Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Nov. 30, 2014 | Jan. 05, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | Service Team Inc. | |
Entity Trading Symbol | SERV | |
Document Type | 10-Q | |
Document Period End Date | 30-Nov-14 | |
Amendment Flag | FALSE | |
Entity Central Index Key | 1535635 | |
Current Fiscal Year End Date | -23 | |
Entity Common Stock, Shares Outstanding | 12,525,647 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Nov. 30, 2014 | Aug. 31, 2014 |
ASSETS | ||
Cash | $21,474 | $7,457 |
Accounts receivable, net of allowances of $18,488 and $2,802, respectively | 201,558 | 186,026 |
Total current assets | 223,032 | 193,483 |
Property and equipment, net | 9,242 | 9,641 |
Prepaid expenses | 9,000 | 9,000 |
TOTAL ASSETS | 241,274 | 212,124 |
LIABILITIES & SHAREHOLDERS' (DEFICIT) | ||
Accounts payable | 249,913 | 172,117 |
Promissory note - related party | 10,158 | 27,158 |
Contingent Liability | 54,100 | 54,100 |
Accrued Payroll Costs | 40,425 | 56,403 |
Accrued Interest | 3,297 | 3,987 |
TOTAL LIABILITIES | 357,893 | 313,765 |
Common stock, $0.001 par value, 74,000,000 authorized, 12,525,647 and 12,485,647 issued and outstanding as of November 30, 2014 and August 31, 2014, respectively. | 12,526 | 12,486 |
Additional paid in capital | 1,000,076 | 955,650 |
Accumulated deficit | -1,129,221 | -1,109,777 |
TOTAL SHAREHOLDERS' (DEFICIT) | -116,619 | -101,641 |
TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT) | $241,274 | $212,124 |
CONSOLIDATED_BALANCE_SHEETS_PA
CONSOLIDATED BALANCE SHEETS PARENTHETICALS (USD $) | Nov. 30, 2014 | Aug. 31, 2014 |
PARENTHETICALS | ||
Accounts receivable, net of allowances | $18,488 | $2,802 |
Common Stock, Par Value | $0.00 | $0.00 |
Common Stock, Shares Authorized | 74,000,000 | 74,000,000 |
Common Stock, Shares Issued | 12,525,647 | 12,485,647 |
Common Stock, Shares Outstanding | 12,525,647 | 12,485,647 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | |
Nov. 30, 2014 | Nov. 30, 2013 | |
REVENUES | ||
Sales | $553,627 | $477,223 |
COST OF SALES | ||
Cost of sales | 513,383 | 432,704 |
Gross Margin | 40,244 | 44,519 |
OPERATING EXPENSES | ||
General & administrative expenses | 59,222 | 36,033 |
Total Operating Expenses | 59,222 | 36,033 |
PROFIT (LOSS) FROM OPERATIONS | -18,978 | 8,486 |
OTHER INCOME (EXPENSE) | ||
Interest expense | -466 | -12,223 |
Total Other Income (Expense) | -466 | -12,223 |
NET LOSS | ($19,444) | ($3,737) |
Weighted average number of common shares outstanding - basic and fully diluted | 12,512,021 | 12,370,870 |
Net (loss) per share - basic and fully diluted | $0 | $0 |
CONSOLIDATED_STATEMENT_OF_SHAR
CONSOLIDATED STATEMENT OF SHAREHOLDERS DEFICIT (USD $) | Common Shares | Common Amount | Additional Paid In Capital | Accumulated Deficit | Total |
USD ($) | USD ($) | USD ($) | USD ($) | ||
Balance at Aug. 31, 2013 | 12,367,314 | 12,368 | 950,302 | -1,184,133 | -221,464 |
Imputed Interest on Related Party Debt | $0 | $10,716 | $0 | $10,716 | |
Shares Issued for Cash | 118,333 | 118 | 34,632 | 0 | 34,750 |
Net Income | 0 | 0 | 74,356 | 74,356 | |
Balance at Aug. 31, 2014 | 12,485,647 | 12,486 | 995,650 | -1,109,777 | -101,641 |
Imputed Interest on Related Party Debt | 0 | 466 | 0 | 466 | |
Shares Issued for Cash | 40 | 3,960 | 0 | 4,000 | |
Shares Issued for Cash | 40 | 3,960 | 0 | 4,000 | |
Net Loss | $0 | $0 | ($19,444) | ($19,444) | |
Balance at Nov. 30, 2014 | 12,525,647 | 12,526 | 1,000,076 | -1,129,221 | -116,619 |
CONSOLIDATED_STATEMENT_OF_CASH
CONSOLIDATED STATEMENT OF CASH FLOWS (USD $) | 3 Months Ended | |
Nov. 30, 2014 | Nov. 30, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
NET LOSS | ($19,444) | ($3,737) |
Adjustments to reconcile net loss with cash used in operations: | ||
Imputed rent expense | 0 | 1,500 |
Debt discount amortization | 0 | 6,833 |
Depreciation | 497 | 0 |
Imputed interest | 466 | 4,700 |
CHANGE IN OPERATING ASSETS AND LIABILITIES | ||
Accounts Receivable | -15,532 | -397 |
Accrued Expenses | -16,668 | -6,532 |
Accounts Payable | 77,796 | -40,360 |
Net Cash Provided by (Used in) Operating Activities | 27,115 | -37,993 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Cash paid for purchase of fixed assets | -98 | 0 |
Net Cash Used in Investing Activities | -98 | 0 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from sale of stock | 4,000 | 0 |
Payments on loans with Hallmark Venture Group, Inc. * | -17,000 | -24,000 |
Payments on convertible notes payable | 0 | -5,000 |
Cash overdrafts | 0 | 3,177 |
Net Cash Provided by (Used in) Financing Activities | -13,000 | -25,823 |
Net Increase (Decrease) In Cash and Cash Equivalents | 14,017 | -63,816 |
Cash at Beginning of Period | 7,457 | 100,895 |
Cash at End of Period | 21,474 | 37,079 |
Supplemental Disclosures | ||
Interest Paid | 0 | 0 |
Taxes Paid | 0 | 0 |
Non-cash transactions: | ||
Shares issued for subscriptions receivable | $0 | $10,000 |
ORGANIZATION
ORGANIZATION | 3 Months Ended |
Nov. 30, 2014 | |
ORGANIZATION | |
ORGANIZATION | NOTE 1 - ORGANIZATION |
Organization | |
Service Team Inc. (the “Company”) was incorporated pursuant to the laws of the State of Nevada on June 6, 2011. The Company was organized to comply with the warranty obligations of electronic devices manufactured by companies outside of the United States. The business proved to be unprofitable and the Company reduced its warranty and repair operations. On June 5, 2013, Service Team Inc. acquired Trade Leasing, Inc. for 4,000,000 shares of its common stock, a commonly held company. Trade Leasing, Inc., a California corporation, was incorporated on November 1, 2011, and commenced business January 1, 2013. Trade Leasing, Inc. is principally involved in the manufacturing, maintenance and repair of truck bodies. | |
The Company has established a fiscal year end of August 31. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended | ||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||||
Basis of Presentation | |||||||||||||||||
The consolidated financial statements presented in this report are the combined financial reports of Trade Leasing, Inc. and Service Team Inc. | |||||||||||||||||
The Company maintains its accounting records on an accrual basis in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP). | |||||||||||||||||
The consolidated financial statements present the Balance Sheet, Statements of Operations, Shareholders’ Deficit and Cash Flows of the Company. These consolidated financial statements are presented in United States dollars. The accompanying audited, consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q. All adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations for the interim periods have been made and are of a recurring nature unless otherwise disclosed herein. | |||||||||||||||||
Principles of Consolidation | |||||||||||||||||
The accompanying consolidated financial statements include the accounts of Service Team Inc. and Trade Leasing, Inc. both of which are under common control and ownership. The condensed consolidated financial statements herein contain the operations of the wholly-owned subsidiaries listed above. All significant inter-company transactions have been eliminated in the preparation of these financial statements. | |||||||||||||||||
Use of Estimates | |||||||||||||||||
The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. | |||||||||||||||||
Going Concern | |||||||||||||||||
The Company's consolidated financial statements are prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America, and have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. However, we have incurred continued losses, ongoing negative cash flows from operations, have a net working capital deficiency of $134,861, and have an accumulated deficit of approximately $1,129,221 as of November 30, 2014. There can be no assurance that the Company will be successful in order to continue as a going concern. The Company is funding its operations by issuing common shares and debt. As of November 30, 2014, the Company had sold 6,000,000 shares to Hallmark Venture Group, Inc. at $0.001 per share for net funds to the Company of $6,000 and received capital contributions of $23,027. The Company has also sold 1,969,014 shares to various individuals and received net funds of $340,383. Hallmark Venture Group, Inc. has also loaned the Company $219,215. The major shareholder, Hallmark Venture Group, Inc., has committed to advancing additional funds as may be required for the operation of the Company. We cannot be certain that capital will be provided when it is required. | |||||||||||||||||
Cash and Equivalents | |||||||||||||||||
Cash and equivalents include investments with initial maturities of three months or less. The Company maintains its cash balances at credit-worthy financial institutions that are insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250,000. There were no cash equivalents at November 30, 2014 or August 31, 2014. | |||||||||||||||||
Concentration of Credit Risk | |||||||||||||||||
Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, are cash and cash equivalents. The Company places its cash and temporary cash investments with credit quality institutions. At times, such investments may be in excess of FDIC insurance limits. | |||||||||||||||||
Accounts Receivable | |||||||||||||||||
All accounts receivable are due thirty (30) days from the date billed. If the funds are not received within thirty (30) days the customer is contacted to arrange payment. The Company uses the allowance method to account for uncollectable accounts receivable. All accounts were considered collectable at period end and no allowance for bad debts was considered necessary. The allowance for doubtful accounts as of November 30, 2014 and August 31, 2014 was $18,488 and $2,802, respectively. | |||||||||||||||||
Accounts Receivable and Revenue Concentrations | |||||||||||||||||
The Company’s wholly owned subsidiary, Trade Leasing, Inc., has more than 400 customers. Three customers represented about 23%, 11% and 10% of total receivables as of November 30, 2014.One customer represented about 20% of total receivables as of August 31, 2014. | |||||||||||||||||
During the three months ended November 30, 2014, the Company had one customer that represented 19% of total sales. During the three months ended November 30, 2013, the Company had one customer that represented about 22% of total sales. | |||||||||||||||||
Inventory | |||||||||||||||||
The Company does not own inventory, materials are purchased as needed from local suppliers; therefore, there was no additional inventory on hand at November 30, 2014 or August 31, 2014. | |||||||||||||||||
Property and Equipment | |||||||||||||||||
Equipment, vehicles and furniture, which are recorded at cost, consist primarily of fabrication equipment and are depreciated using the straight-line method over the estimated useful lives of the related assets (generally fifteen years or less). Costs incurred for maintenance and repairs are expensed as incurred and expenditures for major replacements and improvements are capitalized and depreciated over their estimated remaining useful lives. There was $497 of depreciation expense during the three months ended November 30, 2014. There was no depreciation expense recorded during the three months ended November 30, 2013. | |||||||||||||||||
Net property and equipment were as follows at November 30, 2014 and August 31, 2014: | |||||||||||||||||
11/30/14 | 8/31/14 | ||||||||||||||||
Equipment | $ | 243,542 | $ | 243,444 | |||||||||||||
Vehicles | 15,000 | 15,000 | |||||||||||||||
Furniture | 1,500 | 1,500 | |||||||||||||||
Subtotal | 260,042 | 259,944 | |||||||||||||||
Less: accumulated depreciation | (250,800 | ) | (250,303 | ) | |||||||||||||
Total | $ | 9,242 | $ | 9,641 | |||||||||||||
Lease Commitments | |||||||||||||||||
Service Team Inc. leases a manufacturing facility at 10633 Ruchti Road, South Gate, California 90280 on a year-to-year basis for $7,000 per month. The location consists of three acres of land with two buildings a fabrication building of 6,000 square feet and a final assembly building of 12,000 square feet. The final assembly building includes a large spray booth capable of accommodating large trucks and office space for four offices. | |||||||||||||||||
Our principal executive offices are located in 600 square feet in a building at 18482 Park Villa Place, Villa Park, California 92861. The space is furnished by Hallmark Venture Group, Inc., a related party, at no charge. As a result of this contribution of office space, $0 and $1,500 of imputed rent expense was recorded for the three months ended November 30, 2014 and 2013, respectively. | |||||||||||||||||
Beneficial Conversion Features | |||||||||||||||||
From time to time, the Company may issue convertible notes that may contain an imbedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method. | |||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||
The Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820 on June 6, 2011. Under this FASB, fair value is defined 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 (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value. | |||||||||||||||||
The Company has various financial instruments that must be measured under the new fair value standard including: cash, convertible notes payable, accrued expenses, promissory notes payable, accounts receivable and accounts payable. The Company’s financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows: | |||||||||||||||||
Level 1 – Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. The fair value of the Company’s cash is based on quoted prices and therefore classified as Level 1. | |||||||||||||||||
Level 2 - Inputs include quoted prices for similar assets and 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, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). | |||||||||||||||||
Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability. | |||||||||||||||||
Cash, accounts receivable, accounts payable, promissory notes and accrued expenses reported on the balance sheet are estimated by management to approximate fair market value due to their short term nature. | |||||||||||||||||
The following table presents assets that were measured and recognized at fair value as of November 30, 2014 on a recurring basis: | |||||||||||||||||
Total | |||||||||||||||||
Realized | |||||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Loss | |||||||||||||
$ | - | $ | - | $ | $ | - | |||||||||||
Total | $ | - | $ | - | $ | $ | - | ||||||||||
The following table presents assets that were measured and recognized at fair value as of August 31, 2014 on a recurring basis: | |||||||||||||||||
Total | |||||||||||||||||
Realized | |||||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Loss | |||||||||||||
$ | - | $ | - | $ | $ | - | |||||||||||
Total | $ | - | $ | - | $ | $ | - | ||||||||||
Income Taxes | |||||||||||||||||
In assessing the realization of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on the level of historical operating results and the uncertainty of the economic conditions, the Company has recorded a full valuation allowance against its deferred tax assets at November 30, 2014 and August 31, 2014 where it cannot conclude that it is more likely than not that those assets will be realized. | |||||||||||||||||
Revenue Recognition | |||||||||||||||||
Trade Leasing Division | |||||||||||||||||
The Trade Leasing Division receives orders from customers to build or repair truck bodies. The company builds the requested product. At the completion of the product the truck is delivered to the customer. If the customer accepts the product Trade Leasing Inc. issues an invoice to the customer for the job. The invoice is entered into our accounting system and is recognized as revenue at that time. | |||||||||||||||||
In the Trade Leasing Division we use the completed contract method for truck bodies built, which typically have construction periods of 15 days or less. Contracts are considered complete when title has passed, the customer has accepted the product and we do not retain risks or rewards of ownership of the truck bodies. Losses are accrued if manufacturing costs are expected to exceed manufacturing contract revenue. Manufacturing expenses are primarily composed of aluminum cost, which is the largest component of our raw materials cost and the cost of labor. | |||||||||||||||||
Service Products Division | |||||||||||||||||
The Service Products Division repairs or replaces electrical appliances (mostly televisions), covered by warranties or insurance companies. The Company has a price list of its services that sets forth a menu of charges for various repairs or replacements. At the completion of the repair, an invoice is prepared itemizing the parts used and fixed labor rate costs are billed by the Company. The invoice is entered into our accounting system and is recognized as revenue at that time. Our invoice is paid by the warranty insurance companies. We do not take title to the product at any point during this process. | |||||||||||||||||
As described above, in accordance with the requirements of ASC 605-10-599, the Company recognizes revenue when (1) persuasive evidence of an arrangement exists (contracts); (2) delivery has occurred; (3) the seller’s price is fixed or determinable (per the customer’s contract); and (4) collectability is reasonably assured (based upon our credit policy). | |||||||||||||||||
Share Based Expenses | |||||||||||||||||
The Company accounts for the issuance of equity instruments to acquire goods and/or services based on the fair value of the goods and services or the fair value of the equity instrument at the time of issuance, whichever is more readily determinable. The Company's accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of standards issued by the FASB. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor's performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement. | |||||||||||||||||
Stock Based Compensation | |||||||||||||||||
In December of 2004, the FASB issued a standard which applies to transactions in which an entity exchanges its equity instruments for goods or services and also applies to liabilities an entity may incur for goods or services that are based on the fair value of those equity instruments. For any unvested portion of previously issued and outstanding awards, compensation expense is required to be recorded based on the previously disclosed methodology and amounts. Prior periods presented are not required to be restated. We adopted the standard as of inception. The Company has not issued any stock options to its Board of Directors and officers as compensation for their services. If options are granted, they will be accounted for at a fair value as required by the FASB ASC 718. | |||||||||||||||||
Net Loss Per Share | |||||||||||||||||
The Company adopted the standard issued by the FASB, which requires presentation of basic earnings or loss per share and diluted earnings or loss per share. Basic income (loss) per share (“Basic EPS”) is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share (“Diluted EPS”) are similarly calculated using the treasury stock method except that the denominator is increased to reflect the potential dilution that would occur if dilutive securities at the end of the applicable period were exercised. As of November 30, 2014 and 2013, because the Company does not have any potentially dilutive securities, the accompanying presentation is only of basic loss per share. | |||||||||||||||||
Recent Accounting Pronouncements | |||||||||||||||||
In June 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-12, Compensation – Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. The new guidance requires that share-based compensation that require a specific performance target to be achieved in order for employees to become eligible to vest in the awards and that could be achieved after an employee completes the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation costs should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. This new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in this Update either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of ASU 2014-12 is not expected to have a material impact on our financial position or results of operations. | |||||||||||||||||
In June 2014, the FASB issued ASU No. 2014-10: Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation, to improve financial reporting by reducing the cost and complexity associated with the incremental reporting requirements of development stage entities. The amendments in this update remove all incremental financial reporting requirements from U.S. GAAP for development stage entities, thereby improving financial reporting by eliminating the cost and complexity associated with providing that information. The amendments in this Update also eliminate an exception provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. The amendments to eliminate that exception simplify U.S. GAAP by reducing avoidable complexity in existing accounting literature and improve the relevance of information provided to financial statement users by requiring the application of the same consolidation guidance by all reporting entities. The elimination of the exception may change the consolidation analysis, consolidation decision, and disclosure requirements for a reporting entity that has an interest in an entity in the development stage. The amendments related to the elimination of inception-to-date information and the other remaining disclosure requirements of Topic 915 should be applied retrospectively except for the clarification to Topic 275, which shall be applied prospectively. For public companies, those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early adoption is permitted. The adoption of ASU 2014-10 is not expected to have a material impact on our financial position or results of operations. | |||||||||||||||||
In July 2013, the FASB issued ASU No. 2013-11: Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. The new guidance requires that unrecognized tax benefits be presented on a net basis with the deferred tax assets for such carryforwards. This new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2013. We do not expect the adoption of the new provisions to have a material impact on our financial condition or results of operations. |
CAPITAL_STOCK
CAPITAL STOCK | 3 Months Ended |
Nov. 30, 2014 | |
CAPITAL STOCK | |
CAPITAL STOCK | NOTE 3 – CAPITAL STOCK |
The Company’s authorized capital is 74,000,000 common shares with a par value of $0.001 per share and 100,000 preferred shares with a par value of $0.001 per share. | |
2014 | |
During the six months ended February 28, 2014 the Company sold 63,333 shares for $25,000 of cash from an unrelated investor. | |
During the three months ended May 31, 2014 the Company sold 55,000 shares for $9,750 of cash from three unrelated investors. | |
During the twelve months ended August 31, 2014, $10,716 of interest expense was imputed from a promissory note with related party Hallmark Venture Group, Inc. based upon the average balance during the period at an interest rate of 10 percent. | |
2015 | |
During the three months ended November 30, 2014 the Company sold 40,000 shares for $4,000. | |
No preferred shares have been issued. | |
As of November 30, 2014 and August 31, 2014 the Company has not granted any stock options. | |
Stock Based Compensation | |
We have accounted for stock based compensation under the provisions of FASB Accounting Standards codification (ASC) 718-10-55. (Prior authoritative literature: FASB Statement 123 (R), Share-based payment.) This statement requires us to record any expense associated with the fair value of stock based compensation. Determining fair value requires input of highly subjective assumptions, including the expected price volatility. Changes in these assumptions can materially affect the fair value estimate. |
DEBT_TRANSACTIONS
DEBT TRANSACTIONS | 3 Months Ended |
Nov. 30, 2014 | |
DEBT TRANSACTIONS | |
DEBT TRANSACTIONS | NOTE 4 – DEBT TRANSACTIONS |
Convertible Note Payable | |
On June 21, 2013, for value received, the Company gave a convertible promissory note to Howard Nunn, Jr., in the original principal amount of $23,003 (the “Nunn Note”). The Nunn Note has a maturity date of September 30, 2013, and principle and accrued interest at the rate of twelve percent (12%). The Note holder has an option to convert the Note into Common Stock at the price of $0.50 per share. During the three months ended November 30, 2013, the Company repaid $5,000 to Howard Nunn under the same note. | |
On August 10, 2014, Hallmark Venture Group, Inc. acquired the Note, with principal of $27,158 and accrued interest of $3,987, to Howard Nunn, Jr. for 80,000 shares of Service Team Inc. Common Stock owned by Hallmark Venture Group, Inc. The Note was then canceled and the amounts due on the Note were added to the amounts due Hallmark Venture Group, Inc. The option to convert to shares was voided. | |
The Company evaluated the Nunn Note and determined that the shares issuable pursuant to the conversion option were determinate due to the Fixed Conversion Price and, as such, does not constitute a derivative liability as the appropriate number of shares will be available or issuable for settlement to occur. The beneficial conversion feature discount resulting from the conversion price of $0.75 below the market price on June 21, 2013 of $1.25 provided a value of $23,003; which was recorded as an increase to additional paid in capital and a reduction of debt due to the discount. The discount was amortized accordingly to the effective interest method over the term of the convertible note in the amounts of $6,833 during the three months ended November 30, 2013. Accrued interest was $0 and $0 as of November 30, 2014 and August 31, 2014, respectively. | |
Promissory Note – Related Party | |
On August 25, 2011, the Company entered into a loan agreement with Hallmark Venture Group, Inc., with no maturity date or interest rate. During the three months ended November 30, 2014 and November 30, 2013, the Company repaid funds of $24,000 and $17,000, respectively. During the three months ended November 30, 2014 and November 30, 2013, the Company has imputed interest at a reasonable rate of 10 percent totaling $466 and $10,716, respectively. |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Nov. 30, 2014 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 5 - RELATED PARTY TRANSACTIONS |
Promissory Note – Related Party | |
On August 25, 2011, the Company entered into a loan agreement with Hallmark Venture Group, Inc., with no maturity date or interest rate. During the three months ended November 30, 2014 and November 30, 2013, the Company repaid funds of $24,000 and $17,000, respectively. During the three months ended November 30, 2014 and November 30, 2013, the Company has imputed interest at a reasonable rate of 10 percent totaling $466 and $10,716, respectively. | |
Lease Commitments | |
Our principal executive offices are located in 600 square feet in a building at 18482 Park Villa Place, Villa Park, California 92861. The space is furnished by Hallmark Venture Group, Inc., a related party, at no charge. As a result of this contribution of office space, $0 and $1,500 of imputed rent expense was recorded for the three months ended November 30, 2014 and November 30, 2013. |
INCOME_TAXES
INCOME TAXES | 3 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
INCOME TAXES | |||||||||
INCOME TAXES | NOTE 6 – INCOME TAXES | ||||||||
The Company accounts for income taxes under standards issued by the FASB. Under those standards, deferred tax assets and liabilities are recognized for future tax benefits or consequences attributable to temporary differences between the financial statement 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. A valuation allowance is provided for significant deferred tax assets when it is more likely than not that such assets will not be realized through future operations. | |||||||||
No provision for federal income taxes has been recorded due to the net operating loss carry forwards totaling approximately $567,316 as of November 30, 2014 that will be offset against future taxable income. The available net operating loss carry forwards of approximately $567,316 will expire in various years through 2032. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the future tax loss carry forwards. | |||||||||
The actual income tax provisions differ from the expected amounts calculated by applying the statutory income tax rate to the Company’s loss before income taxes. The components of these differences are as follows at November 30, 2014 and August 31, 2014: | |||||||||
11/30/14 | 8/31/14 | ||||||||
Net tax loss carry-forwards | $ | 567,316 | $ | 548,338 | |||||
Statutory rate | 34 | % | 34 | % | |||||
Expected tax recovery | 192,887 | 186,435 | |||||||
Change in valuation allowance | (192,887 | ) | (186,435 | ) | |||||
Income tax provision | $ | - | $ | - | |||||
Components of deferred tax asset: | |||||||||
Non capital tax loss carry forwards | $ | 192,887 | $ | 186,435 | |||||
Less: valuation allowance | (192,887 | ) | (186,435 | ) | |||||
Net deferred tax asset | $ | - | $ | - |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Nov. 30, 2014 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 7 – COMMITMENTS AND CONTINGENCIES |
Litigation | |
None. | |
Operating Leases | |
Service Team Inc. leases a manufacturing facility at 10633 Ruchti Road, South Gate, California 90280 on a year-to-year basis for $7,000 per month. The location consists of three acres of land with two buildings—a fabrication building of 6,000 square feet and a final assembly building of 12,000 square feet. The final assembly building includes a large spray booth capable of accommodating large trucks and office space for four offices. The minimum lease payments required over the next 12 months is $84,000. | |
Our principal executive offices are located in 600 square feet in a building at 18482 Park Villa Place, Villa Park, California 92861. The space is furnished by Hallmark Venture Group, Inc., a related party, at no charge. As a result of this contribution of office space, $0 and $1,500 of imputed rent expense was recorded for the three months ended November 30, 2014 and November 30, 2013. |
SEGMENT_REPORTING
SEGMENT REPORTING | 3 Months Ended | ||||||||||||
Nov. 30, 2014 | |||||||||||||
SEGMENT REPORTING | |||||||||||||
Segment Reporting Disclosure | NOTE 8 – SEGMENT REPORTING | ||||||||||||
Our operations are managed through two operating segments, as shown below. We disclose the results of each of our operating segments in accordance with ASC 280, Segment Reporting. Each of the operating segments is managed under a common structure chaired by our Chief Executive Officer and discrete financial information for both of the segments is available. Our Chief Executive Officer uses the operating results of each of the two operating segments for performance evaluation and resource allocation and, as such, is the chief operating decision maker. The activities of each of our segments from which they earn revenues and incur expenses are described below: | |||||||||||||
? | The Trade Leasing segment is involved in the manufacture and repair of truck bodies. | ||||||||||||
? | The Service Products segment specializes in electronics service, repair and sales. | ||||||||||||
Summarized financial information concerning reportable segments is shown in the following table for the three months ended: | |||||||||||||
November 30, 2014: | |||||||||||||
Trade Leasing | Service Products | Total | |||||||||||
Revenues | $ | 553,627 | $ | - | $ | 553,627 | |||||||
Cost of Sales | (513,383 | ) | - | (513,383 | ) | ||||||||
Gross Margin | 40,244 | - | 40,244 | ||||||||||
Operating Expense | (59,222 | ) | - | (59,222 | ) | ||||||||
Operating Loss | (18,978 | ) | - | (18,978 | ) | ||||||||
Other Expense | - | (466 | ) | (466 | ) | ||||||||
Net Loss | $ | (18,978 | ) | $ | (466 | ) | $ | (19,444 | ) | ||||
November 30, 2013: | |||||||||||||
Trade Leasing | Service Products | Total | |||||||||||
Revenues | $ | 477,223 | $ | - | $ | 477,223 | |||||||
Cost of Sales | (385,368 | ) | (47,336 | ) | (432,704 | ) | |||||||
Gross Margin | 91,855 | (47,336 | ) | 44,519 | |||||||||
Operating Expense | (28,381 | ) | (7,652 | ) | (36,033 | ) | |||||||
Operating Income (Loss) | 63,474 | (54,988 | ) | 8,486 | |||||||||
Other Expense | - | (12,223 | ) | (12,223 | ) | ||||||||
Net Income (Loss) | $ | 63,474 | $ | (67,211 | ) | $ | (3,737 | ) |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Nov. 30, 2014 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 9 – SUBSEQUENT EVENTS |
There were no subsequent events through the date that the financial statements were issued. |
ACCOUNTING_POLICIES_POLICIES
ACCOUNTING POLICIES (POLICIES) | 3 Months Ended | ||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||
ACCOUNTING POLICIES (POLICIES) | |||||||||||||||||
Basis of Presentation | Basis of Presentation | ||||||||||||||||
The consolidated financial statements presented in this report are the combined financial reports of Trade Leasing, Inc. and Service Team Inc. | |||||||||||||||||
The Company maintains its accounting records on an accrual basis in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP). | |||||||||||||||||
The consolidated financial statements present the Balance Sheet, Statements of Operations, Shareholders’ Deficit and Cash Flows of the Company. These consolidated financial statements are presented in United States dollars. The accompanying audited, consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q. All adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations for the interim periods have been made and are of a recurring nature unless otherwise disclosed herein. | |||||||||||||||||
Principles of Consolidation | Principles of Consolidation | ||||||||||||||||
The accompanying consolidated financial statements include the accounts of Service Team Inc. and Trade Leasing, Inc. both of which are under common control and ownership. The condensed consolidated financial statements herein contain the operations of the wholly-owned subsidiaries listed above. All significant inter-company transactions have been eliminated in the preparation of these financial statements. | |||||||||||||||||
Use of Estimates | Use of Estimates | ||||||||||||||||
The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. | |||||||||||||||||
Going Concern | Going Concern | ||||||||||||||||
The Company's consolidated financial statements are prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America, and have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. However, we have incurred continued losses, ongoing negative cash flows from operations, have a net working capital deficiency of $134,861, and have an accumulated deficit of approximately $1,129,221 as of November 30, 2014. There can be no assurance that the Company will be successful in order to continue as a going concern. The Company is funding its operations by issuing common shares and debt. As of November 30, 2014, the Company had sold 6,000,000 shares to Hallmark Venture Group, Inc. at $0.001 per share for net funds to the Company of $6,000 and received capital contributions of $23,027. The Company has also sold 1,969,014 shares to various individuals and received net funds of $340,383. Hallmark Venture Group, Inc. has also loaned the Company $219,215. The major shareholder, Hallmark Venture Group, Inc., has committed to advancing additional funds as may be required for the operation of the Company. We cannot be certain that capital will be provided when it is required. | |||||||||||||||||
Cash and Equivalents | Cash and Equivalents | ||||||||||||||||
Cash and equivalents include investments with initial maturities of three months or less. The Company maintains its cash balances at credit-worthy financial institutions that are insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250,000. There were no cash equivalents at November 30, 2014 or August 31, 2014. | |||||||||||||||||
Concentration of Credit Risk | Concentration of Credit Risk | ||||||||||||||||
Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, are cash and cash equivalents. The Company places its cash and temporary cash investments with credit quality institutions. At times, such investments may be in excess of FDIC insurance limits. | |||||||||||||||||
Accounts Receivable | Accounts Receivable | ||||||||||||||||
All accounts receivable are due thirty (30) days from the date billed. If the funds are not received within thirty (30) days the customer is contacted to arrange payment. The Company uses the allowance method to account for uncollectable accounts receivable. All accounts were considered collectable at period end and no allowance for bad debts was considered necessary. The allowance for doubtful accounts as of November 30, 2014 and August 31, 2014 was $18,488 and $2,802, respectively. | |||||||||||||||||
Accounts Receivable and Revenue Concentrations | Accounts Receivable and Revenue Concentrations | ||||||||||||||||
The Company’s wholly owned subsidiary, Trade Leasing, Inc., has more than 400 customers. Three customers represented about 23%, 11% and 10% of total receivables as of November 30, 2014.One customer represented about 20% of total receivables as of August 31, 2014. | |||||||||||||||||
During the three months ended November 30, 2014, the Company had one customer that represented 19% of total sales. During the three months ended November 30, 2013, the Company had one customer that represented about 22% of total sales. | |||||||||||||||||
Inventory | Inventory | ||||||||||||||||
The Company does not own inventory, materials are purchased as needed from local suppliers; therefore, there was no additional inventory on hand at November 30, 2014 or August 31, 2014. | |||||||||||||||||
Property and Equipment | Property and Equipment | ||||||||||||||||
Equipment, vehicles and furniture, which are recorded at cost, consist primarily of fabrication equipment and are depreciated using the straight-line method over the estimated useful lives of the related assets (generally fifteen years or less). Costs incurred for maintenance and repairs are expensed as incurred and expenditures for major replacements and improvements are capitalized and depreciated over their estimated remaining useful lives. There was $497 of depreciation expense during the three months ended November 30, 2014. There was no depreciation expense recorded during the three months ended November 30, 2013. | |||||||||||||||||
Net property and equipment were as follows at November 30, 2014 and August 31, 2014: | |||||||||||||||||
11/30/14 | 8/31/14 | ||||||||||||||||
Equipment | $ | 243,542 | $ | 243,444 | |||||||||||||
Vehicles | 15,000 | 15,000 | |||||||||||||||
Furniture | 1,500 | 1,500 | |||||||||||||||
Subtotal | 260,042 | 259,944 | |||||||||||||||
Less: accumulated depreciation | (250,800 | ) | (250,303 | ) | |||||||||||||
Total | $ | 9,242 | $ | 9,641 | |||||||||||||
Lease Commitments | Lease Commitments | ||||||||||||||||
Service Team Inc. leases a manufacturing facility at 10633 Ruchti Road, South Gate, California 90280 on a year-to-year basis for $7,000 per month. The location consists of three acres of land with two buildings a fabrication building of 6,000 square feet and a final assembly building of 12,000 square feet. The final assembly building includes a large spray booth capable of accommodating large trucks and office space for four offices. | |||||||||||||||||
Our principal executive offices are located in 600 square feet in a building at 18482 Park Villa Place, Villa Park, California 92861. The space is furnished by Hallmark Venture Group, Inc., a related party, at no charge. As a result of this contribution of office space, $0 and $1,500 of imputed rent expense was recorded for the three months ended November 30, 2014 and 2013, respectively. | |||||||||||||||||
Beneficial Conversion Features | Beneficial Conversion Features | ||||||||||||||||
From time to time, the Company may issue convertible notes that may contain an imbedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method. | |||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | ||||||||||||||||
The Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820 on June 6, 2011. Under this FASB, fair value is defined 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 (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value. | |||||||||||||||||
The Company has various financial instruments that must be measured under the new fair value standard including: cash, convertible notes payable, accrued expenses, promissory notes payable, accounts receivable and accounts payable. The Company’s financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows: | |||||||||||||||||
Level 1 – Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. The fair value of the Company’s cash is based on quoted prices and therefore classified as Level 1. | |||||||||||||||||
Level 2 - Inputs include quoted prices for similar assets and 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, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). | |||||||||||||||||
Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability. | |||||||||||||||||
Cash, accounts receivable, accounts payable, promissory notes and accrued expenses reported on the balance sheet are estimated by management to approximate fair market value due to their short term nature. | |||||||||||||||||
The following table presents assets that were measured and recognized at fair value as of November 30, 2014 on a recurring basis: | |||||||||||||||||
Total | |||||||||||||||||
Realized | |||||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Loss | |||||||||||||
$ | - | $ | - | $ | $ | - | |||||||||||
Total | $ | - | $ | - | $ | $ | - | ||||||||||
The following table presents assets that were measured and recognized at fair value as of August 31, 2014 on a recurring basis: | |||||||||||||||||
Total | |||||||||||||||||
Realized | |||||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Loss | |||||||||||||
$ | - | $ | - | $ | $ | - | |||||||||||
Total | $ | - | $ | - | $ | $ | - | ||||||||||
Income Taxes | Income Taxes | ||||||||||||||||
In assessing the realization of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on the level of historical operating results and the uncertainty of the economic conditions, the Company has recorded a full valuation allowance against its deferred tax assets at November 30, 2014 and August 31, 2014 where it cannot conclude that it is more likely than not that those assets will be realized. | |||||||||||||||||
Revenue Recognition | Revenue Recognition | ||||||||||||||||
Trade Leasing Division | |||||||||||||||||
The Trade Leasing Division receives orders from customers to build or repair truck bodies. The company builds the requested product. At the completion of the product the truck is delivered to the customer. If the customer accepts the product Trade Leasing Inc. issues an invoice to the customer for the job. The invoice is entered into our accounting system and is recognized as revenue at that time. | |||||||||||||||||
In the Trade Leasing Division we use the completed contract method for truck bodies built, which typically have construction periods of 15 days or less. Contracts are considered complete when title has passed, the customer has accepted the product and we do not retain risks or rewards of ownership of the truck bodies. Losses are accrued if manufacturing costs are expected to exceed manufacturing contract revenue. Manufacturing expenses are primarily composed of aluminum cost, which is the largest component of our raw materials cost and the cost of labor. | |||||||||||||||||
Service Products Division | |||||||||||||||||
The Service Products Division repairs or replaces electrical appliances (mostly televisions), covered by warranties or insurance companies. The Company has a price list of its services that sets forth a menu of charges for various repairs or replacements. At the completion of the repair, an invoice is prepared itemizing the parts used and fixed labor rate costs are billed by the Company. The invoice is entered into our accounting system and is recognized as revenue at that time. Our invoice is paid by the warranty insurance companies. We do not take title to the product at any point during this process. | |||||||||||||||||
As described above, in accordance with the requirements of ASC 605-10-599, the Company recognizes revenue when (1) persuasive evidence of an arrangement exists (contracts); (2) delivery has occurred; (3) the seller’s price is fixed or determinable (per the customer’s contract); and (4) collectability is reasonably assured (based upon our credit policy). | |||||||||||||||||
Share Based Expenses | Share Based Expenses | ||||||||||||||||
The Company accounts for the issuance of equity instruments to acquire goods and/or services based on the fair value of the goods and services or the fair value of the equity instrument at the time of issuance, whichever is more readily determinable. The Company's accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of standards issued by the FASB. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor's performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement. | |||||||||||||||||
Stock Based Compensation | Stock Based Compensation | ||||||||||||||||
In December of 2004, the FASB issued a standard which applies to transactions in which an entity exchanges its equity instruments for goods or services and also applies to liabilities an entity may incur for goods or services that are based on the fair value of those equity instruments. For any unvested portion of previously issued and outstanding awards, compensation expense is required to be recorded based on the previously disclosed methodology and amounts. Prior periods presented are not required to be restated. We adopted the standard as of inception. The Company has not issued any stock options to its Board of Directors and officers as compensation for their services. If options are granted, they will be accounted for at a fair value as required by the FASB ASC 718. | |||||||||||||||||
Net Loss Per Share | Net Loss Per Share | ||||||||||||||||
The Company adopted the standard issued by the FASB, which requires presentation of basic earnings or loss per share and diluted earnings or loss per share. Basic income (loss) per share (“Basic EPS”) is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share (“Diluted EPS”) are similarly calculated using the treasury stock method except that the denominator is increased to reflect the potential dilution that would occur if dilutive securities at the end of the applicable period were exercised. As of November 30, 2014 and 2013, because the Company does not have any potentially dilutive securities, the accompanying presentation is only of basic loss per share. | |||||||||||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | ||||||||||||||||
In June 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-12, Compensation – Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. The new guidance requires that share-based compensation that require a specific performance target to be achieved in order for employees to become eligible to vest in the awards and that could be achieved after an employee completes the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation costs should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. This new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in this Update either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of ASU 2014-12 is not expected to have a material impact on our financial position or results of operations. | |||||||||||||||||
In June 2014, the FASB issued ASU No. 2014-10: Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation, to improve financial reporting by reducing the cost and complexity associated with the incremental reporting requirements of development stage entities. The amendments in this update remove all incremental financial reporting requirements from U.S. GAAP for development stage entities, thereby improving financial reporting by eliminating the cost and complexity associated with providing that information. The amendments in this Update also eliminate an exception provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. The amendments to eliminate that exception simplify U.S. GAAP by reducing avoidable complexity in existing accounting literature and improve the relevance of information provided to financial statement users by requiring the application of the same consolidation guidance by all reporting entities. The elimination of the exception may change the consolidation analysis, consolidation decision, and disclosure requirements for a reporting entity that has an interest in an entity in the development stage. The amendments related to the elimination of inception-to-date information and the other remaining disclosure requirements of Topic 915 should be applied retrospectively except for the clarification to Topic 275, which shall be applied prospectively. For public companies, those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early adoption is permitted. The adoption of ASU 2014-10 is not expected to have a material impact on our financial position or results of operations. | |||||||||||||||||
In July 2013, the FASB issued ASU No. 2013-11: Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. The new guidance requires that unrecognized tax benefits be presented on a net basis with the deferred tax assets for such carryforwards. This new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2013. We do not expect the adoption of the new provisions to have a material impact on our financial condition or results of operations. |
Schedule_of_Net_property_and_e
Schedule of Net property and equipment (Tables) | 3 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Schedule of Net property and equipment | |||||||||
Schedule of Net property and equipment | Net property and equipment were as follows at November 30, 2014 and August 31, 2014: | ||||||||
11/30/14 | 8/31/14 | ||||||||
Equipment | $ | 243,542 | $ | 243,444 | |||||
Vehicles | 15,000 | 15,000 | |||||||
Furniture | 1,500 | 1,500 | |||||||
Subtotal | 260,042 | 259,944 | |||||||
Less: accumulated depreciation | (250,800 | ) | (250,303 | ) | |||||
Total | $ | 9,242 | $ | 9,641 |
FAIR_VALUE_MEASUREMENTS_TABLES
FAIR VALUE MEASUREMENTS (TABLES) | 3 Months Ended | ||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
FAIR VALUE MEASUREMENTS | The following table presents assets that were measured and recognized at fair value as of November 30, 2014 on a recurring basis: | ||||||||||||||||
Total | |||||||||||||||||
Realized | |||||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Loss | |||||||||||||
$ | - | $ | - | $ | $ | - | |||||||||||
Total | $ | - | $ | - | $ | $ | - | ||||||||||
The following table presents assets that were measured and recognized at fair value as of August 31, 2014 on a recurring basis: | |||||||||||||||||
Total | |||||||||||||||||
Realized | |||||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Loss | |||||||||||||
$ | - | $ | - | $ | $ | - | |||||||||||
Total | $ | - | $ | - | $ | $ | - |
COMPONENTS_OF_INCOMETAX_EXPENS
COMPONENTS OF INCOMETAX EXPENSE (TABLES) | 3 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
COMPONENTS OF INCOMETAX EXPENSE | |||||||||
COMPONENTS OF INCOME TAX EXPENSE | The actual income tax provisions differ from the expected amounts calculated by applying the statutory income tax rate to the Company’s loss before income taxes. The components of these differences are as follows at November 30, 2014 and August 31, 2014: | ||||||||
11/30/14 | 8/31/14 | ||||||||
Net tax loss carry-forwards | $ | 567,316 | $ | 548,338 | |||||
Statutory rate | 34 | % | 34 | % | |||||
Expected tax recovery | 192,887 | 186,435 | |||||||
Change in valuation allowance | (192,887 | ) | (186,435 | ) | |||||
Income tax provision | $ | - | $ | - | |||||
Components of deferred tax asset: | |||||||||
Non capital tax loss carry forwards | $ | 192,887 | $ | 186,435 | |||||
Less: valuation allowance | (192,887 | ) | (186,435 | ) | |||||
Net deferred tax asset | $ | - | $ | - |
SEGMENT_REPORTING_TABLES
SEGMENT REPORTING (TABLES) | 3 Months Ended | ||||||||||||
Nov. 30, 2014 | |||||||||||||
SCHEDULE OF SEGMENT REPORTING | |||||||||||||
Schedule of Summarized financial information concerning reportable segments | Summarized financial information concerning reportable segments is shown in the following table for the three months ended: | ||||||||||||
November 30, 2014: | |||||||||||||
Trade Leasing | Service Products | Total | |||||||||||
Revenues | $ | 553,627 | $ | - | $ | 553,627 | |||||||
Cost of Sales | (513,383 | ) | - | (513,383 | ) | ||||||||
Gross Margin | 40,244 | - | 40,244 | ||||||||||
Operating Expense | (59,222 | ) | - | (59,222 | ) | ||||||||
Operating Loss | (18,978 | ) | - | (18,978 | ) | ||||||||
Other Expense | - | (466 | ) | (466 | ) | ||||||||
Net Loss | $ | (18,978 | ) | $ | (466 | ) | $ | (19,444 | ) | ||||
November 30, 2013: | |||||||||||||
Trade Leasing | Service Products | Total | |||||||||||
Revenues | $ | 477,223 | $ | - | $ | 477,223 | |||||||
Cost of Sales | (385,368 | ) | (47,336 | ) | (432,704 | ) | |||||||
Gross Margin | 91,855 | (47,336 | ) | 44,519 | |||||||||
Operating Expense | (28,381 | ) | (7,652 | ) | (36,033 | ) | |||||||
Operating Income (Loss) | 63,474 | (54,988 | ) | 8,486 | |||||||||
Other Expense | - | (12,223 | ) | (12,223 | ) | ||||||||
Net Income (Loss) | $ | 63,474 | $ | (67,211 | ) | $ | (3,737 | ) |
Organization_Narrative_Details
Organization Narrative (Details) | Jun. 05, 2013 |
Organization Details | |
Number of shares of common stock acquired in Trade Leasing Inc. A commonly held company | 4,000,000 |
Accounts_Receivable_and_Revenu
Accounts Receivable and Revenue Concentrations (Details) | Nov. 30, 2014 | Aug. 31, 2014 |
Accounts Receivable and Revenue Concentrations Details | ||
Percentage of total receivables by one customer | 23.00% | 20.00% |
Percentage of total sales by second customer | 11.00% | |
Percentage of total receivables by third customer | 10.00% | |
Percentage of one customer that represented total sales | 19.00% | |
Company had one customer that represented about of total sales | 22.00% |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | Nov. 30, 2014 | Aug. 31, 2014 |
Property and Equipment {1} | ||
Equipment | $243,542 | $243,444 |
Vehicles | 15,000 | 15,000 |
Furniture | 1,500 | 1,500 |
Subtotal | 260,042 | 259,944 |
Less: accumulated depreciation | -250,800 | -250,303 |
Total fixed assets, net | $9,242 | $9,641 |
Lease_Commitments_Details
Lease Commitments (Details) (USD $) | 3 Months Ended | |
Nov. 30, 2014 | Nov. 30, 2013 | |
Lease Commitments: | ||
Lease of California office premises per month | $7,000 | $0 |
Imputed rent expense recorded | $0 | $1,500 |
Capital_stock_transactions_DET
Capital stock transactions (DETAILS) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Nov. 30, 2014 | 31-May-14 | Feb. 28, 2014 | Aug. 31, 2014 | |
CAPITAL STOCK TRANSACTIONS: | ||||
Authorized common shares | 74,000,000 | |||
Common shares par value | $0.00 | |||
Authorized preferred shares | 100,000 | |||
Preferred shares par value | $0.00 | |||
Company sold shares | 40,000 | 55,000 | 63,333 | |
Company sold shares of cash from an unrelated investors | $4,000 | $9,750 | $25,000 | |
Interest expense was imputed from a promissory note | $10,716 |
DEBT_TRANSACTIONS_Details
DEBT TRANSACTIONS (Details) (USD $) | Nov. 30, 2014 | Aug. 31, 2014 | Aug. 10, 2014 | Jun. 21, 2013 |
DEBT TRANSACTIONS DETAILS: | ||||
Convertible promissory note issued to Howard Nunn, in the original principal amount of | $23,003 | |||
interest accrued at the rate of twelve percent | 12.00% | |||
Conversion price of the note into Common Stock at the price | $0.50 | |||
Hallmark Venture Group, Inc. acquired the Note, with principal amount | 27,158 | |||
Accured Interest on Hallmark Venture Group Inc. | 3,987 | |||
Hallmark Venture Group, Inc. acquired the Note, to Howard Nunn, Jr. for shares of Services Team Inc | 80,000 | |||
Beneficial conversion feature discount resulting from the conversion price | $0.75 | |||
Provided a value of | 23,003 | |||
Effective interest method over the term of the convertible note in the amount | 6,833 | |||
Accrued interest | 0 | 0 | ||
Repaid funds | 24,000 | 17,000 | ||
Imputed interest at a reasonable rate | 10.00% | 10.00% | ||
Imputed interest at a reasonable rate totaling | $466 | $10,716 |
Components_of_Income_Taxes_Det
Components of Income Taxes (Details) (USD $) | 3 Months Ended | |
Nov. 30, 2014 | Aug. 31, 2014 | |
Components of Income Taxes: | ||
Net tax loss carry-forwards | $567,316 | $548,338 |
Statutory rate | 0.34 | 0.34 |
Expected tax recovery | 192,887 | 186,435 |
Change in valuation allowance | -192,887 | -186,435 |
Income tax provision | $0 | $0 |
Components_of_deferred_tax_ass
Components of deferred tax assets (Details) (USD $) | Nov. 30, 2014 | Aug. 31, 2014 |
Components of deferred tax asset: | ||
Non capital tax loss carry forwards | $192,887 | $186,435 |
Less: valuation allowance | -192,887 | -186,435 |
Net deferred tax asset | $0 | $0 |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES Operating Leases (Details) (USD $) | 3 Months Ended | |
Nov. 30, 2014 | Nov. 30, 2013 | |
COMMITMENTS AND CONTINGENCIES Operating Leases: | ||
Lease of California office premises per month | $7,000 | $0 |
Imputed rent expense recorded | $0 | $1,500 |
Summarized_financial_informati
Summarized financial information concerning reportable segments (Details) (USD $) | 3 Months Ended | |
Nov. 30, 2014 | Nov. 30, 2013 | |
Trade Leasing | ||
Revenues | $553,627 | $477,223 |
Cost of Sales | -513,383 | -385,368 |
Gross Margin | 40,244 | 91,855 |
Operating Expense | -59,222 | -28,381 |
Operating Loss | -18,978 | 63,474 |
Net Loss | -18,978 | 63,474 |
Service Products | ||
Cost of Sales | 0 | -47,336 |
Gross Margin | 0 | -47,336 |
Operating Expense | 0 | -7,652 |
Operating Loss | 0 | -54,988 |
Other Expense | -466 | -12,223 |
Net Loss | -466 | -67,211 |
Total | ||
Revenues | 553,627 | 477,223 |
Cost of Sales | -513,383 | -432,704 |
Gross Margin | 40,244 | 44,519 |
Operating Expense | -59,222 | -36,033 |
Operating Loss | -18,978 | 8,486 |
Other Expense | -466 | -12,223 |
Net Loss | ($19,444) | ($3,737) |