Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Jul. 31, 2014 | Nov. 13, 2014 | Jan. 31, 2014 | |
Document And Entity Information [Abstract] | ' | ' | ' |
Document Type | '10-K | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 31-Jul-14 | ' | ' |
Entity Registrant Name | 'ARISTOCRAT GROUP CORP. | ' | ' |
Entity Central Index Key | '0001527027 | ' | ' |
Current Fiscal Year End Date | '--07-31 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Document Fiscal Year Focus | '2014 | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 78,041,774 | ' |
Entity Public Float | ' | ' | $1,295,475 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Jul. 31, 2014 | Jul. 31, 2013 |
CURRENT ASSETS | ' | ' |
Cash and cash equivalents | $13,103 | $205,153 |
Accounts receivable | 7,770 | ' |
Prepaid expenses | 57,168 | 88,609 |
Inventory | 14,906 | ' |
Total current assets | 92,947 | 293,762 |
Security deposits | 1,367 | 1,367 |
TOTAL ASSETS | 94,314 | 295,129 |
CURRENT LIABILITIES | ' | ' |
Accounts payable and accrued liabilities | 307,084 | 102,874 |
Advances payable | ' | 516,920 |
Total current liabilities | 307,084 | 619,794 |
Convertible note payable, net of discount of $955,723 and $139,153, respectively | 70,751 | 27,922 |
Accrued interest payable | 12,196 | 5,584 |
TOTAL LIABILITIES | 390,031 | 653,300 |
COMMITMENTS AND CONTINGENCIES | ' | ' |
STOCKHOLDERS' DEFICIT | ' | ' |
Common stock: $0.0001 par value; 250,000,000 shares authorized; 78,041,774 shares and 62,250,000 shares issued and outstanding at July 31, 2014 and July 31, 2013, respectively | 7,804 | 6,225 |
Additional paid-in capital | 1,637,585 | 204,350 |
Accumulated deficit | -1,941,106 | -568,746 |
Total stockholders' deficit | -295,717 | -358,171 |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $94,314 | $295,129 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Jul. 31, 2014 | Jul. 31, 2013 |
CONSOLIDATED BALANCE SHEETS [Abstract] | ' | ' |
Common stock, par value per share | $0.00 | $0.00 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 78,041,774 | 62,250,000 |
Common stock, shares outstanding | 78,041,774 | 62,250,000 |
Convertible notes payable, discount | $955,723 | $139,153 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract] | ' | ' |
REVENUE | $26,539 | ' |
COST OF GOODS SOLD | 25,334 | ' |
GROSS PROFIT | 1,205 | ' |
GENERAL AND ADMINISTRATIVE EXPENSES | 1,008,290 | 483,864 |
LOSS FROM OPERATIONS | -1,007,085 | -483,864 |
INTEREST EXPENSE | -365,275 | -33,507 |
NET LOSS | ($1,372,360) | ($517,371) |
NET LOSS PER COMMON SHARE - Basic and diluted | ($0.02) | ($0.01) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - Basic and diluted | 64,724,511 | 62,250,000 |
CONSOLIDATED_STATEMENT_OF_CHAN
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT (USD $) | Total | Common Stock [Member] | Additional Paid In Capital [Member] | Accumulated Deficit [Member] |
BALANCE at Jul. 31, 2012 | ($7,875) | $6,225 | $37,275 | ($51,375) |
BALANCE, shares at Jul. 31, 2012 | ' | 62,250,000 | ' | ' |
Shares issued for conversion of notes payable | ' | ' | ' | ' |
Beneficial conversion discount on convertible notes payable | 167,075 | ' | 167,075 | ' |
Net loss | -517,371 | ' | ' | -517,371 |
BALANCE at Jul. 31, 2013 | -358,171 | 6,225 | 204,350 | -568,746 |
BALANCE, shares at Jul. 31, 2013 | 62,250,000 | 62,250,000 | ' | ' |
Shares issued for conversion of notes payable | 315,835 | 1,579 | 314,256 | ' |
Shares issued for conversion of notes payable, shares | 15,791,774 | 15,791,774 | ' | ' |
Beneficial conversion discount on convertible notes payable | 1,118,979 | ' | 1,118,979 | ' |
Net loss | -1,372,360 | ' | ' | -1,372,360 |
BALANCE at Jul. 31, 2014 | ($295,717) | $7,804 | $1,637,585 | ($1,941,106) |
BALANCE, shares at Jul. 31, 2014 | 78,041,774 | 78,041,774 | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
CASH FLOW FROM OPERATING ACTIVITIES: | ' | ' |
Net loss | ($1,372,360) | ($517,371) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Amortization of discount on convertible notes payable | 302,409 | 27,922 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -7,770 | ' |
Inventory | -14,906 | ' |
Prepaid expenses | 31,441 | -88,609 |
Security deposits | ' | -1,367 |
Accounts payable and accrued liabilities | 204,210 | 100,421 |
Accrued interest payable | 62,867 | 5,584 |
NET CASH USED IN OPERATING ACTIVITIES | -794,109 | -473,420 |
CASH FLOWS FROM FINANCING ACTIVITIES | ' | ' |
Proceeds from advances | 602,059 | 677,330 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 602,059 | 677,330 |
NET INCREASE (DECREASE) IN CASH | -192,050 | 203,910 |
CASH, at the beginning of period | 205,153 | 1,243 |
CASH, at the end of period | 13,103 | 205,153 |
Supplemental Disclosures of Cash Flow Information: | ' | ' |
Cash paid during the period for: Interest | ' | ' |
Cash paid during the period for: Taxes | ' | ' |
Noncash investing and financing transaction: | ' | ' |
Refinance advances payable into convertible notes payable | 1,118,979 | 167,075 |
Beneficial conversion discount on convertible notes payable | 1,118,979 | 167,075 |
Conversion of convertible notes payable into common stock | $315,835 | ' |
Background_Information
Background Information | 12 Months Ended |
Jul. 31, 2014 | |
Background Information [Abstract] | ' |
Background Information | ' |
Note 1. Background Information | |
Aristocrat Group Corp. was incorporated on July 20, 2011 in the state of Florida. | |
On October 17, 2012, we formed Luxuria Brands LLC as a wholly owned subsidiary. On January 10, 2013, we formed Level Two Holdings, LLC as our wholly owned subsidiary. On January 15, 2013, we formed Top Shelf Distributing, LLC (“Top Shelf”) as our wholly owned subsidiary. | |
Top Shelf is focused on developing our distilled spirits line of business. | |
During the year ended July 31, 2014, we acquired inventory and began to generate revenues from the sales of vodka. |
Going_Concern
Going Concern | 12 Months Ended |
Jul. 31, 2014 | |
Going Concern [Abstract] | ' |
Going Concern | ' |
Note 2. Going Concern | |
For the fiscal year ended July 31, 2014, the Company had a net loss of $1,372,360 and negative cash flow from operations of $794,109. As of July 31, 2014, the Company has negative working capital of $214,137. | |
These factors raise substantial doubt about the Company's ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the possible inability of the Company to continue as a going concern. | |
The Company does not have the resources at this time to repay its credit and debt obligations, make any payments in the form of dividends to its shareholders or fully implement its business plan. Without additional capital, the Company will not be able to remain in business. | |
Management has plans to address the Company's financial situation as follows: | |
In the near term, management plans to continue to focus on raising the funds necessary to implement the Company's business plan. Management will continue to seek debt financing to obtain the capital required to meet the Company's financial obligations. There is no assurance, however, that lenders will continue to advance capital to the Company or that the new business operations will be profitable. The possibility of failure in obtaining additional funding and the potential inability to achieve profitability raises doubts about the Company's ability to continue as a going concern. | |
In the long term, management believes that the Company's projects and initiatives will be successful and will provide cash flow to the Company that will be used to finance the Company's future growth. However, there can be no assurances that the Company's planned activities will be successful, or that the Company will ultimately attain profitability. The Company's long-term viability depends on its ability to obtain adequate sources of debt or equity funding to meet current commitments and fund the continuation of its business operations, and the ability of the Company to achieve adequate profitability and cash flows from operations to sustain its operations. |
Significant_Accounting_Policie
Significant Accounting Policies | 12 Months Ended | ||
Jul. 31, 2014 | |||
Significant Accounting Policies [Abstract] | ' | ||
Significant Accounting Policies | ' | ||
Note 3. Significant Accounting Policies | |||
The significant accounting policies that the Company follows are: | |||
Basis of Presentation | |||
The consolidated financial statements and related disclosures have been prepared pursuant to the rules and regulations of the SEC. The financial statements have been prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”). | |||
Principles of Consolidation | |||
The consolidated financial statements include the accounts and operations of Aristocrat Group Corp., and its wholly owned subsidiaries Luxuria Brands, LLC; Level Two Holdings, LLC; and Top Shelf Distributing, LLC (collectively referred to as the “Company”). All material intercompany accounts and transactions are eliminated in consolidation. | |||
Use of Estimates | |||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |||
Cash and Cash Equivalents | |||
All cash is maintained with a major financial institution in the United States. Deposits with this bank may exceed the amount of insurance provided on such deposits. Temporary cash investments with an original maturity of three months or less are considered to be cash equivalents. Cash and cash equivalents were $13,103 and $205,153 at July 31, 2014 and 2013, respectively. | |||
Inventory | |||
Inventory consists solely of finished goods, which are made up entirely of bottled vodka. Inventory is recorded at weighted average cost. | |||
Revenue recognition | |||
The Company recognizes revenue when persuasive evidence of an arrangement exists, product delivery has occurred or the services have been rendered, the price is fixed or determinable and collectability is reasonably assured. | |||
Advertising Costs | |||
The Company's policy regarding advertising is to expense advertising costs as incurred. The Company incurred $154,964 and $40,000 of advertising costs for the years ended July 31, 2014 and 2013, respectively. | |||
Income Taxes | |||
The Company accounts for income taxes under ASC 740 Income Taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. 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 income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. No deferred tax assets or liabilities were recognized as of July 31, 2014 and 2013, respectively. | |||
Earnings (Loss) Per Common Share | |||
The basic earnings (loss) per common share are calculated by dividing the Company's net income available to common shareholders by the weighted average number of common shares outstanding during the year. The diluted earnings (loss) per common share are calculated by dividing the Company's net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted as of the first of the year for any potentially dilutive debt or equity instruments. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered anti-dilutive and thus are excluded from the calculation. The Company's convertible debt is considered anti-dilutive due to the Company's net loss for the years ended July 31, 2014 and 2013. As a result, for the years ended July 31, 2014 and 2013, potentially issuable shares as a result of conversions of convertible notes payable have been excluded from the calculation. At July 31, 2014 and July 31, 2013, the Company had 82,605,483 and 8,632,950, respectively, potentially issuable shares upon the conversion of convertible notes payable and interest. | |||
Financial Instruments | |||
The Company's balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period between the origination of these instruments and their expected realization. | |||
FASB Accounting Standards Codification (ASC) 820 Fair Value Measurements and Disclosures (ASC 820) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also 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 developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: | |||
Level 1 - | Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. | ||
Level 2 - | Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. | ||
Level 3 - | Inputs that are both significant to the fair value measurement and unobservable. | ||
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of July 31, 2014. The respective carrying value of financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accounts receivable, prepaid expenses, accounts payable, and accrued expenses. The fair value of the Company's notes payable is estimated based on current rates that would be available for debt of similar terms that is not significantly different from its stated value. | |||
Significant concentrations | |||
100% of the Company's sales during the year ended July 31, 2014 were to one customer. 100% of the Company's inventory was manufactured by one supplier during the year ended July 31, 2014. The Company believes that, in the event that its customer is unable to continue to purchase the Company's product, there are a substantial number of alternative buyers for its product at a competitive price. The Company believes that, in the event that its supplier is unable to continue to supply the Company's product, there are a substantial number of alternative suppliers for its product at a competitive price. | |||
Recently Issued Accounting Pronouncements | |||
In June 2014, the FASB issued ASU 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. ASU 2014-10 eliminates the distinction of a development stage entity and certain related disclosure requirements, including the elimination of inception-to-date information on the statements of operations, cash flows and stockholders' equity. The amendments in ASU 2014-10 will be effective prospectively for annual reporting periods beginning after December 15, 2014, and interim periods within those annual periods, however early adoption is permitted. The Company evaluated and adopted ASU 2014-10 for the year ended July 31, 2014. | |||
There were various other accounting standards and interpretations issued recently, none of which are expected to a have a material impact on the Company's consolidated financial position, operations or cash flows. | |||
Subsequent Events | |||
The Company evaluated material events occurring between the end of our fiscal year, July 31, 2014, and through the date when the consolidated financial statements were available to be issued for disclosure consideration. |
Prepaid_Expenses
Prepaid Expenses | 12 Months Ended |
Jul. 31, 2014 | |
Prepaid Expenses [Abstract] | ' |
Prepaid Expenses | ' |
Note 4. Prepaid Expenses | |
Prepaid expense consists solely of a prepayment to a vendor for distilling and bottling our distilled spirits product. | |
Advances
Advances | 12 Months Ended |
Jul. 31, 2014 | |
Advances [Abstract] | ' |
Advances | ' |
Note 5. Advances | |
During the year ended July 31, 2014, the Company received net, non-interest bearing advances from Vista View Ventures Inc. totaling $602,059. The total amounts due under these advances as of July 31, 2014 and 2013 were $0 and $516,920, respectively. These advances are not collateralized and are due on demand. As a result, they are included in current liabilities. |
Convertible_Notes_Payable
Convertible Notes Payable | 12 Months Ended | |||||||||||||||
Jul. 31, 2014 | ||||||||||||||||
Convertible Notes Payable [Abstract] | ' | |||||||||||||||
Convertible Notes Payable | ' | |||||||||||||||
Note 6. Convertible Notes Payable | ||||||||||||||||
Convertible notes payable due to Vista View Ventures Inc. consisted of the following at July 31: | ||||||||||||||||
31-Jul-14 | 31-Jul-13 | |||||||||||||||
Convertible note payable in the original principal amount of $167,075, issued March 31, 2013 and due March 31, 2015, bearing interest at 10% per year, convertible into common stock at a rate of $0.02 per share | $ | — | $ | 167,075 | ||||||||||||
Convertible note payable in the original principal amount of $516,920, issued October 31, 2013 and due October 31, 2015, bearing interest at 10% per year, convertible into common stock at a rate of $0.02 per share | 424,415 | — | ||||||||||||||
Convertible note payable in the original principal amount of $83,265, issued November 30, 2013 and due November 30, 2015, bearing interest at 10% per year, convertible into common stock at a rate of $0.01 per share | 83,265 | — | ||||||||||||||
Convertible note payable in the original principal amount of $117,719, issued January 1, 2014 and due January 1, 2016, bearing interest at 10% per year, convertible into common stock at a rate of $0.01 per share | 117,719 | — | ||||||||||||||
Convertible note payable in the original principal amount of $401,075, issued July 31, 2014 and due July 31, 2016, bearing interest at 10% per year, convertible into common stock at a rate of $0.01 per share | 401,075 | — | ||||||||||||||
Total convertible notes payable | 1,026,474 | 167,075 | ||||||||||||||
Less: discount on noncurrent convertible notes payable | (955,723 | ) | (139,153 | ) | ||||||||||||
Long-term convertible notes payable, net of discount | $ | 70,751 | $ | 27,922 | ||||||||||||
All principal along with accrued interest is payable on the maturity date. The notes are convertible into common stock at the option of the holder. | ||||||||||||||||
Convertible notes issued | ||||||||||||||||
During the year ended July 31, 2014, the Company signed convertible promissory notes of $1,118,979 in total with Vista View Ventures Inc., which refinanced non-interest bearing advances. These notes are payable at maturity and bear interest at 10% per annum. The holder of the notes may not convert the convertible promissory note into common stock if that conversion would result in the holder owing more than 4.99% of the number of shares of common stock outstanding on the conversion date. The convertible promissory notes are convertible into common stock at rates of between $0.02 and $0.01 per share at the option of the holder. | ||||||||||||||||
Date Issued | Maturity Date | Interest Rate | Conversion Rate | Amount of | ||||||||||||
Per Share | Note | |||||||||||||||
31-Oct-13 | 31-Oct-15 | 10 | % | $ | 0.02 | $ | 516,920 | |||||||||
30-Nov-13 | 30-Nov-15 | 10 | % | 0.01 | 83,265 | |||||||||||
31-Jan-14 | 31-Jan-16 | 10 | % | 0.01 | 117,719 | |||||||||||
31-Jul-14 | 31-Jul-16 | 10 | % | 0.01 | 401,075 | |||||||||||
Total | $ | 1,118,979 | ||||||||||||||
The Company evaluated the terms of the new notes in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity's Own Stock and determined that the underlying common stock is indexed to the Company's common stock. The Company determined that the conversion features did not meet the definition of a liability and therefore did not bifurcate the conversion feature and account for it as a separate derivative liability. The Company evaluated the conversion feature for a beneficial conversion feature. The effective conversion price was compared to the market price on the date of the note and was deemed to be less than the market value of underlying common stock at the inception of the note. Therefore, the Company recognized discounts for beneficial conversion features on their respective issue dates in the amounts of $516,920, $83,265, $117,719 and $401,075. The discount is amortized over the life of the notes using the effective interest method. The Company amortized $302,409 of the discount on the convertible notes payable to interest expense during the year ended July 31, 2014. | ||||||||||||||||
Conversions | ||||||||||||||||
During year ended July 31, 2014, the holders of the convertible note payable dated March 31, 2013 converted $167,075 of principal and $18,864 of accrued interest into 9,291,774 shares of common stock. Also, during the year ended July 31, 2014, the holders of the convertible note payable dated October 31, 2013 converted $92,505 of principal and $37,391 of accrued interest into 6,500,000 shares of common stock. On the conversion dates, the unamortized discount related to the beneficial conversion feature was amortized to interest expense. |
Common_Stock
Common Stock | 12 Months Ended |
Jul. 31, 2014 | |
Common Stock [Abstract] | ' |
Common Stock | ' |
Note 7. Common Stock | |
During the year ended July 31, 2014, the Company issued 15,791,774 shares of common stock to third parties for the conversion of convertible notes payable and accrued interest in the amount of $315,835. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Jul. 31, 2014 | |||||||||||||
INCOME TAXES [Abstract] | ' | ||||||||||||
INCOME TAXES | ' | ||||||||||||
Note 8. Income Taxes | |||||||||||||
There is no current or deferred income tax expense or benefit for the period ended July 31, 2014. | |||||||||||||
The provision for income taxes is different from that which would be obtained by applying the statutory federal income tax rate to income before income taxes. The items causing this difference for the periods ended July 31, 2014 and 2013 are as follows. | |||||||||||||
31-Jul-14 | 31-Jul-13 | ||||||||||||
Tax benefit at U.S. statutory rate | $ | 466,602 | $ | 175,906 | |||||||||
Permanent difference - beneficial conversion features | (380,452 | ) | (56,805 | ) | |||||||||
Valuation allowance | (86,150 | ) | (119,101 | ) | |||||||||
$ | — | $ | — | ||||||||||
The Company has net operating loss carryforwards of approximately $655,052. |
Commitments
Commitments | 12 Months Ended |
Jul. 31, 2014 | |
Commitments [Abstract] | ' |
COMMITTMENTS | ' |
Note 9. Commitments | |
The Company has an arrangement with a third party whereby the third party provides the Company with office space, legal services, accounting services, fundraising and management services. During the year ending July 31, 2014, the Company incurred $169,061 of fees related to the third party. At July 31, 2014, the Company owes the third party $271,518, which is recorded in accounts payable and accrued liabilities. | |
As of July 31, 2014, the Company has a commitment with a third party to provide an additional $80,000 in funding to provide certain management services on behalf of the Company. |
Subsequent_Events
Subsequent Events | 12 Months Ended |
Jul. 31, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Note 10. Subsequent Events | |
The Jaxon Investment Agreement | |
On September 15, 2014, we entered into an investment agreement (the “Jaxon Investment Agreement”) with Jaxon Group Corp., a Louisiana corporation (“Jaxon”). Pursuant to the terms of the Jaxon Investment Agreement, Jaxon committed to purchase up to $5,000,000 of our common stock over a period of up to thirty-six (36) months. | |
In connection with the Jaxon Investment Agreement, we also entered into a registration rights agreement with Jaxon, pursuant to which we are obligated to file a registration statement with the SEC covering 10,000,000 shares of our common stock underlying the Jaxon Investment Agreement within 21 days after the closing of the transaction. In addition, we are obligated to use all commercially reasonable efforts to have the registration statement declared effective by the SEC within 120 days after the closing of the transaction and maintain the effectiveness of such registration statement until termination of the Jaxon Investment Agreement. | |
The proceeds to be received will depend upon the stock price immediately prior to the stock put being exercised. | |
Jaxon will periodically purchase our common stock under the Jaxon Investment Agreement and will, in turn, sell such shares to investors in the market at the market price. This may cause our stock price to decline, which will require us to issue increasing numbers of common shares to Jaxon to raise the same amount of funds, as our stock price declines. | |
No amounts have been requested by the Company or funded under the Jaxon Investment Agreement. Jaxon is not obligated to purchase our common stock under the Jaxon Investment Agreement until the registration statement is declared effective. The registration statement has not been declared effective as of the date of this filing. | |
Purchase of Shares under the Jaxon Investment Agreement | |
From time to time during the thirty-six (36) months period commencing with the effectiveness of the registration statement, we may deliver a put notice to Jaxon which states the dollar amount that we intend to sell to Jaxon on a date specified in the put notice. The purchase price per share to be paid by Jaxon shall be calculated at a fifty percent (50%) discount to the lowest price of the common stock as reported by Bloomberg, L.P. during the twenty (20) consecutive trading days immediately prior to the receipt by Jaxon of the put notice. We have reserved 30,000,000 shares of our common stock for issuance under the Jaxon Investment Agreement, including 10,000,000 shares included in the registration statement. |
Significant_Accounting_Policie1
Significant Accounting Policies (Policies) | 12 Months Ended | ||
Jul. 31, 2014 | |||
Significant Accounting Policies [Abstract] | ' | ||
Basis of Presentation | ' | ||
Basis of Presentation | |||
The consolidated financial statements and related disclosures have been prepared pursuant to the rules and regulations of the SEC. The financial statements have been prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”). | |||
Principles of Consolidation | ' | ||
Principles of Consolidation | |||
The consolidated financial statements include the accounts and operations of Aristocrat Group Corp., and its wholly owned subsidiaries Luxuria Brands, LLC; Level Two Holdings, LLC; and Top Shelf Distributing, LLC (collectively referred to as the “Company”). All material intercompany accounts and transactions are eliminated in consolidation. | |||
Use of Estimates | ' | ||
Use of Estimates | |||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |||
Cash and Cash Equivalents | ' | ||
Cash and Cash Equivalents | |||
All cash is maintained with a major financial institution in the United States. Deposits with this bank may exceed the amount of insurance provided on such deposits. Temporary cash investments with an original maturity of three months or less are considered to be cash equivalents. Cash and cash equivalents were $13,103 and $205,153 at July 31, 2014 and 2013, respectively. | |||
Inventory | ' | ||
Inventory | |||
Inventory consists solely of finished goods, which are made up entirely of bottled vodka. Inventory is recorded at weighted average cost. | |||
Revenue recognition | ' | ||
Revenue recognition | |||
The Company recognizes revenue when persuasive evidence of an arrangement exists, product delivery has occurred or the services have been rendered, the price is fixed or determinable and collectability is reasonably assured. | |||
Advertising Costs | ' | ||
Advertising Costs | |||
The Company's policy regarding advertising is to expense advertising costs as incurred. The Company incurred $154,964 and $40,000 of advertising costs for the years ended July 31, 2014 and 2013, respectively. | |||
Income Taxes | ' | ||
Income Taxes | |||
The Company accounts for income taxes under ASC 740 Income Taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. 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 income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. No deferred tax assets or liabilities were recognized as of July 31, 2014 and 2013, respectively. | |||
Earnings (Loss) per Common Share | ' | ||
Earnings (Loss) Per Common Share | |||
The basic earnings (loss) per common share are calculated by dividing the Company's net income available to common shareholders by the weighted average number of common shares outstanding during the year. The diluted earnings (loss) per common share are calculated by dividing the Company's net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted as of the first of the year for any potentially dilutive debt or equity instruments. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered anti-dilutive and thus are excluded from the calculation. The Company's convertible debt is considered anti-dilutive due to the Company's net loss for the years ended July 31, 2014 and 2013. As a result, for the years ended July 31, 2014 and 2013, potentially issuable shares as a result of conversions of convertible notes payable have been excluded from the calculation. At July 31, 2014 and July 31, 2013, the Company had 82,605,483 and 8,632,950, respectively, potentially issuable shares upon the conversion of convertible notes payable and interest. | |||
Financial Instruments | ' | ||
Financial Instruments | |||
The Company's balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period between the origination of these instruments and their expected realization. | |||
FASB Accounting Standards Codification (ASC) 820 Fair Value Measurements and Disclosures (ASC 820) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also 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 developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: | |||
Level 1 - | Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. | ||
Level 2 - | Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. | ||
Level 3 - | Inputs that are both significant to the fair value measurement and unobservable. | ||
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of July 31, 2014. The respective carrying value of financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accounts receivable, prepaid expenses, accounts payable, and accrued expenses. The fair value of the Company's notes payable is estimated based on current rates that would be available for debt of similar terms that is not significantly different from its stated value. | |||
Significant concentrations | ' | ||
Significant concentrations | |||
100% of the Company's sales during the year ended July 31, 2014 were to one customer. 100% of the Company's inventory was manufactured by one supplier during the year ended July 31, 2014. The Company believes that, in the event that its customer is unable to continue to purchase the Company's product, there are a substantial number of alternative buyers for its product at a competitive price. The Company believes that, in the event that its supplier is unable to continue to supply the Company's product, there are a substantial number of alternative suppliers for its product at a competitive price. | |||
Recently Issued Accounting Pronouncements | ' | ||
Recently Issued Accounting Pronouncements | |||
In June 2014, the FASB issued ASU 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. ASU 2014-10 eliminates the distinction of a development stage entity and certain related disclosure requirements, including the elimination of inception-to-date information on the statements of operations, cash flows and stockholders' equity. The amendments in ASU 2014-10 will be effective prospectively for annual reporting periods beginning after December 15, 2014, and interim periods within those annual periods, however early adoption is permitted. The Company evaluated and adopted ASU 2014-10 for the year ended July 31, 2014. | |||
There were various other accounting standards and interpretations issued recently, none of which are expected to a have a material impact on the Company's consolidated financial position, operations or cash flows. | |||
Subsequent Events | ' | ||
Subsequent Events | |||
The Company evaluated material events occurring between the end of our fiscal year, July 31, 2014, and through the date when the consolidated financial statements were available to be issued for disclosure consideration. |
Convertible_Notes_Payable_Tabl
Convertible Notes Payable (Tables) | 12 Months Ended | |||||||||||||||
Jul. 31, 2014 | ||||||||||||||||
Convertible Notes Payable [Abstract] | ' | |||||||||||||||
Schedule of Convertible Notes Payable | ' | |||||||||||||||
Convertible notes payable due to Vista View Ventures Inc. consisted of the following at July 31: | ||||||||||||||||
31-Jul-14 | 31-Jul-13 | |||||||||||||||
Convertible note payable in the original principal amount of $167,075, issued March 31, 2013 and due March 31, 2015, bearing interest at 10% per year, convertible into common stock at a rate of $0.02 per share | $ | — | $ | 167,075 | ||||||||||||
Convertible note payable in the original principal amount of $516,920, issued October 31, 2013 and due October 31, 2015, bearing interest at 10% per year, convertible into common stock at a rate of $0.02 per share | 424,415 | — | ||||||||||||||
Convertible note payable in the original principal amount of $83,265, issued November 30, 2013 and due November 30, 2015, bearing interest at 10% per year, convertible into common stock at a rate of $0.01 per share | 83,265 | — | ||||||||||||||
Convertible note payable in the original principal amount of $117,719, issued January 1, 2014 and due January 1, 2016, bearing interest at 10% per year, convertible into common stock at a rate of $0.01 per share | 117,719 | — | ||||||||||||||
Convertible note payable in the original principal amount of $401,075, issued July 31, 2014 and due July 31, 2016, bearing interest at 10% per year, convertible into common stock at a rate of $0.01 per share | 401,075 | — | ||||||||||||||
Total convertible notes payable | 1,026,474 | 167,075 | ||||||||||||||
Less: discount on noncurrent convertible notes payable | (955,723 | ) | (139,153 | ) | ||||||||||||
Long-term convertible notes payable, net of discount | $ | 70,751 | $ | 27,922 | ||||||||||||
Schedule of Convertible Notes Issued | ' | |||||||||||||||
Date Issued | Maturity Date | Interest Rate | Conversion Rate | Amount of | ||||||||||||
Per Share | Note | |||||||||||||||
31-Oct-13 | 31-Oct-15 | 10 | % | $ | 0.02 | $ | 516,920 | |||||||||
30-Nov-13 | 30-Nov-15 | 10 | % | 0.01 | 83,265 | |||||||||||
31-Jan-14 | 31-Jan-16 | 10 | % | 0.01 | 117,719 | |||||||||||
31-Jul-14 | 31-Jul-16 | 10 | % | 0.01 | 401,075 | |||||||||||
Total | $ | 1,118,979 |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Jul. 31, 2014 | |||||||||||||
INCOME TAXES [Abstract] | ' | ||||||||||||
Provision for Income Taxes | ' | ||||||||||||
The provision for income taxes is different from that which would be obtained by applying the statutory federal income tax rate to income before income taxes. The items causing this difference for the periods ended July 31, 2014 and 2013 are as follows. | |||||||||||||
31-Jul-14 | 31-Jul-13 | ||||||||||||
Tax benefit at U.S. statutory rate | $ | 466,602 | $ | 175,906 | |||||||||
Permanent difference - beneficial conversion features | (380,452 | ) | (56,805 | ) | |||||||||
Valuation allowance | (86,150 | ) | (119,101 | ) | |||||||||
$ | — | $ | — |
Going_Concern_Details
Going Concern (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
Background Information [Abstract] | ' | ' |
Net loss | ($1,372,360) | ($517,371) |
Cash flow from operations | -794,109 | -473,420 |
Working capital | ($214,137) | ' |
Significant_Accounting_Policie2
Significant Accounting Policies (Details) (USD $) | 12 Months Ended | ||
Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2012 | |
Significant Accounting Policies [Abstract] | ' | ' | ' |
Cash and cash equivalents | $13,103 | $205,153 | $1,243 |
Advertising expense | $154,964 | $40,000 | ' |
Inventory [Member] | Supplier Concentration Risk [Member] | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' |
Concentration risk, percentage | 100.00% | ' | ' |
Sales [Member] | Customer Concentration Risk [Member] | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' |
Concentration risk, percentage | 100.00% | ' | ' |
Advances_Details
Advances (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
Advances [Abstract] | ' | ' |
Proceeds from advances | $602,059 | $677,330 |
Advances payable | ' | $516,920 |
Convertible_Notes_Payable_Sche
Convertible Notes Payable (Schedule of Convertible Notes Payable) (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
Debt Instrument [Line Items] | ' | ' |
Less: discount on noncurrent convertible notes payable | ($955,723) | ($139,153) |
Convertible Debt [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt Instrument, Issuer | ' | ' |
Vista View Ventures Inc. | ||
Convertible note payable, original principal amount | 1,118,979 | ' |
Total convertible notes payable | 1,026,474 | 167,075 |
Less: discount on noncurrent convertible notes payable | -955,723 | -139,153 |
Long-term convertible notes payable, net of discount | 70,751 | 27,922 |
Interest rate, annual | 10.00% | ' |
Convertible Debt [Member] | March 2013 Note [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Convertible note payable, original principal amount | 167,075 | ' |
Total convertible notes payable | ' | 167,075 |
Debt conversion, price per share | $0.02 | ' |
Interest rate, annual | 10.00% | ' |
Issuance date | 31-Mar-13 | ' |
Maturity date | 31-Mar-15 | ' |
Convertible Debt [Member] | October 2013 Note [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Convertible note payable, original principal amount | 516,920 | ' |
Total convertible notes payable | 424,415 | ' |
Debt conversion, price per share | $0.02 | ' |
Interest rate, annual | 10.00% | ' |
Issuance date | 31-Oct-13 | ' |
Maturity date | 31-Oct-15 | ' |
Convertible Debt [Member] | November 2013 Note [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Convertible note payable, original principal amount | 83,265 | ' |
Total convertible notes payable | 83,265 | ' |
Debt conversion, price per share | $0.01 | ' |
Interest rate, annual | 10.00% | ' |
Issuance date | 30-Nov-13 | ' |
Maturity date | 30-Nov-15 | ' |
Convertible Debt [Member] | January 2014 Note [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Convertible note payable, original principal amount | 117,719 | ' |
Total convertible notes payable | 117,719 | ' |
Debt conversion, price per share | $0.01 | ' |
Interest rate, annual | 10.00% | ' |
Issuance date | 1-Jan-14 | ' |
Maturity date | 1-Jan-16 | ' |
Convertible Debt [Member] | July 2014 Note [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Convertible note payable, original principal amount | 401,075 | ' |
Total convertible notes payable | $401,075 | ' |
Debt conversion, price per share | $0.01 | ' |
Interest rate, annual | 10.00% | ' |
Issuance date | 31-Jul-14 | ' |
Maturity date | 31-Jul-16 | ' |
Convertible_Notes_Payable_Sche1
Convertible Notes Payable (Schedule of Convertible Notes Issued) (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
Debt Instrument [Line Items] | ' | ' |
Amortization of discount on convertible notes payable to interest expense | $302,409 | $27,922 |
Convertible Debt [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Convertible notes payable, issuer | ' | ' |
Vista View Ventures Inc. | ||
Convertible note payable, original principal amount | 1,118,979 | ' |
Interest rate, annual | 10.00% | ' |
Amortization of discount on convertible notes payable to interest expense | 302,409 | ' |
Maximum ownership percentage allowed afer converting | 4.99% | ' |
Convertible Debt [Member] | Maximum [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt conversion, price per share | $0.02 | ' |
Convertible Debt [Member] | Minimum [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt conversion, price per share | $0.01 | ' |
Convertible Debt [Member] | October 2013 Note [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Convertible note payable, original principal amount | 516,920 | ' |
Debt conversion, price per share | $0.02 | ' |
Interest rate, annual | 10.00% | ' |
Issuance date | 31-Oct-13 | ' |
Maturity date | 31-Oct-15 | ' |
Discount for beneficial conversion feature | 516,920 | ' |
Convertible Debt [Member] | November 2013 Note [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Convertible note payable, original principal amount | 83,265 | ' |
Debt conversion, price per share | $0.01 | ' |
Interest rate, annual | 10.00% | ' |
Issuance date | 30-Nov-13 | ' |
Maturity date | 30-Nov-15 | ' |
Discount for beneficial conversion feature | 83,265 | ' |
Convertible Debt [Member] | January 2014 Note [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Convertible note payable, original principal amount | 117,719 | ' |
Debt conversion, price per share | $0.01 | ' |
Interest rate, annual | 10.00% | ' |
Issuance date | 1-Jan-14 | ' |
Maturity date | 1-Jan-16 | ' |
Discount for beneficial conversion feature | 117,719 | ' |
Convertible Debt [Member] | July 2014 Note [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Convertible note payable, original principal amount | 401,075 | ' |
Debt conversion, price per share | $0.01 | ' |
Interest rate, annual | 10.00% | ' |
Issuance date | 31-Jul-14 | ' |
Maturity date | 31-Jul-16 | ' |
Discount for beneficial conversion feature | $401,075 | ' |
Convertible_Notes_Payable_Conv
Convertible Notes Payable (Conversions) (Details) (USD $) | 12 Months Ended |
Jul. 31, 2014 | |
Debt Instrument [Line Items] | ' |
Shares issued for conversion of notes payable, shares | 15,791,774 |
Convertible Debt [Member] | March 2013 Note [Member] | ' |
Debt Instrument [Line Items] | ' |
Shares issued for conversion of notes payable, shares | 9,291,774 |
Conversion of convertible notes payable into common stock, accrued interest portion | 18,864 |
Conversion of convertible notes payable into common stock, principal portion | 167,075 |
Convertible Debt [Member] | October 2013 Note [Member] | ' |
Debt Instrument [Line Items] | ' |
Shares issued for conversion of notes payable, shares | 6,500,000 |
Conversion of convertible notes payable into common stock, accrued interest portion | 37,391 |
Conversion of convertible notes payable into common stock, principal portion | 92,505 |
Common_Stock_Details
Common Stock (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
Common Stock [Abstract] | ' | ' |
Shares issued for conversion of notes payable | $315,835 | ' |
Shares issued for conversion of notes payable, shares | 15,791,774 | ' |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
INCOME TAXES [Abstract] | ' | ' |
Tax benefit at U.S. statutory rate | $466,602 | $175,906 |
Permanent difference - beneficial conversion features | -380,452 | -56,805 |
Valuation allowance | -86,150 | -119,101 |
Total | ' | ' |
Net operating loss carry-forward | $655,052 | ' |
Commitments_Details
Commitments (Details) (USD $) | 12 Months Ended |
Jul. 31, 2014 | |
Commitments [Abstract] | ' |
Fees related to third party | $169,061 |
Fees owed to third party recorded in accounts payable and accrued liabilities | 271,518 |
Commitment to third party to provide additional funding to provide management services | $80,000 |
Subsequent_Events_Details
Subsequent Events (Details) (Subsequent Event [Member], USD $) | 12 Months Ended |
Jul. 31, 2014 | |
Subsequent Event [Member] | ' |
Subsequent Event [Line Items] | ' |
Jaxon Investment Agreement, date | 15-Sep-14 |
Jaxon Investment Agreement, maximum amount Jaxon committed to purchase of common stock | $5,000,000 |
Jaxon Investment Agreement, term | '36 months |
Jaxon Investment Agreement, registration statement shares | 10,000,000 |
Jaxon Investment Agreement, percent discount on purchase price per share | 50.00% |
Jaxon Investment Agreement, shares of common stock reserved for issuance | 30,000,000 |