Document and Entity Information
Document and Entity Information | 9 Months Ended |
May 31, 2016USD ($)shares | |
Document and Entity Information | |
Entity Registrant Name | Service Team Inc. |
Document Type | 10-Q |
Document Period End Date | May 31, 2016 |
Amendment Flag | false |
Entity Central Index Key | 1,535,635 |
Current Fiscal Year End Date | --08-31 |
Entity Common Stock, Shares Outstanding | 102,042,652 |
Entity Filer Category | Smaller Reporting Company |
Entity Current Reporting Status | No |
Entity Voluntary Filers | Yes |
Entity Well-known Seasoned Issuer | No |
Document Fiscal Year Focus | 2,016 |
Document Fiscal Period Focus | Q3 |
Entity Public Float | $ | $ 0 |
Entity Preferred Stock, Shares Outstanding | 100,000 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | May 31, 2016 | Aug. 31, 2015 |
ASSETS | ||
Cash | $ 56,777 | $ 5,834 |
Accounts receivable | 218,093 | 179,292 |
Convertible note receivable | 25,000 | |
Deferred financing costs | 11,986 | |
Total current assets | 299,870 | 197,121 |
Property and equipment, net | 56,106 | 7,977 |
Other assets | 14,000 | 9,000 |
TOTAL ASSETS | 369,976 | 214,098 |
LIABILITIES & SHAREHOLDERS' (DEFICIT) | ||
Accounts payable | 134,183 | 112,596 |
Convertible note - related party, net of debt discounts of $6,341 and $0, respectively | 1,159 | 32,318 |
Convertible note - third party, net of debt discounts of $77,011 and $0, respectively | 46,239 | 30,001 |
Contingent Liability | 54,100 | |
Accrued expense | 74,768 | 77,738 |
Accrued interest | 12,798 | 6,367 |
Total current liabilities | 269,147 | 313,120 |
TOTAL LIABILITIES | 269,147 | 313,120 |
Common stock, $0.001 par value, 500,000,000 authorized, 102,042,652 and 13,430,624 issued and outstanding as of May 31, 2016 and August 31, 2015, respectively. | 102,043 | 13,431 |
Preferred stock - Series A, $0.001 par value, 100,000 authorized, 100,000 and 0 issued and outstanding as of May 31, 2016 and August 31, 2015, respectively. | 100 | 100 |
Additional paid in capital | 1,959,197 | 1,612,788 |
Subscription payable | 22,000 | |
Accumulated deficit | (1,960,511) | (1,747,341) |
TOTAL SHAREHOLDERS' EQUITY (DEFICIT) | 100,829 | (99,022) |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) | $ 369,976 | $ 214,098 |
CONSOLIDATED BALANCE SHEETS (U3
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | May 31, 2016 | Aug. 31, 2015 |
Consolidated Balance Sheets | ||
Common Stock, par or stated value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 500,000,000 | 500,000,000 |
Common Stock, shares issued | 102,042,652 | 13,430,624 |
Common Stock, shares outstanding | 102,042,652 | 13,430,624 |
Preferred Stock, par or stated value | $ 0.001 | $ .001 |
Preferred Stock, shares authorized | 100,000 | 100,000 |
Preferred Stock, shares issued | 100,000 | 100,000 |
Preferred Stock, shares outstanding | 100,000 | 100,000 |
CONSOLIDATED STATEMENT OF OPERA
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2016 | May 31, 2015 | |
REVENUES | ||||
Sales | $ 940,796 | $ 664,454 | $ 2,647,289 | $ 1,830,475 |
COST OF SALES | ||||
Cost of sales | 735,369 | 415,199 | 2,152,438 | 1,486,905 |
Gross Margin | 205,427 | 249,255 | 494,851 | 343,570 |
OPERATING EXPENSES | ||||
General & administrative expenses | 160,688 | 119,998 | 493,169 | 788,158 |
Depreciation expense | 1,331 | 1,491 | 4,373 | 1,491 |
Total Operating Expenses | 162,019 | 121,489 | 497,542 | 789,649 |
LOSS FROM OPERATIONS | 43,408 | 127,766 | (2,691) | (446,079) |
OTHER INCOME (EXPENSE) | ||||
Interest Expense | (187,287) | (13,898) | (264,579) | (18,056) |
Gain on contingent consideration | 54,100 | |||
Total other (expense) income | (187,287) | (13,898) | (210,479) | (18,056) |
NET LOSS | $ (143,879) | $ 113,868 | $ (213,170) | $ (464,135) |
Weighted Average number of common shares outstanding - basic and fully diluted | 78,786,917 | 12,525,647 | 38,815,579 | 12,521,105 |
Net loss per share - basic and fully diluted | $ 0 | $ 0.01 | $ (0.01) | $ (0.04) |
CONSOLIDATED STATEMENT OF SHARE
CONSOLIDATED STATEMENT OF SHAREHOLDERS' (DEFICIT) FOR THE YEAR (Unaudited) - USD ($) | Common Stock | Preferred Stock | Additional Paid-In Capital | Subscription Payable | Accumulated Deficit | Total |
Beginning Balance at Aug. 31, 2014 | $ 12,486 | $ 995,650 | $ (1,109,777) | $ (101,641) | ||
Beginning Balance (in shares) at Aug. 31, 2014 | 12,485,647 | |||||
Imputed Interest on Related Party Debt | 683 | 683 | ||||
Beneficial conversion feature | 104,500 | 104,500 | ||||
Shares issued for Service | $ 100 | 498,900 | 499,000 | |||
Shares Issued for Service (in shares) | 100,000 | |||||
Shares issued for Cash | $ 40 | 3,960 | 4,000 | |||
Shares Issued for Cash (in shares) | 40,000 | |||||
Shares Issued for Note Conversion | $ 905 | 9,095 | 10,000 | |||
Shares Issued for Note Conversion (in shares) | 904,977 | |||||
Subscription Payable for Note Conversion | 22,000 | 22,000 | ||||
Net Income (Loss) | (637,564) | (637,564) | ||||
Ending Balance at Aug. 31, 2015 | $ 13,431 | $ 100 | 1,612,788 | 22,000 | (1,747,341) | (99,022) |
Ending Balance (in shares) at Aug. 31, 2015 | 13,430,624 | 100,000 | ||||
Beneficial conversion feature | 203,204 | 203,204 | ||||
Shares issued for Subscription Payable | $ 1,991 | 20,009 | (22,000) | |||
Shares issued for Subscription Payable (in shares) | 1,990,950 | |||||
Shares Issued for Note Conversion | $ 86,621 | 123,196 | 209,817 | |||
Shares Issued for Note Conversion (in shares) | 86,621,078 | |||||
Net Income (Loss) | (213,170) | (213,170) | ||||
Ending Balance at May. 31, 2016 | $ 102,043 | $ 100 | $ 1,959,197 | $ (1,960,511) | $ 100,829 | |
Ending Balance (in shares) at May. 31, 2016 | 102,042,652 | 100,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2016 | May 31, 2015 | Aug. 31, 2015 | |
Cash flows from operating activities | |||||
Net Loss | $ (143,879) | $ 113,868 | $ (213,170) | $ (464,135) | $ (637,564) |
Adjustments to reconcile net income (loss) with cash provided by (used in) operations: | |||||
Debt discount amortization | 215,879 | 10,126 | |||
Stock based compension | 499,000 | ||||
Deferred financing cost amortization | 11,986 | 5,514 | |||
Depreciation | 1,331 | 1,491 | 4,373 | 1,491 | |
Gain on contingent consideration | (54,100) | ||||
Imputed interest | 683 | ||||
Change in operating assets and liabilities: | |||||
Accounts receivable | (38,801) | (31,236) | |||
Accrued expenses | 39,182 | (12,914) | |||
Prepaid expenses | (5,000) | ||||
Accounts payable | 43,412 | (33,780) | |||
Net Cash Provided by (Used in) Operating Activities. | 3,761 | (25,251) | |||
Cash flows from investing activities | |||||
Cash paid for the purchase of fixed assets | (52,827) | ||||
Cash paid for convertible note receivable | (25,000) | ||||
Net Cash Used In Investing Activities | (77,827) | ||||
Cash flows from financing activities | |||||
Proceeds from sale of stock | 4,000 | ||||
Payments on loans with Related Party - Hallmark Venture Group, Inc. | (27,158) | ||||
Cash overdraft | 20,770 | ||||
Deferred financing costs | (17,500) | ||||
Proceeds from convertible notes payable - third party | 117,500 | 50,000 | |||
Proceeds from convertible notes payable - related party | 7,500 | ||||
Net Cash Provided By (Used In) Financing Activities | 125,000 | 30,112 | |||
Net Increase (Decrease) In Cash and Cash Equivalents | 50,934 | 4,861 | |||
Cash at Beginning of Period | 5,843 | 7,457 | 7,457 | ||
Cash at End of Period | $ 56,777 | $ 12,318 | 56,777 | 12,318 | 5,843 |
Supplemental Disclosures | |||||
Interest Paid | |||||
Taxes Paid | |||||
Non-Cash Transactions | |||||
Beneficial conversion feature | 203,204 | 22,000 | |||
Conversion of accounts payable into convertible debt | 21,500 | ||||
Conversion of accrued interest to convertible debt | 24,371 | ||||
Common shares issued for debt conversions | 209,817 | $ 10,000 | |||
Shares issued for stock payable | $ 22,000 |
ORGANIZATION
ORGANIZATION | 9 Months Ended |
May 31, 2016 | |
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 ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
May 31, 2016 | |
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 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 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. The Company has an accumulated deficit as of May 31, 2016 of $1,960,511. and is dependent on raising capital through placement of our common stock in order to implement its business plan. There can be no assurance that the Company will be successful in order to continue as a going concern. The Company is funding its initial operations by issuing common shares and debt. 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 May 31, 2016, or August 31, 2015. 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. 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 Inventory The Company does not own inventory, materials are purchased as needed from local suppliers; therefore, there was no additional inventory on hand at May 31, 2016 or August 31, 2015. 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 15 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 $4,373 and $1,491 of depreciation expense during the nine months ended May 31, 2016 and 2015, respectively. Net property and equipment were as follows at May 31, 2016 and August 31, 2015: 5/31/16 8/31/15 Equipment $ 243,444 $ 243,444 Vehicles 15,000 15,000 Furniture 1,500 1,500 Leasehold improvements 52,827 Subtotal 312,771 259,944 Less: accumulated depreciation (256,665 ) (251,967 ) Total Fixed Assets, Net $ 56,106 $ 7,977 Lease Commitments Service Team Inc., effective September 1, 2015, leased new facilities at 1818 Rosslynn Avenue, Fullerton, California, to manufacture its products. The Company has moved from 10633 Ruchti Road, South Gate, California, effective October 1, 2015. The new facility is leased for six and one half years at a price of $10,000 per month, for the first six months; and, $14,000 per month thereafter. Service Team Inc pays for the fire insurance and property taxes on the building estimated to be approximately $2,000 per month. The location consists of three acres of land and one building of approximately 30,000 square feet. The facility is approximately one-third larger than the prior facility in South Gate. 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. 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, convertible 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 and liabilities that were measured and recognized at fair value as of May 31, 2016 on a recurring basis: Total Realized Description Level 1 Level 2 Level 3 Loss $ - $ - $ - $ - Total $ - $ - $ - $ - The following table presents assets and liabilities that were measured and recognized at fair value as of August 31, 2015 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 May 31, 2016 and August 31, 2015 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 shut down in fiscal 2013 repaired or replaced electrical appliances (mostly televisions), covered by warranties or insurance companies. The Company had 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 was prepared itemizing the parts used and fixed labor rate costs billed by the Company. The invoice was entered into our accounting system and recognized as revenue at that time. Our invoice was paid by the warranty insurance companies. We did 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 recognized 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 . 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. During the three and nine month periods ended May 31, 2016 and May 31, 2015, because the Company operations resulted in net losses, no additional dilutive securities were included in the Diluted EPS as that would be anti-dilutive to the resulting diluted earnings 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. |
CAPITAL STOCK
CAPITAL STOCK | 9 Months Ended |
May 31, 2016 | |
Capital Stock | |
CAPITAL STOCK | NOTE 3 CAPITAL STOCK The Company's authorized capital is 500,000,000 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. On December 2, 2015 the Company increased its authorized capital stock to 500,000,000 common shares. Nine month period ended May 31, 2016 During September 2015, Tangers Investment Group LLC was issued 1,990,950 shares as payment for the $22,000 of subscriptions payable accrued at August 31, 2015. On November 25, 2015, Tangers Investment Group LLC converted $8,095 of its Note in the amount of into 1,541,401 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On January 11, 2016, Tangers Investment Group LLC converted $6,190 of its Note in the amount of into 1,695,890 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On February 3, 2016, Tangers Investment Group LLC converted $2,876 of its Note in the amount of into 2,054,286 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On February 10, 2016, Tangers Investment Group LLC converted $3,450 of its Note in the amount of into 2,464,286 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On March 1, 2016, Tangers Investment Group LLC converted $3,327 of its Note in the amount of into 2,376,464 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On March 4, 2016, Tangers Investment Group LLC converted $3,328 of its Note in the amount of into 2,016,964 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On April 4, 2016, Tangers Investment Group LLC converted $13,000 of its Note in the amount of into 5,895,692 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On April 5, 2016, Tangers Investment Group LLC converted $5,000 of its Note in the amount of into 1,883,239 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On April 18, 2016, Tangers Investment Group LLC converted $13,621 of its Note in the amount of into 4,656,726 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On April 28, 2016, Tangers Investment Group LLC converted $12,705 of its Note in the amount of into 4,411,458 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On May 18, 2016, Tangers Investment Group LLC converted $13,870 of its Note in the amount of into 5,137,037 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On January 19, 2016, Vis Vires Group converted $2,365 of its Note in the amount of into 1,341,250 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On February 1, 2016, Vis Vires Group converted $2,745 of its Note in the amount of into 1,098,000 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On February 8, 2016, Vis Vires Group converted $4,695 of its Note in the amount of into 2,471,053 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On February 18, 2016, Vis Vires Group converted $4,695 of its Note in the amount of into 2,471,053 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On February 26, 2016, Vis Vires Group converted $5,435 of its Note in the amount of into 2,470,455 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On March 8, 2016, Vis Vires Group converted $11,075 of its Note in the amount of into 3,572,581 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On March 16, 2016, Vis Vires Group converted $3,990 of its Note in the amount of into 1,530,556 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On February 1, 2016, LG Capital converted $2,470 of its Note in the amount of into 562,340 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On February 12, 2016, LG Capital converted $2,500 of its Note in the amount of into 379,750 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On February 29, 2016, LG Capital converted $2,485 of its Note in the amount of into 718,628 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On March 7, 2016, LG Capital converted $3,183 of its Note in the amount of into 1,929,169 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On March 14, 2016, LG Capital converted $5,101 of its Note in the amount of into 2,081,987 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On March 29, 2016, LG Capital converted $5,214 of its Note in the amount of into 2,128,016 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On March 28, 2016, LG Capital converted $5,485 of its Note in the amount of into 2,238,746 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On March 31, 2016, LG Capital converted $5,277 of its Note in the amount of into 1,788,901 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On April 29, 2016, LG Capital converted $13,503 of its Note in the amount of into 4,154,756 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On May 9, 2016, LG Capital converted $13,026 of its Note in the amount of into 4,070,512 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On February 3, 2016, JMJ Financial converted $1,435 of its Note in the amount of into 1,025,000 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On February 10, 2016, JMJ Financial converted $1,728 of its Note in the amount of into 1,234,000 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On February 12, 2016, JMJ Financial converted $1,813 of its Note in the amount of into 1,295,000 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On February 16, 2016, JMJ Financial converted $2,447 of its Note in the amount of into 1,748,000 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On March 1, 2016, JMJ Financial converted $2,618 of its Note in the amount of into 1,870,000 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On March 7, 2016, JMJ Financial converted $2,912 of its Note in the amount of into 2,080,000 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On March 11, 2016, JMJ Financial converted $4,125 of its Note in the amount of into 2,500,000 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On March 17, 2016, JMJ Financial converted $7,105 of its Note in the amount of into 2,900,000 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. On March 23, 2016, JMJ Financial converted $6,928 of its Note in the amount of into 2,827,882 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. During the nine month period ended May 31, 2016, $203,204 of beneficial conversion features were recorded resulting from convertible debts issued during the same period. Please refer to Note 4 for further information regarding the discounts on the convertible debt transactions. As of May 31, 2016 the Company has not granted any stock options. Fiscal year ended August 31, 2015 On January 20, 2015, the Company authorized and issued 100,000 shares of Series A Preferred Stock to be granted to Hallmark Holdings Inc. (a related party) in exchange for services. The 100,000 shares grant the holder to have the right to vote on all shareholder matters equal to 500 votes per share. The Series A shares were valued according to the additional voting rights assigned. The value assigned to the voting rights was derived from a model utilizing control premiums to value the voting control of the preferred stock. The value assigned to the Series A shares was $499,000 and was recorded on the grant date as stock based compensation. On January 23, 2015, the Company filed a Certificate of Designation to establish the rights and benefits of Class A preferred stock. During 2015, the company issued 40,000 shares in exchange for $4,000 from a third party investor. On August 26, 2015, Tangers Investment Group LLC converted $10,000 of its Note in the amount of into 904,977 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. During 2015, Tangers Investment Group LLC converted $22,000 of its Note into a stock payable. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion. During the twelve months ended August 31, 2015, $683 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. As of May 31, 2015 the Company has not granted any stock options. |
DEBT TRANSACTIONS
DEBT TRANSACTIONS | 9 Months Ended |
May 31, 2016 | |
Debt Transactions | |
DEBT TRANSACTIONS | NOTE 4 DEBT TRANSACTIONS Convertible Notes Payable Related Party U.S. Affiliated On July 31, 2014, the Company issued a convertible note to Hallmark Venture Group inc. (a related party) for $18,003 of cash consideration. On September 31, 2014, Hallmark Venture Group Inc. sold the note to U S Affiliated Inc. (a related third party). The note bears interest at 6%, matures on July 31, 2015, and is convertible into common stock at 50% of the closing market price of the lowest 3 trading days during the previous 25 trading days prior to conversion. The Company recorded a debt discount equal to $18,003 due to this conversion feature. The note was amended during July 2015 to mature on February 29, 2016. During the period ended May 31, 2016, the note was sold to Tangiers and $13,572 of accrued interest was added to the note principal balance bringing the new principal balance up to $31,575. As there was an updated conversion feature on the new note, the discount of $31,575 was recorded with the offset to additional paid in capital. The debt discount was fully amoritzed during the three month period ended May 31, 2016 as a result of the conversions of the note by Tangiers. The note had accrued interest of $0 and $1,170 as of May 31, 2016 and August 31, 2015, respectively. The debt discount had a balance at May 31, 2016 and August 31, 2015 was $0 and $0, respectively. During the three months ended May 31, 2016 the holder of the note converted $31,575 of the note and interest to common stock with a remaining balance of $1,904 which the Company repaid in cash during the same period thus repaying the note in full. The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.0005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. On July 31, 2014, the Company issued a convertible note to Hallmark Venture Group Inc. (a related party) for $14,315 of cash consideration. . On September 31, 2014, Hallmark Venture Group Inc. sold the note to U S Affiliated Inc. (a related third party). The note bears interest at 6%, matures on July 31, 2015, and is convertible into common stock at 50% of the closing market price of the lowest 3 trading days during the previous 25 trading days prior to conversion. The Company recorded a debt discount equal to $14,315 due to this conversion feature. The note was amended during July 2015 to mature on February 29, 2016. During the period ended May 31, 2016, the note was sold to Tangiers and $10,799 of accrued interest was added to the note principal balance bringing the new principal balance up to $25,114. As there was an updated conversion feature on the new note, the discount of $25,114 was recorded with the offset to additional paid in capital. The debt discount was fully amoritzed during the three month period ended May 31, 2016 as a result of the conversions of the note by Tangiers. The note had accrued interest of $0 and $930 as of May 31, 2016 and August 31, 2015, respectively. The debt discount had a balance at May 31, 2016 and August 31, 2015 of $0 and $0, respectively. During the three months ended May 31, 2016 the holder of the note converted $25,114 of the note and interest to common stock thus repaying the note in full. The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.0005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. On May 12, 2016, the Company issued a convertible note to U.S. Affiliated, Inc. (a related party) for $7,500 of cash consideration. The note bears interest at 6%, matures on September 12, 2016, and is convertible into common stock at 50% of the average bid price of the stock during the 30 days prior to the conversion. The Company recorded a debt discount equal to $7,500 due to this conversion feature and amortized $1,159 during the three months ended May 31, 2016, with a remaining debt discount balance of $6,341 as of May 31, 2016. The note had accrued interest of $23 and $0 as of May 31, 2016 and August 31, 2015, respectively. The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.0005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. Convertible Notes Payable Third Party On July 2, 2015, the Company issued a convertible note to Vis Veres Group for $38,000 of cash consideration. The note bears interest at 8%, matures on April 7, 2016, and is convertible into common stock at 55% of the lowest 3 closing market prices of the previous 20 trading days prior to conversion. The Company recorded a debt discount equal to $35,000 due to this conversion feature. The Company also recorded a $3,000 debt discount due to accrued interest required by the agreement to be accrued at the beginning of the note. The note had accrued interest of $0 and $500 as of May 31, 2016 and August 31, 2015, respectively. During the nine months ended May 31, 2016, Vis Veres Group had converted the note into common shares within the terms of the agreement, therefore, there was no gain or loss recognized as a result of these conversions. The debt discounts had a balance at May 31, 2016 and August 31, 2015 of $0 and $29,857, respectively. The Company recorded debt discount amortization expense of $29,857 and $8,143 during the nine months ended May 31, 2016 and the year ended August 31, 2015, respectively. As the note has been fully converted, it is considered paid in full as of May 31, 2016. The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.00005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. On July 21, 2015, the Company issued a convertible note to JMJ Financial Group for $27,778 of cash consideration. The note bears interest at 12%, matures on July 21, 2016, and is convertible into common stock at 50% of the lowest 3 closing market prices of the previous 20 trading days prior to conversion. The Company recorded a debt discount equal to $22,500 due to this conversion feature. The Company also recorded a $5,278 debt discount due to accrued interest required by the agreement to be accrued at the beginning of the note. The note had accrued interest of $0 and $374 as of May 31, 2016 and August 31, 2015, respectively. During the nine months ended May 31, 2016, JMJ Financial had converted the note into common shares within the terms of the agreement, therefore, there was no gain or loss recognized as a result of these conversions. The debt discounts had a balance at May 31, 2016 and August 31, 2015 of $0 and $24,667, respectively. The Company recorded debt discount amortization expense of $24,667 and $3,111 during the nine months ended May 31, 2016 and the year ended August 31, 2015, respectively. As the note has been fully converted, it is considered paid in full as of May 31, 2016. The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.00005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. On July 15, 2015, the Company issued a convertible note to LG Capital Funding LLC for $26,500 of cash consideration. The note bears interest at 8%, matures on July 15, 2016, and is convertible into common stock at 50% of the lowest 3 closing market prices of the previous 20 trading days prior to conversion. The Company recorded a debt discount equal to $25,000 due to this conversion feature. The Company also recorded a $1,500 debt discount due to accrued interest required by the agreement to be accrued at the beginning of the note. The note had accrued interest of $0 and $273 as of May 31, 2016 and August 31, 2015, respectively. During the nine months ended May 31, 2016, LG Capital converted the note into common shares within the terms of the agreement, therefore, there was no gain or loss recognized as a result of these conversions. The debt discounts had a balance at May 31, 2016 and August 31, 2015 of $0 and $23,097, respectively. The Company recorded debt discount amortization expense of $23,097 and $3,403 during the nine months ended May 31, 2016 and the year ended August 31, 2015, respectively. As the note has been fully converted, it is considered paid in full as of May 31, 2016. The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.00005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. On April 10, 2016, the Company issued a convertible note to LG Capital Funding LLC for $26,500 of cash consideration. The note bears interest at 8%, matures on July 15, 2016, and is convertible into common stock at 50% of the lowest 3 closing market prices of the previous 20 trading days prior to conversion. The Company recorded a debt discount equal to $25,000 due to this conversion feature. The Company also recorded a $1,500 debt discount due to accrued interest required by the agreement to be accrued at the beginning of the note. The note had accrued interest of $0 and $0 as of May 31, 2016 and August 31, 2015, respectively. During the three months ended May 31, 2016, LG Capital converted the note into common shares within the terms of the agreement, therefore, there was no gain or loss recognized as a result of these conversions. The debt discounts had a balance at May 31, 2016 and August 31, 2015 of $0 and $0, respectively. The Company recorded debt discount amortization expense of $26,500 and $0 during the nine months ended May 31, 2016 and the year ended August 31, 2015, respectively. As the note has been fully converted, it is considered paid in full as of May 31, 2016. The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.00005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. On February 5, 2015, the Company issued a convertible note to Tangiers Capital Group for $55,000 of cash consideration. The note bears interest at 10%, matures on February 5, 2016, and is convertible into common stock at 50% of the lowest 3 closing market prices of the previous 20 trading days prior to conversion. The Company recorded a debt discount equal to $22,000 due to this conversion feature. The Company also recorded a $5,000 debt discount due to accrued interest required by the agreement to be accrued at the beginning of the note. The note had accrued interest of $0 and $3,119 as of May 31, 2016 and August 31, 2015, respectively. During the nine months ended May 31, 2016, Tangiers Capital had converted the note into common shares within the terms of the agreement, therefore, there was no gain or loss recognized as a result of these conversions. $22,000 of the conversion was recorded as subscription payable at August 31, 2015, and then the shares were subsequently issued during 2016. The debt discounts had a balance at May 31, 2016 and August 31, 2015 of $0 and $7,656, respectively. The Company recorded debt discount amortization expense of $7,656 and $19,344 during the nine months ended May 31, 2016 and the year ended August 31, 2015, respectively. As the note has been fully converted, it is considered paid in full as of May 31, 2016. The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.00005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. On November 25, 2015, the Company issued a convertible note to Tangiers Capital Group for $38,500 of cash consideration. The note bears interest at 12%, matures on November 25, 2016, and is convertible into common stock at 50% of the lowest 3 closing market prices of the previous 20 trading days prior to conversion. The Company recorded a debt discount equal to $35,000 due to this conversion feature. The Company also recorded a $3,500 debt discount due to accrued interest required by the agreement to be accrued at the beginning of the note. The note had accrued interest of $4,620 as of May 31, 2016. The debt discounts had a balance at May 31, 2016 and August 31, 2015 of $19,675 and $0, respectively. The Company recorded debt discount amortization expense of $18,825 and $0 during the nine months ended May 31, 2016 and the year ended August 31, 2015, respectively. The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.00005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. On April 15, 2016, the Company issued a convertible note to Tangiers Capital Group for $27,500 of cash consideration. The note bears interest at 10%, matures on April 15, 2017, and is convertible into common stock at 50% of the lowest 3 closing market prices of the previous 20 trading days prior to conversion. The Company recorded a debt discount equal to $25,000 due to this conversion feature. The Company also recorded a $2,500 debt discount due to accrued interest required by the agreement to be accrued at the beginning of the note. The note had accrued interest of $3,300 as of May 31, 2016. The debt discounts had a balance at May 31, 2016 and August 31, 2015 of $24,034 and $0, respectively. The Company recorded debt discount amortization expense of $3,466 and $0 during the nine months ended May 31, 2016 and the year ended August 31, 2015, respectively. The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.00005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. On May 6, 2016, the Company issued a convertible note to Tangiers Capital Group for $35,750 of cash consideration. The note bears interest at 10%, matures on May 6, 2017, and is convertible into common stock at 50% of the lowest 3 closing market prices of the previous 20 trading days prior to conversion. The Company recorded a debt discount equal to $32,500 due to this conversion feature. The Company also recorded a $3,250 debt discount due to accrued interest required by the agreement to be accrued at the beginning of the note. The note had accrued interest of $3,575 as of May 31, 2016. The debt discounts had a balance at May 31, 2016 and August 31, 2015 of $33,301 and $0, respectively. The Company recorded debt discount amortization expense of $2,449 and $0 during the nine months ended May 31, 2016 and the year ended August 31, 2015, respectively. The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.00005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. On December 2, 2015, the Company issued a convertible note to Robert Knudsen for $21,500 of accounts payable that was converted into this convertible note. The note bears interest at 12% and is due on demand, and is convertible into common stock at 45% of the lowest trading bid price during the 30 days prior to conversion. The Company recorded a debt discount equal to $21,500 due to this conversion feature. The note had accrued interest of $1,279 as of May 31, 2016. The debt discounts had a balance at May 31, 2016 and August 31, 2015 of $0 and $0, respectively. The Company recorded debt discount amortization expense of $21,500 and $0 during the nine months ended May 31, 2016 and the year ended August 31, 2015, respectively. The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.00005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
May 31, 2016 | |
Related Party Transactions | |
RELATED PARTY TRANSACTIONS | NOTE 5- RELATED PARTY TRANSACTIONS Convertible Notes Payable Related Party US Affiliated On July 31, 2014, the Company issued a convertible note to Hallmark Venture Group inc. (a related party) for $18,003 of cash consideration. On September 31, 2014, Hallmark Venture Group Inc. sold the note to U S Affiliated Inc. (a related third party). The note bears interest at 6%, matures on July 31, 2015, and is convertible into common stock at 50% of the closing market price of the lowest 3 trading days during the previous 25 trading days prior to conversion. The Company recorded a debt discount equal to $18,003 due to this conversion feature. The note was amended during July 2015 to mature on February 29, 2016. During the period ended May 31, 2016, the note was sold to Tangiers and $13,572 of accrued interest was added to the note principal balance bringing the new principal balance up to $31,575. As there was an updated conversion feature on the new note, the discount of $31,575 was recorded with the offset to additional paid in capital. The debt discount was fully amoritzed during the three month period ended May 31, 2016 as a result of the conversions of the note by Tangiers. The note had accrued interest of $0 and $1,170 as of May 31, 2016 and August 31, 2015, respectively. The debt discount had a balance at May 31, 2016 and August 31, 2015 was $0 and $0, respectively. During the three months ended May 31, 2016 the holder of the note converted $31,575 of the note and interest to common stock with a remaining balance of $1,904 which the Company repaid in cash during the same period thus repaying the note in full. The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.0005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. On July 31, 2014, the Company issued a convertible note to Hallmark Venture Group Inc. (a related party) for $14,315 of cash consideration. . On September 31, 2014, Hallmark Venture Group Inc. sold the note to U S Affiliated Inc. (a related third party). The note bears interest at 6%, matures on July 31, 2015, and is convertible into common stock at 50% of the closing market price of the lowest 3 trading days during the previous 25 trading days prior to conversion. The Company recorded a debt discount equal to $14,315 due to this conversion feature. The note was amended during July 2015 to mature on February 29, 2016. During the period ended May 31, 2016, the note was sold to Tangiers and $10,799 of accrued interest was added to the note principal balance bringing the new principal balance up to $25,114. As there was an updated conversion feature on the new note, the discount of $25,114 was recorded with the offset to additional paid in capital. The debt discount was fully amoritzed during the three month period ended May 31, 2016 as a result of the conversions of the note by Tangiers. The note had accrued interest of $0 and $930 as of May 31, 2016 and August 31, 2015, respectively. The debt discount had a balance at May 31, 2016 and August 31, 2015 of $0 and $0, respectively. During the three months ended May 31, 2016 the holder of the note converted $25,114 of the note and interest to common stock thus repaying the note in full. The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.0005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. On May 12, 2016, the Company issued a convertible note to U.S. Affiliated, Inc. (a related party) for $7,500 of cash consideration. The note bears interest at 6%, matures on September 12, 2016, and is convertible into common stock at 50% of the average bid price of the stock during the 30 days prior to the conversion. The Company recorded a debt discount equal to $7,500 due to this conversion feature and amortized $1,159 during the three months ended May 31, 2016, with a remaining debt discount balance of $6,341 as of May 31, 2016. The note had accrued interest of $23 and $0 as of May 31, 2016 and August 31, 2015, respectively. The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.0005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. 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 year ended August 31, 2015, the Company repaid net funds of $27,158. During the year ended August 31, 2015, the Company has imputed interest at a reasonable rate of 10 percent totaling $683. As of August 31, 2015 the loan was paid in full. Preferred Stock Issued for Services On January 20, 2015, the Company authorized and issued 100,000 shares of Series A Preferred Stock to be granted to Hallmark Holdings Inc. (a related party) in exchange for services. The 100,000 shares grant the holder to have the right to vote on all shareholder matters equal to 500 votes per share. The Series A shares were valued according to the additional voting rights assigned. The value assigned to the voting rights was derived from a model utilizing control premiums to value the voting control of the preferred stock. The value assigned to the Series A shares was $499,000 and was recorded on the grant date as stock based compensation. Lease Commitments On September 1, 2015, Service Team Inc leased an industrial building located on three acres of land at 1818 E. Rosslynn Avenue, Fullerton, California. The lease rate is $10,000 per month for the first six months; then $14,000 per month for the remaining six years of the lease. Service Team Inc is obligated to pay the fire insurance and property taxes on the building that are estimated to be $2,000 per month. 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. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
May 31, 2016 | |
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 $656,484 as of May 31, 2016, that will be offset against future taxable income. The available net operating loss carry forwards of approximately $656,484 will expire in various years through 2035. 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 May 31, 2016 and August 31, 2015: 5/31/16 8/31/15 Net tax loss carry-forwards $ 656,484 $ 617,079 Statutory rate 34 % 34 % Expected tax recovery 223,205 209,807 Change in valuation allowance (223,205 ) (209,807 ) Income tax provision $ $ Components of deferred tax asset: Non capital tax loss carry forwards $ 223,205 $ 209,807 Less: valuation allowance (223,205 ) (209,807 ) Net deferred tax asset $ $ |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
May 31, 2016 | |
Commitments And Contingencies | |
COMMITMENTS AND CONTINGENCIES | NOTE 7 COMMITMENTS AND CONTINGENCIES Litigation None. Operating Leases On September 1, 2015, Service Team Inc leased an industrial building located on three acres of land at 1818 E. Rosslynn Avenue, Fullerton, California. The lease rate is $10,000 per month for the first six months; then $14,000 per month for the remaining six years of the lease. Service Team Inc is obligated to pay the fire insurance and property taxes on the building that are estimated to be $2,000 per month. 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. Contingent Consideration During the period from November 29, 2011 until June 1, 2012, the Company sold 541,000 shares to various individuals for a total cash consideration of $54,100. The funds were used for operating capital of the Company including rent and payroll. Our rescission offer covers twenty-five shareholders (25) for a total of 541,000 shares originally sold for $54,100. During the three month period ended November 30, 2015, as the rescission offer expired, the $54,100 was reversed from the liability resulting in a gain in other income and expense of $54,100 as the Company is no longer required to return funds to investors. In addition, the Company has not been requested by any investor to repay funds from these stock sales during the period from November 29, 2011 through June 1, 2012. |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
May 31, 2016 | |
Segment Reporting | |
Segment Reporting Disclosure | NOTE 8 SEGMENT REPORTING Our operations during the nine month periods ending May 31, 2016 and May 31, 2015, were 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 The Trade Leasing segment is involved in the manufacture and repair of truck bodies. The Service Products segment specialized in electronics service, repair and sales. Summarized financial information concerning reportable segments is shown in the following table for the three months ended: May 31, 2016: Trade Leasing Service Products Total Revenues $ 2,647,289 $ $ 2,647,289 Cost of sales 2,152,438 2,152,438 Gross margin 494,851 494,851 Operating expenses 418,090 79,452 497,542 Profit (loss) from operations 76,761 (79,452 ) (2,691 ) Other expense (210,479 ) (210,479 ) Net income (loss) $ 76,761 $ (289,931 ) $ (213,170 ) May 31, 2015: Trade Leasing Service Products Total Revenues $ 1,830,475 $ $ 1,830,475 Cost of sales 1,486,905 1,486,905 Gross margin 343,570 343,570 Operating expenses 271,735 517,914 789,649 Operating loss 71,835 (517,914 ) (446,079 ) Other expenses (466 ) (17,590 ) (18,056 ) Net income (loss) $ 71,369 $ (535,504 ) $ (464,135 ) |
CONVERTIBLE NOTE RECEIVABLE
CONVERTIBLE NOTE RECEIVABLE | 9 Months Ended |
May 31, 2016 | |
Notes to Financial Statements | |
CONVERTIBLE NOTE RECEIVABLE | NOTE 9 CONVERTIBLE NOTE RECEIVABLE Convertible Note Receivable - Unrelated Parties On April 18, 2016, the Company made a $25,000 loan to an unrelated party. The loan is for a term of six months in duration and bears interest at a rate of 6% per year. In addition, the loan is convertible into Hallmark Venture stock at a rate of 50% of the average trading price in the past 30 days. The loan is accounted as an investment activity in the statement of cash flows and as part of current assets as it has a maturity of less than one year. As of May 31, 2016, the note balance was $25,000. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
May 31, 2016 | |
Subsequent Events | |
SUBSEQUENT EVENTS | NOTE 10 SUBSEQUENT EVENTS There were no subsequent events through the date that the financial statements were issued. |
SUMMARY OF SIGNIFICANT ACCOUN17
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
May 31, 2016 | |
Summary Of Significant 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 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 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. The Company has an accumulated deficit as of May 31, 2016 of $1,960,511. and is dependent on raising capital through placement of our common stock in order to implement its business plan. There can be no assurance that the Company will be successful in order to continue as a going concern. The Company is funding its initial operations by issuing common shares and debt. 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 May 31, 2016, or August 31, 2015. |
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. |
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 |
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 May 31, 2016 or August 31, 2015. |
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 15 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 $4,373 and $1,491 of depreciation expense during the nine months ended May 31, 2016 and 2015, respectively. Net property and equipment were as follows at May 31, 2016 and August 31, 2015: 5/31/16 8/31/15 Equipment $ 243,444 $ 243,444 Vehicles 15,000 15,000 Furniture 1,500 1,500 Leasehold improvements 52,827 Subtotal 312,771 259,944 Less: accumulated depreciation (256,665 ) (251,967 ) Total Fixed Assets, Net $ 56,106 $ 7,977 |
Lease Commitments | Lease Commitments Service Team Inc., effective September 1, 2015, leased new facilities at 1818 Rosslynn Avenue, Fullerton, California, to manufacture its products. The Company has moved from 10633 Ruchti Road, South Gate, California, effective October 1, 2015. The new facility is leased for six and one half years at a price of $10,000 per month, for the first six months; and, $14,000 per month thereafter. Service Team Inc pays for the fire insurance and property taxes on the building estimated to be approximately $2,000 per month. The location consists of three acres of land and one building of approximately 30,000 square feet. The facility is approximately one-third larger than the prior facility in South Gate. 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. |
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, convertible 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 and liabilities that were measured and recognized at fair value as of May 31, 2016 on a recurring basis: Total Realized Description Level 1 Level 2 Level 3 Loss $ - $ - $ - $ - Total $ - $ - $ - $ - The following table presents assets and liabilities that were measured and recognized at fair value as of August 31, 2015 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 May 31, 2016 and August 31, 2015 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 shut down in fiscal 2013 repaired or replaced electrical appliances (mostly televisions), covered by warranties or insurance companies. The Company had 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 was prepared itemizing the parts used and fixed labor rate costs billed by the Company. The invoice was entered into our accounting system and recognized as revenue at that time. Our invoice was paid by the warranty insurance companies. We did 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 recognized 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 . |
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. During the three and nine month periods ended May 31, 2016 and May 31, 2015, because the Company operations resulted in net losses, no additional dilutive securities were included in the Diluted EPS as that would be anti-dilutive to the resulting diluted earnings 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. |
SUMMARY OF SIGNIFICANT ACCOUN18
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
May 31, 2016 | |
Summary Of Significant Accounting Policies Tables | |
Schedule of Property and Equipment | 5/31/16 8/31/15 Equipment $ 243,444 $ 243,444 Vehicles 15,000 15,000 Furniture 1,500 1,500 Leasehold improvements 52,827 Subtotal 312,771 259,944 Less: accumulated depreciation (256,665 ) (251,967 ) Total Fixed Assets, Net $ 56,106 $ 7,977 |
Schedule of Fair Value of Assets and Liabilities measured and recognized on a recurring basis | The following table presents assets and liabilities that were measured and recognized at fair value as of May 31, 2016 on a recurring basis: Total Realized Description Level 1 Level 2 Level 3 Loss $ - $ - $ - $ - Total $ - $ - $ - $ - The following table presents assets and liabilities that were measured and recognized at fair value as of August 31, 2015 on a recurring basis: Total Realized Description Level 1 Level 2 Level 3 Loss $ - $ - $ - $ - Total $ - $ - $ - $ - |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
May 31, 2016 | |
Income Taxes Tables | |
Schedule of Income Tax Expenses | 5/31/16 8/31/15 Net tax loss carry-forwards $ 656,484 $ 617,079 Statutory rate 34 % 34 % Expected tax recovery 223,205 209,807 Change in valuation allowance (223,205 ) (209,807 ) Income tax provision $ $ Components of deferred tax asset: Non capital tax loss carry forwards $ 223,205 $ 209,807 Less: valuation allowance (223,205 ) (209,807 ) Net deferred tax asset $ $ |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
May 31, 2016 | |
Segment Reporting Tables | |
Schedule of Reportable Segments | May 31, 2016: Trade Leasing Service Products Total Revenues $ 2,647,289 $ $ 2,647,289 Cost of sales 2,152,438 2,152,438 Gross margin 494,851 494,851 Operating expenses 418,090 79,452 497,542 Profit (loss) from operations 76,761 (79,452 ) (2,691 ) Other expense (210,479 ) (210,479 ) Net income (loss) $ 76,761 $ (289,931 ) $ (213,170 ) May 31, 2015: Trade Leasing Service Products Total Revenues $ 1,830,475 $ $ 1,830,475 Cost of sales 1,486,905 1,486,905 Gross margin 343,570 343,570 Operating expenses 271,735 517,914 789,649 Operating loss 71,835 (517,914 ) (446,079 ) Other expenses (466 ) (17,590 ) (18,056 ) Net income (loss) $ 71,369 $ (535,504 ) $ (464,135 ) |
SUMMARY OF SIGNIFICANT ACCOUN21
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
May 31, 2016 | May 31, 2015 | May 31, 2016 | May 31, 2015 | Aug. 31, 2015 | |
Property and Equipment | $ 312,771 | $ 312,771 | $ 259,944 | ||
Less: accumulated depreciation | (256,665) | (256,665) | (251,967) | ||
Total fixed assets, net | 56,106 | 56,106 | 7,977 | ||
Depreciation Expense | 1,331 | $ 1,491 | 4,373 | $ 1,491 | |
Equipment [Member] | |||||
Property and Equipment | 243,444 | 243,444 | 243,444 | ||
Vehicles [Member] | |||||
Property and Equipment | 15,000 | 15,000 | 15,000 | ||
Furniture [Member] | |||||
Property and Equipment | 1,500 | 1,500 | 1,500 | ||
Leasehold Improvements [Member] | |||||
Property and Equipment | $ 52,827 | $ 52,827 |
SUMMARY OF SIGNIFICANT ACCOUN22
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - Fair Value, Measurements, Recurring [Member] - USD ($) | May 31, 2016 | Aug. 31, 2015 |
Fair vale of Assets and Liabilities | ||
Level 1 [Member] | ||
Fair vale of Assets and Liabilities | ||
Fair Value, Inputs, Level 2 [Member] | ||
Fair vale of Assets and Liabilities | ||
Fair Value, Inputs, Level 3 [Member] | ||
Fair vale of Assets and Liabilities |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 9 Months Ended | ||
May 31, 2016 | May 31, 2015 | Aug. 31, 2015 | |
Income Taxes Details | |||
Net tax loss carry-forwards | $ 656,484 | $ 617,079 | |
Statutory rate | 34.00% | 34.00% | |
Expected tax recovery | $ 223,205 | $ 209,807 | |
Change in valuation allowance | (223,205) | (209,807) | |
Income tax provision |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) | May 31, 2016 | Aug. 31, 2015 |
Income Taxes Details 2 | ||
Non capital tax loss carry forwards | $ 223,205 | $ 209,807 |
Less: valuation allowance | (223,205) | (209,807) |
Net deferred tax asset |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2016 | May 31, 2015 | Aug. 31, 2015 | |
Revenues | $ 940,796 | $ 664,454 | $ 2,647,289 | $ 1,830,475 | |
Cost of sales | 735,369 | 415,199 | 2,152,438 | 1,486,905 | |
Gross Margin | 205,427 | 249,255 | 494,851 | 343,570 | |
OPERATING INCOME (LOSS) | 43,408 | 127,766 | (2,691) | (446,079) | |
TOTAL OTHER INCOME (EXPENSE) | 187,287 | 13,898 | 210,479 | 18,056 | |
NET INCOME (LOSS) | $ (143,879) | $ 113,868 | (213,170) | (464,135) | $ (637,564) |
Trade Leasing | |||||
Revenues | 2,647,289 | 1,830,475 | |||
Cost of sales | 2,152,438 | 1,486,905 | |||
Gross Margin | 494,851 | 343,570 | |||
Total Operating Expenses | 418,090 | 271,735 | |||
OPERATING INCOME (LOSS) | 76,761 | 71,835 | |||
TOTAL OTHER INCOME (EXPENSE) | (466) | ||||
NET INCOME (LOSS) | 76,761 | 71,369 | |||
Service Products | |||||
Revenues | |||||
Cost of sales | |||||
Gross Margin | |||||
Total Operating Expenses | 79,452 | 517,914 | |||
OPERATING INCOME (LOSS) | (79,452) | (517,914) | |||
TOTAL OTHER INCOME (EXPENSE) | (210,479) | (17,590) | |||
NET INCOME (LOSS) | (289,931) | (535,504) | |||
Segment Total | |||||
Revenues | 2,647,289 | 1,830,475 | |||
Cost of sales | 2,152,438 | 1,486,905 | |||
Gross Margin | 494,851 | 343,570 | |||
Total Operating Expenses | 497,542 | 789,649 | |||
OPERATING INCOME (LOSS) | (2,691) | (446,079) | |||
TOTAL OTHER INCOME (EXPENSE) | (210,479) | (18,056) | |||
NET INCOME (LOSS) | $ (213,170) | $ (464,135) |