ (11,569 ) $ (17,445 ) $ (37,447 ) $ (100,962 ) |
Schedule of Identifiable Assets | Identifiable assets: September 30, December 31, 2016 2015 (unaudited) Residential construction $ 55,245 $ - Educational software and products 28,234 51,334 Corporate 61,193 2,298 Total $ 144,672 $ 53,632 |
Significant Accounting Polici25
Significant Accounting Policies and Basis of Presentation (Details Narrative) - USD ($) | Aug. 23, 2016 | Aug. 19, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 |
Capital stock authorized | 75,000,000 | 75,000,000 | 75,000,000 | ||||
Common stock, shares authorized | 70,000,000 | 70,000,000 | 70,000,000 | ||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | ||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Cash | $ 61,193 | $ 61,193 | $ 2,298 | ||||
Working capital negative | 81,152 | 81,152 | |||||
Revenue | 58,977 | $ 20 | 58,998 | $ 75 | |||
Net losses | 13,444 | $ 31,823 | 44,680 | $ 142,666 | |||
Capitalized curriculum development costs | 28,234 | $ 28,234 | 51,334 | ||||
Property and equipment, estimated useful life | 5 years | ||||||
Average subscription term | 12 months | ||||||
Dilutive securities | 317,485 | 279,970 | |||||
Balance of convertible notes payable and accrued interest | $ 63,497 | $ 63,497 | $ 55,994 | ||||
Dream Homes,Ltd [Member] | |||||||
Business acquisitions voting rights, percent | 4.50% | ||||||
Numbe of restricted common stock issued to acquire business | 2,225,000 | ||||||
Common stock agreed price per share | $ 0.05 | ||||||
Carrying amount of assets on the date of transfer | $ 0 | ||||||
Dream Building, LLC [Member] | |||||||
Business acquisitions voting rights, percent | 100.00% | ||||||
ANCL [Member] | |||||||
Numbe of restricted common stock issued to acquire business | 2,287,367 | ||||||
Common stock agreed price per share | $ 0.05 | ||||||
Carrying amount of assets on the date of transfer | $ 0 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 0 | $ 0 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Abstract] | ||
Office equipment | $ 4,155 | $ 4,155 |
Less: Accumulated depreciation | (4,155) | (4,155) |
Property and Equipment- net | $ 0 | $ 0 |
Capitalized Curriculum Develo28
Capitalized Curriculum Development Costs (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Capitalized Curriculum Development Costs | |||||
Capitalized curriculum development costs | $ 28,234 | $ 28,234 | $ 51,334 | ||
Amortization of capitalized curriculum development costs | $ 7,700 | $ 8,200 | $ 23,100 | $ 24,600 |
Capitalized Curriculum Develo29
Capitalized Curriculum Development Costs - Schedule of Capitalized Curriculum Development Costs (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Capitalized Curriculum Development Costs - Schedule Of Capitalized Curriculum Development Costs Details | ||
Common stock issued to individuals for services relating to curriculum development | $ 110,000 | $ 110,000 |
Contributed services of Thomas Monahan, Former President of Virtual Learning, relating to curriculum development | 44,000 | 44,000 |
Total costs | 154,000 | 154,000 |
Less accumulated amortization | (125,766) | (102,666) |
Net | $ 28,234 | $ 51,334 |
Capitalized Curriculum Develo30
Capitalized Curriculum Development Costs - Schedule of Expected Future Amortization Expense of Capitalized Curriculum Development Costs (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Capitalized Curriculum Development Costs - Schedule Of Capitalized Curriculum Development Costs Details | ||
2,017 | $ 28,234 | |
Total | $ 28,234 | $ 51,334 |
Convertible Promissory Notes-31
Convertible Promissory Notes-Net (Details Narrative) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Oct. 31, 2014USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($)shares | Mar. 31, 2015USD ($)shares | Sep. 30, 2016USD ($)Lendersshares | Sep. 30, 2015USD ($) | Nov. 30, 2014USD ($)shares | |
Issuance of common stock, shares | shares | 50,000 | 200,000 | ||||||
Issuance of common stock | $ 10,000 | $ 40,000 | ||||||
Amortization of debt discounts | $ 12,500 | $ 4,166 | $ 36,666 | |||||
General Property Investments LLC [Member] | ||||||||
Notes issued | $ 40,000 | |||||||
Notes payable | $ 25,000 | |||||||
Number of shares owned | shares | 2,125,000 | |||||||
General Property Investments LLC [Member] | Restricted Shares [Member] | ||||||||
Number of shares owned | shares | 2,000,000 | |||||||
Convertible Notes Payable [Member] | Six Lenders [Member] | ||||||||
Issuance of common stock, shares | shares | 250,000 | |||||||
Issuance of common stock | $ 50,000 | |||||||
Convertible notes payable amortized over period | 1 year | |||||||
Amortization of debt discounts | $ 250,000 | |||||||
Number of lenders | Lenders | 6 | |||||||
Notes issued | 50,000 | $ 50,000 | ||||||
Accrued interest | $ 13,497 | $ 13,497 |
Convertible Promissory Notes-32
Convertible Promissory Notes-Net - Schedule of Convertible Notes Payable (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Convertible notes payable | $ 63,497 | $ 55,994 |
Accrued interest | 13,497 | 7,872 |
Convertible notes payable including unamortized debt discounts | 63,497 | 57,872 |
Less unamortized debt discounts | 0 | (4,166) |
Convertible notes payable, current | 63,497 | 53,706 |
Convertible Notes Payable One [Member] | ||
Convertible notes payable | 40,000 | 40,000 |
Convertible Notes Payable Two [Member] | ||
Convertible notes payable | $ 10,000 | $ 10,000 |
Convertible Promissory Notes-33
Convertible Promissory Notes-Net - Schedule of Convertible Notes Payable (Details) (Parenthetical) - $ / shares | 9 Months Ended | ||
Sep. 30, 2016 | Jun. 30, 2015 | Mar. 31, 2015 | |
Common stock per share | $ 0.20 | $ 0.20 | |
Three Individual And One Entity [Member] | Convertible Notes Payable One [Member] | |||
Interest rate | 15.00% | ||
Common stock per share | $ 0.20 | ||
Convertible notes payable due | one year | ||
Two Individuals [Member] | |||
Common stock per share | $ 0.20 | ||
Two Individuals [Member] | Convertible Notes Payable Two [Member] | |||
Interest rate | 15.00% | ||
Common stock per share | $ 0.20 | ||
Convertible notes payable due | one year |
Loans Payable to Related Part34
Loans Payable to Related Parties - Schedule of Loans Payable to Related Parties (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Total | $ 16,408 | $ 14,525 |
Loan Payable to Former Chief Executive Officer [Member] | ||
Total | 11,525 | 14,525 |
Loan Payable to GPL [Member] | ||
Total | 4,783 | |
Loan Payable to GHL [Member] | ||
Total | $ 100 |
Common Stock Issuances (Details
Common Stock Issuances (Details Narrative) - USD ($) | Aug. 23, 2016 | Aug. 19, 2016 | Aug. 19, 2016 | Aug. 18, 2016 | Jul. 31, 2015 | Jun. 30, 2015 | Feb. 28, 2015 | Jan. 31, 2015 | Sep. 30, 2016 | Jun. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Issuance of common stock, shares | 50,000 | 200,000 | |||||||||||
Issuance of common stock | $ 10,000 | $ 40,000 | |||||||||||
Common stock per share | $ 0.20 | $ 0.20 | $ 0.20 | ||||||||||
Common stock proceeds | $ 1,100 | ||||||||||||
Common stock price per share issued | $ 0.20 | 0.20 | $ 0.20 | ||||||||||
Mr. Roger Fidler [Member] | |||||||||||||
Issuance of common stock, shares | 250,000 | 250,000 | |||||||||||
Common stock per share | $ 0.05 | $ 0.05 | |||||||||||
Common stock shares values issued | $ 2,500 | ||||||||||||
Common stock price per share issued | $ 0.05 | $ 0.05 | |||||||||||
Four Noteholders [Member] | |||||||||||||
Issuance of common stock, shares | 200,000 | ||||||||||||
Issuance of common stock | $ 40,000 | ||||||||||||
Mr. Roger Fidler [Member] | |||||||||||||
Issuance of common stock, shares | 200,000 | ||||||||||||
Issuance of common stock | $ 40,000 | ||||||||||||
Common stock per share | $ 0.20 | ||||||||||||
Common stock price per share issued | $ 0.20 | ||||||||||||
Three Individuals [Member] | |||||||||||||
Issuance of common stock, shares | 2,100 | ||||||||||||
Issuance of common stock | $ 1,050 | ||||||||||||
Common stock per share | $ 0.50 | 0.50 | |||||||||||
Common stock price per share issued | $ 0.50 | 0.50 | |||||||||||
Two Individuals [Member] | |||||||||||||
Issuance of common stock, shares | 50,000 | ||||||||||||
Issuance of common stock | $ 10,000 | ||||||||||||
Common stock per share | $ 0.20 | 0.20 | |||||||||||
Common stock price per share issued | $ 0.20 | $ 0.20 | |||||||||||
One Individual [Member] | |||||||||||||
Issuance of common stock, shares | 100 | ||||||||||||
Common stock per share | $ 0.50 | ||||||||||||
Common stock proceeds | $ 50 | ||||||||||||
Common stock price per share issued | $ 0.50 | ||||||||||||
GPIL [Member] | Restricted Shares [Member] | |||||||||||||
Issuance of common stock, shares | 2,000,000 | ||||||||||||
Value of stock issued in satisfaction of loans payable | $ 20,000 | ||||||||||||
Dream Homes,Ltd [Member] | |||||||||||||
Issuance of common stock, shares | 2,287,367 | 2,225,000 | |||||||||||
Percent of equity interest | 4.50% | 4.50% | |||||||||||
Agreed price per share | $ 0.05 | $ 0.05 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Federal income tax rate | 35.00% | |
Deferred tax asset | $ 46,656 | $ 41,436 |
Operating loss carryforwards | $ 133,303 | |
Percentage of allowance against deferred tax asset | 100.00% | 100.00% |
Expire 2029 [Member] | ||
Operating loss carryforwards | $ 672 | |
Operating loss carryforwards expire year | 2,029 | |
Expire 2030 [Member] | ||
Operating loss carryforwards | $ 9,236 | |
Operating loss carryforwards expire year | 2,030 | |
Expire 2031 [Member] | ||
Operating loss carryforwards | $ 41,526 | |
Operating loss carryforwards expire year | 2,031 | |
Expire 2032 [Member] | ||
Operating loss carryforwards | $ 5,440 | |
Operating loss carryforwards expire year | 2,032 | |
Expire 2033 [Member] | ||
Operating loss carryforwards | $ 1,840 | |
Operating loss carryforwards expire year | 2,033 | |
Expire 2034 [Member] | ||
Operating loss carryforwards | $ 17,025 | |
Operating loss carryforwards expire year | 2,034 | |
Expire 2035 [Member] | ||
Operating loss carryforwards | $ 42,650 | |
Operating loss carryforwards expire year | 2,035 | |
Expire 2036 [Member] | ||
Operating loss carryforwards | $ 14,914 | |
Operating loss carryforwards expire year | 2,036 |
Income Taxes - Schedule of Stat
Income Taxes - Schedule of States Federal Income Tax Rate Income Loss Before Income Taxes (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||
Expected tax at 35% | $ (15,638) | $ (49,933) |
Non-deductible stock-based compensation | 875 | 14,000 |
Non-deductible amortization of debt discounts | 1,458 | 12,833 |
Non-deductible amortization of stock-based and contributed Capitalized Curriculum Development Costs | 8,085 | 8,610 |
Change in valuation allowance | 5,220 | 14,490 |
Provision for (benefit from) income taxes |
Income Taxes - Schedule of St38
Income Taxes - Schedule of States Federal Income Tax Rate Income Loss Before Income Taxes (Details) (Parenthetical) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||
Percentage of expected tax | 35.00% | 35.00% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry forward | $ 46,656 | $ 41,436 |
Valuation allowance | (46,656) | (41,436) |
Net deferred tax asset |
Business Segments - Summary of
Business Segments - Summary of Financial Information by Business Segment (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenue | $ 58,977 | $ 20 | $ 58,998 | $ 75 |
Loss from operations | (11,569) | (17,445) | (37,447) | (100,962) |
Residential Construction [Member] | ||||
Revenue | 58,977 | 58,977 | ||
Loss from operations | 17,638 | 17,638 | ||
Educational Software and Products [Member] | ||||
Revenue | 20 | 21 | 75 | |
Loss from operations | (7,700) | (8,180) | (23,079) | (24,525) |
Corporate [Member] | ||||
Loss from operations | $ (21,507) | $ (9,265) | $ (32,006) | $ (76,437) |
Business Segments - Schedule of
Business Segments - Schedule of Identifiable Assets (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Total | $ 144,672 | $ 53,632 |
Residential Construction [Member] | ||
Total | 55,245 | |
Educational Software and Products [Member] | ||
Total | 28,234 | 51,334 |
Corporate [Member] | ||
Total | $ 61,193 | $ 2,298 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | Sep. 15, 2016USD ($) | Sep. 30, 2016USD ($)Contracts |
Nonbank Lender [Member] | ||
Line of credit | $ 50,000 | |
Line of credit interest rate | 12.00% | |
Line of credit facility principal due payable terms | P60M | |
Construction Contracts [Member] | Dream Building, LLC [Member] | ||
Number of contracts assigned | Contracts | 8 | |
Contract price | $ 1,500,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] | Nov. 11, 2016USD ($) |
Construction contracts amount | $ 417,234 |
Construction renovation value | $ 55,000 |