| NOTE 1 - Organization and summary of significant accounting policies | Organization
and Nature of Business: Xfuels,
Inc.., (Formerly Xfuels, Inc..)("We," or "the Company") is a Nevada corporation incorporated on June 2, 2010.
The Company has no revenues and limited operating history Preferred
Stock Purchase and Sale Agreement On
September 15, 2015, Xfuels, Inc. (the Company), entered into an Agreement with Converde, Inc., an Ontario corporation
(Converde Canada) whereby the Corporation agreed to purchase from Converde Canada exactly 215,498,745 shares of
Series A Preferred Stock (the Converde Preferred Stock) of Converde Energy USA, Inc., a Nevada corporation (Converde
USA) whose common stock is traded on OTC Markets Pink Sheets under the symbol XFUL, in exchange
for 1 share of Series A Preferred Stock of the Company par value $0.0001 (the AMZZ Preferred Stock). AMZZ Preferred
Stock holds voting rights equal to 4 times the total issued and outstanding common. As a result, the Company became the controlling
holder of Converde USA as the Converde Preferred Stock votes and converts to common stock at a rate of 20:1 and Converde Canada
become the controlling party of the Company. The AMZZ Preferred Stock was created by shareholder vote on As additional consideration
for purchasing the controlling interest in Converde USA, the Company further agreed to assume certain debts of Converde USA totaling
approximately $1.5 million. Simultaneously
to the closing of the transaction, our current CEO and sole director resigned from the Company and appointed Michael McLaren,
Pierre Besuchet and Sigmund Friburg as Directors of the Company. The new Board of Directors promptly appointed Michael McLaren
as CEO and Isaac Voss as President and COO. The appointments stated here under Item 1.01 are further discussed under Item 5.02
below. The
Xfuels Preferred Stock was created by shareholder vote on May 6, 2015 whereby holders of 51% of the issued and outstanding voted
to create a series of preferred shares with voting rights equal to 4 times the issued and outstanding common stock as described
under Item 5.03 below in anticipation of a potential partnership that would complement the current hydrogen production technology. The
Board of Directors believes it is in the best interest of the shareholders to combine the resources of Converde Canada with the
technology of the Company as Converde Canada has established operations and projects that can integrate the Companys technologies
into existing lines of business. Although the Company was successful in continuing development of hydrogen production products,
it did not have the resources to commercialize or market the products. The
above description of the Agreement is a summary of its material terms, does not purport to be complete, and is qualified in its
entirety by reference to the Agreement, which, subject to any confidential treatment requested, the Company intends to file as
an exhibit to the Companys Quarterly Report on Form 10-Q for the period ending July 31, 2015. Subsequent
to the transaction, the Company was in a position, wherein the voting rights attached to the Preferred Stock provided the Company
with de facto control over the operations of Converde USA. The Company, having control would normally be accounted for as a consolidated
entity. The Company, however has determined that the relationship will be accounted for as an equity investment as there are no
intercompany transactions and the purpose of the acquisition was to facilitate the acquisition of a private company by Converde
USA, wherein Xfuels, Inc will exchange 70% of the outstanding preferred stock of Converde USA held by the Company was exchanged
for the outstanding common stock of a private corporation in a transaction which was treated by the acquired corporation as a
recapitalization. As of the date of these financial statements, the Xfuels, Inc. investment represented 30% of the outstanding
preferred shares of Converde, USA. Unregistered
Sales of Equity Securities. On
September 16, 2015, pursuant to the Agreement identified under Item 1.01 above, the Company issued 1 share of Series A Preferred
Stock to Converde, Inc. as part consideration for purchase of control of Converde Energy USA, Inc. The Series A Preferred Shares
has voting rights equal to four times the issued and outstanding stock at the time a vote. There are no conversion rights designated
under the Series A Preferred. The Company relied upon exemption from registration under Section 4(2) of the Securities Act of
1933, as amended. Changes
in Registrants Certifying Accountant. On
June 23, 2015, the Company received notice from former partners of our auditor informing the Company that effective June 16, 2015,
the Public Company Accounting Oversight Board (the "PCAOB") revoked the registration of our independent auditor Harris
& Gillespie CPAs, PLLC and its predecessor firm, Thomas J. Harris, CPA (together Harris & Gillespie). As
a result of the revocation, the Company can no longer include the audit reports of Harris & Gillespie in the Company's filings
with the SEC. As a result of the foregoing, and with the approval of its board of directors, the Company dismissed Harris &
Gillespie. On July 20, 2015 the Company engaged George Stewart, CPA to provide auditing services beginning with the annual report
for the period ending April 30, 2015. Other
than an explanatory paragraph included in Harris & Gillespies audit reports for the Company's fiscal year ended April
30, 2014 and 2013 relating to the uncertainty of the Company's ability to continue as a going concern, the audit reports of Harris
& Gillespie on the Company's financial statements for the last two fiscal years ended April 30, 2014 and 2013, did not contain
an adverse opinion or a disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit scope, or accounting
principles. Basis
of Presentation: The accompanying financial statements have been prepared in accordance with generally accepted accounting
principles in the United States of America, and pursuant to the rules and regulations of the Securities and Exchange Commission
(the SEC) and reflect all adjustments, consisting of normal recurring adjustments, which management believes are
necessary to fairly present the financial position, results of operations and cash flows of the Company for the year ended April
30, 2016. 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 amount of revenues and expenses during the reporting period. Actual results
could differ from those estimates. Cash
and Cash Equivalents: The
Company maintains a cash balance in a non-interest-bearing account that currently does not exceed federally insured limits. 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. There were no cash equivalents as of April 30, 2016. Property
and Equipment: The
Company values its investment in property and equipment at cost less accumulated depreciation. Depreciation is computed primarily
by the straight line method over the estimated useful lives of the assets ranging from three to five years. For the year ended
April 30, 2016, the Company had no depreciation expense. Income
Taxes: The
Company accounts for its income taxes in accordance with Income Taxes Topic of the FASB ASC 740, which requires recognition of
deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax base and credit carry- forwards. 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 operations in the period that includes the enactment date. Net
Loss per Share Calculation: Net
loss per share is provided in accordance with FASB ASC 260-10, "Earnings per Share". Basic net loss per common share
("EPS") is computed by dividing income available to common stockholders by the weighted-average number of common shares
outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average shares outstanding,
assuming all dilutive potential common shares were issued, unless doing so is anti-dilutive. Fair
Value of Financial Instruments: The
Company has adopted Accounting Standards Codification regarding Disclosure about Derivative Financial Instruments and Fair Value
of Financial Instruments. The carrying amounts of cash, accounts payable, accrued expenses, and other current liabilities approximate
fair value because of the short maturity of these items. These fair value estimates are subjective in nature and involve uncertainties
and matters of significant judgment, and, therefore, cannot be determined with precision. Changes in assumptions could significantly
affect these estimates. We do not hold or issue financial instruments for trading purposes, nor do we utilize derivative instruments
in the management of foreign exchange, commodity price or interest rate market risks. The
Company does not use derivative financial instruments to hedge exposures to cash-flow, market or foreign-currency risks. However,
the Company has issued financial instruments including senior convertible notes payable and freestanding stock purchase warrants
with features that are either (i) not afforded equity classification, (ii) embody risks not clearly and closely related to host
contracts, or (iii) may be net-cash settled by the counterparty. As required by FASB ASC 815, in certain circumstances, these
instruments are required to be carried as derivative liabilities, at fair value, in our financial statements. Determination
of Fair Value: The
Company's financial instruments consist of convertible notes payable. The Company believes all of the financial instruments' recorded
values approximate their fair values because of their nature and respective durations. The
Company complies with the provisions of FASB ASC 820-10, "Fair Values Measurements and Disclosures." FASB ASC 820-10
relates to financial assets and financial liabilities. FASB ASC 820-10 defines fair value, establishes a framework for measuring
fair value in accounting principles generally accepted in the Unites States of America (GAAP), and expands disclosures about fair
value measurements. The provisions of this standard apply to other accounting pronouncements that require or permit fair value
measurements and are to be applied prospectively with limited exceptions. FASB
ASC 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. FASB ASC 820-10 establishes a fair value hierarchy that distinguishes
between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs)
and (2) an entity's own assumptions, about market participant assumptions, that are developed based on the best information available
in the circumstances (unobservable inputs). The fair value hierarchy consist of three broad levels, which gives the highest priority
to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 and Level 2) and the lowest priority
to unobservable inputs (Level 3). Stock
Based Compensation: The
Company recognizes stock-based compensation in accordance with ASC Topic 718 "Stock Compensation", which requires the
measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including
employee stock options and employee stock purchases related to an Employee Stock Purchase Plan based on the estimated fair values. For
non-employee stock-based compensation, we have adopted ASC Topic 505 "Equity-Based Payments to Non-Employees", which
requires stock-based compensation related to non-employees to be accounted for based on the fair value of the related stock or
options or the fair value of the services on the grant date, whichever is more readily determinable in accordance with ASC Topic
718. Recently
Issued Accounting Pronouncements: For
the year ended April 30, 2015, the Company does not expect any of the recently issued accounting pronouncements to have a material
impact on its financial condition or results of operations. |
