Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Nov. 30, 2019 | Jan. 14, 2020 | |
Document and Entity Information | ||
Entity Registrant Name | Service Team Inc. | |
Document Type | 10-Q | |
Document Period End Date | Nov. 30, 2019 | |
Amendment Flag | false | |
Entity Central Index Key | 0001535635 | |
Current Fiscal Year End Date | --08-31 | |
Entity Common Stock, Shares Outstanding | 8,852,873,544 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | WY | |
Entity File Number | 333-178210 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED BALANCE SHEETS (UN
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) | Nov. 30, 2019 | Aug. 31, 2019 |
ASSETS | ||
Cash | $ 23,153 | $ 52,636 |
Accounts receivable, net | 376,285 | 344,266 |
Total Current Assets | 399,438 | 396,902 |
Property and equipment, net | 155,434 | 157,736 |
Prepaid expenses - non-current | 14,000 | 14,000 |
TOTAL ASSETS | 568,872 | 568,638 |
LIABILITIES & SHAREHOLDERS' EQUITY | ||
Accounts payable | 109,162 | 82,564 |
Loan - employee | 1,300 | 1,300 |
Convertible note payable, net - currently in default | 136,632 | 140,232 |
Promissory note payable, net | 0 | 10,120 |
Accrued expenses | 62,652 | 63,521 |
Accrued interest | 90,256 | 84,866 |
TOTAL LIABILITIES | 400,002 | 382,603 |
SHAREHOLDERS' EQUITY | ||
Common stock, $0.001 par value, 20,000,000,000 authorized, and 8,852,873,544 issued and outstanding as of November 30, 2019 and 8,852,873,544 issued and outstanding as of August 31, 2019 respectively. | 8,852,874 | 8,852,874 |
Preferred stock - Series A, $0.001 par value, 150,000 authorized, 150,000 and 150,000 issued and outstanding as of November 30, 2019 and August 31, 2019, respectively. | 150 | 150 |
Additional paid in capital | (5,611,302) | (5,611,302) |
Stock payable | 0 | 0 |
Accumulated deficit | (3,072,852) | (3,055,687) |
TOTAL SHAREHOLDERS' EQUITY | 168,870 | 186,035 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 568,872 | $ 568,638 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | Nov. 30, 2019 | Aug. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock series A, par or stated value | $ 0.001 | $ 0.001 |
Preferred stock series A, shares authorized | 150,000 | 150,000 |
Preferred stock series A, shares issued | 150,000 | 150,000 |
Preferred stock series A, shares oustanding | 150,000 | 150,000 |
Common Stock, par or stated value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 20,000,000,000 | 20,000,000,000 |
Common Stock, shares issued | 8,852,873,544 | 8,852,873,544 |
Common Stock, shares outstanding | 8,852,873,544 | 8,852,873,544 |
CONSOLIDATED STATEMENT OF OPERA
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | |
Nov. 30, 2019 | Nov. 30, 2018 | |
REVENUES | ||
Sales | $ 994,625 | $ 993,889 |
COST OF SALES | ||
Cost of sales | 824,002 | 717,017 |
Gross Margin | 170,623 | 276,872 |
OPERATING EXPENSES | ||
General & administrative expenses | 174,689 | 126,460 |
Depreciation expense | 4,017 | 4,206 |
Total Operating Expenses | 178,706 | 130,666 |
INCOME FROM OPERATIONS | (8,083) | 146,206 |
OTHER EXPENSE | ||
Interest Expense | (9,082) | 32,680 |
Total Other Expense | (9,082) | 32,680 |
NET INCOME (LOSS) | $ (17,165) | $ 113,526 |
Weighted average number of common shares outstanding - basic | 8,852,873,544 | 8,852,873,544 |
Weighted average number of common shares outstanding - diluted | 8,852,873,544 | 11,515,613,544 |
Net earnings (loss) per common share - basic | $ 0 | $ 0 |
Net earnings (loss) per common share - diluted | $ 0 | $ 0 |
CONSOLIDATED STATEMENT OF SHARE
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY DEFICIT (UNAUDITED) - USD ($) | Common Stock | Preferred Stock | Additional Paid-In Capital | Stock Payable | Accumulated Deficit | Total |
Beginning Balance at Aug. 31, 2018 | $ 8,852,874 | $ 150 | $ (5,611,302) | $ (3,056,563) | $ 185,159 | |
Beginning Balance (in shares) at Aug. 31, 2018 | 8,852,873,544 | 150,000 | ||||
Net Income (loss) | 876 | 876 | ||||
Ending Balance at Aug. 31, 2019 | $ 8,852,874 | $ 150 | (5,611,302) | (3,055,687) | 186,035 | |
Ending Balance (in shares) at Aug. 31, 2019 | 8,852,873,544 | 150,000 | ||||
Stock Payable for Note Conversion | ||||||
Net Income (loss) | (17,165) | (17,165) | ||||
Ending Balance at Nov. 30, 2019 | $ 8,852,874 | $ 150 | $ (5,611,302) | $ (3,072,852) | $ 168,870 | |
Ending Balance (in shares) at Nov. 30, 2019 | 8,852,873,544 | 150,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 3 Months Ended | |
Nov. 30, 2019 | Nov. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Income (Loss) | $ (17,165) | $ 113,526 |
Adjustments to reconcile net income (loss) with cash provided by (used in) operations: | ||
Debt discount amortization | 3,279 | 19,881 |
Depreciation | 4,017 | 4,206 |
CHANGE IN OPERATING ASSETS AND LIABILITIES | ||
Accounts receivable | (32,019) | (28,815) |
Accrued expenses | 4,521 | 5,760 |
Accounts payable | 26,598 | 17,805 |
Net Cash Provided by (Used in) Operating Activities | (10,769) | 132,363 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Cash paid for purchase of fixed assets | (1,715) | 0 |
Net Cash Used in Investing Activities | (1,715) | 0 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from convertible debt - third party | 0 | 0 |
Payments on promissory notes - third party | (16,999) | (39,656) |
Net Cash Provided By (Used In) Financing Activities | (16,999) | (39,656) |
Net Increase (Decrease) In Cash and Cash Equivalents | (29,483) | 92,707 |
Cash at Beginning of Period | 52,636 | 48,855 |
Cash at End of Period | 23,153 | 141,562 |
Supplemental Disclosures | ||
Interest Paid | 413 | 0 |
Taxes Paid | $ 0 | $ 0 |
ORGANIZATION
ORGANIZATION | 3 Months Ended |
Nov. 30, 2019 | |
Health Care Organizations [Abstract] | |
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. On September l, 2018, Service Team Inc. changed its state of domicile from the state of Nevada to the state of Wyoming. The Company has established a fiscal year end of August 31. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Nov. 30, 2019 | |
Accounting Policies [Abstract] | |
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' Equity 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 November 30, 2019 of $3,072,852 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 November 30, 2019, or August 31, 2019. 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. Whilst management is confident that its customers will settle their debts, it has recorded an allowance for doubtful accounts in amount of $14,310 as of November 30, 2019 and August 31, 2019 Accounts Receivable and Revenue Concentrations The company has approximately 400 customers. One customer South Bay Ford represented more than 10% of sale in the last 12 months. The company is not dependent on a few major customers. Inventory The Company does not own inventory, materials are purchased as needed from local suppliers; therefore, there was no additional inventory on hand at November 30, 2019 or August 31, 2019. 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 $4,017 and $4,206 of depreciation expense during the three months ended November 30, 2019 and 2018, respectively. Net property and equipment were as follows at November 30, 2019 and August 31, 2019: 11-30-19 8-31-19 Equipment $ 369,673 $ 367,958 Vehicles 15,000 15,000 Furniture 24,000 24,000 Leasehold improvements 52,826 52,826 Subtotal 461,499 459,784 Less: accumulated depreciation 306,065 (302,048 ) Total Fixed Assets, Net $ 155,434 $ 157,736 Lease Commitments Service Team Inc. leases facilities at 1818 Rosslynn Avenue, Fullerton, California, to manufacture its products. The 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. As of November 30, 2019, the deferred rent related to this lease was $7,333 and is included in accrued expenses. The table below discloses the Company’s future minimum lease payment obligations as of November 30, 2019. 2020 $ 126,000 2021 168,000 2022 14,000 TOTAL: $ 308,000 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. Description Level 1 Level 2 Level 3 Total Convertible Note Payable-net $ 0 $ — $ — $ — Convertible Note Payable-net, in default 136,632 — — — Total $ 136,632 — — — The following table presents assets and liabilities that were measured and recognized at fair value as of August 31, 2019 on a recurring basis: Description Level 1 Level 2 Level 3 Total Convertible Note Payable-net $ 140,232 $ — $ — $ — Total $ 140,232 — — — Income Taxes In assessing the realization of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on the level of historical operating results and the uncertainty of the economic conditions, the Company has recorded a full valuation allowance against its deferred tax assets at November 30, 2019 and August 31, 2019 where it cannot conclude that it is more likely than not that those assets will be realized. Revenue Recognition Trade Leasing Inc dba Delta Stag Manufacturing Service Team Inc, 100% owned subsidiary Trade Leasing Inc dba Delta Stag Manufacturing 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 dba Delta Stag Manufacturing 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 Trade Leasing Inc 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. On September 1, 2018, we adopted Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification (ASC) Topic 605, Revenue Recognition (Topic 605). Results for reporting periods beginning after September 1, 2018 are presented under Topic 606. The impact of adopting the new revenue standard was not material to our financial statements and there was no adjustment to beginning retained earnings on September 1, 2018. Under Topic 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We determine revenue recognition through the following steps: ● identification of the contract, or contracts, with a customer; ● identification of the performance obligations in the contract; ● determination of the transaction price; ● allocation of the transaction price to the performance obligations in the contract; and ● recognition of revenue when, or as, we satisfy a performance obligation. 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 month period ended November 30, 2018, because the Company operations resulted in net income, therefore additional dilutive securities were included in the diluted EPS. During the three month period ended November 30, 2019, there were net losses; therefore, 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 February 2016, the FASB (Topic In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), to clarify the principles of recognizing revenue and create common revenue recognition guidance between U.S. GAAP and International Financial Reporting Standards. Under ASU 2014-09, revenue is recognized when a customer obtains control of promised goods or services and is recognized at an amount that reflects the consideration expected to be received in exchange for such goods or services. In addition, ASU 2014-09 requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The ASU is effective for fiscal years beginning after December 15, 2017. The new revenue standard is principle based and interpretation of those principles may vary from company to company based on their unique circumstances. It is possible that interpretation, industry practice, and guidance may evolve as companies and the accounting profession work to implement this new standard. The implementation of this standard did not have a material effect on the Company’s results of operations. In January 2017, the FASB Simplifying the Test In August 2016, the Financial Accounting Standards Board (the “FASB”) Statement of Cash Flows (Topic In May 2017, the FASB issued ASU No. 2017-09, Stock Compensation - Scope of Modification Accounting Effective June 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) 606 — Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the commercial sales of products, licensing agreements and contracts to perform pilot studies by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied. For the comparative periods, revenue has not been adjusted and continues to be reported under ASC 605 — Revenue Recognition. Under ASC 605, revenue is recognized when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) the performance of service has been rendered to a customer or delivery has occurred; (3) the amount of fee to be paid by a customer is fixed and determinable; and (4) the collectability of the fee is reasonably assured. There was no impact on the Company’s financial statements as a result of adopting ASC 606. There are various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s consolidated financial position, results of operations or cash flows. |
CAPITAL STOCK
CAPITAL STOCK | 3 Months Ended |
Nov. 30, 2019 | |
Capital Stock | |
CAPITAL STOCK | NOTE 3 – CAPITAL STOCK The Company's authorized capital is 20,000,000,000 common shares with a par value of $0.001 per share and 150,000 preferred shares with a par value of $0.001 per share. Common Shares On February 12, 2016, the Articles of Incorporation were amended to increase the authorized shares of capital stock to 500,000,000. On December 20, 2016, the Articles of Incorporation were amended to increase the authorized share of capital stock to 1,000,000,000. On January 19, 2017, the Articles of Incorporation were amended to increase the authorized share of capital stock to 2,000,000,000. On February 16, 2017, the Articles of Incorporation were amended to increase the authorized share of capital stock to 3,000,000,000. On April 27, 2017, the Articles of Incorporation were amended to increase the authorized share of capital stock to 4,500,000,000. On June 13, 2017, the Articles of Incorporation were amended to increase the authorized share of capital stock to 8,000,000,000. On June 28, 2017, the Articles of Incorporation were amended to increase the authorized share of capital stock to 10,000,000,000. On August 22, 2017, the Company moved its state of domicile from Nevada to Wyoming, and in the process of the transfer increased its authorized common stock to 20,000,000,000. Preferred Shares On January 23, 2015, Service Team Inc. filed with the Secretary of State of Nevada a Certificate of Designation for 100,000 shares of Series A Preferred Stock. The Designation gives the Series A Preferred Stock 500 votes per share. Series A Preferred Stock were not entitled to receive dividends, any liquidation preference, or conversion rights. On October 16, 2015, the Designation of Preferred Stock was amended to allow Preferred Shareholders to receive dividends in an amount equal to dividends paid per share on Common Stock. On July 27, 2016, an amendment was filed to increase the voting rights of the preferred stock from 500 votes per share to 10,000 votes per share. The Series A share amendments valued according to the additional voting rights and dividend rights assigned. The value assigned to the dividend rights was derived from a model utilizing future economic value of the dividends and was $525 which was recorded on the grant date as stock based compensation. The value assigned to the voting rights was derived from a model utilizing control premiums to value the voting control of the preferred stock and was $83,000 which was recorded on the grant date as stock based compensation. On December 30, 2016 the Articles of Incorporation were amended to increase the authorized preferred shares to 150,000. On July 25, 2017, the Articles of Incorporation were amended to increase the voting rights of preferred shares to 100,000 votes per share. The Series A share amendments valued according to the additional voting rights and dividend rights assigned. The value assigned to the dividend rights was derived from a model utilizing future economic value of the dividends and was $0 which was recorded on the grant date as stock based compensation. The value assigned to the voting rights was derived from a model utilizing control premiums to value the voting control of the preferred stock and was $54,000 which was recorded on the grant date as stock based compensation. On December 4, 2017, the Company granted 50,000 additional Series A Preferred Stock shares to Robert Cashman, a related party. The value assigned to the new shares was derived from a model utilizing control premiums to value the voting control of the preferred stock and was $1,000 which was recorded on the grant date as stock based compensation. Share Transactions 2020 There were no share transactions in 2020 2019 There were no share transactions in 2019 Stock Based Compensation We have accounted for stock-based compensation under the provisions of FASB Accounting Standards codification (ASC) 718-10-55. (Prior authoritative literature: FASB Statement 123 (R), Share-based payment.) This statement requires us to record any expense associated with the fair value of stock-based compensation. Determining fair value requires input of highly subjective assumptions, including the expected price volatility. Changes in these assumptions can materially affect the fair value estimate. As of November 30, 2019, the company has not granted any stock options. |
DEBT TRANSACTIONS
DEBT TRANSACTIONS | 3 Months Ended |
Nov. 30, 2019 | |
Debt Disclosure [Abstract] | |
DEBT TRANSACTIONS | NOTE 4 – DEBT TRANSACTIONS Convertible Notes Payable – Related Party R.L. Cashman On April 17, 2017, the Company issued a convertible note to Robert Cashman (a related party) for $12,500 of cash consideration. The note bears interest at 10%, matures on April 17, 2018, 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 $12,500 due to this conversion feature and amortized $4,658 during the year ended August 31, 2017, with a remaining debt discount of $7,842 amortized during the year ended August 31, 2018. The note was repaid during the fiscal year ended August 31, 2018. 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 JMJ Financial Group On April 28, 2017, the Company issued a convertible note to JMJ Financial Group for $55,000 of cash consideration. The note bears interest at 12%, matures on April 28, 2018, 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 $37,080 due to this conversion feature. The Company also recorded a $6,000 and $11,920 debt discounts due to accrued interest and origination fees required by the agreement to be accrued at the beginning of the note. The note had accrued interest of $7,222 as of November 30, 2019 and August 31, 2019 respectively. The debt discounts had a balance at November 30, 2019 and August 31, 2019 of $0. The Company recorded debt discount amortization expense of $0 during the three months ended November 30, 2019 and during the year ended August 31, 2019. The Company converted $31,570 of principal and $12,222 of interest into shares during the year ended August 31, 2018. This note is currently in default. 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. Tangiers Capital Group On November 10, 2017, Service Team Inc issued a 12% Convertible Promissory Note payable to Tangiers Investment Group LLC (the "Investor") in the principal amount of $23,000. The Note, which is due on November 10, 2018, was funded by the Investor in the sum of $20,000 and $3,000 was retained by the Investor through an original issue discount or "OID" for due diligence and legal expense related to this transaction. The Note is convertible into shares of the Registrant's common stock, par value $0.001, at a conversion price of 50% of the lowest trading price of the Company's common stock during the 25 consecutive trading days prior to the date on which Holder elects to convert all or part of the Note. The Company recorded a $20,000 discount due to the beneficial conversion feature. During the year ended August 31, 2019, $18,526 of discount amortization was recorded, to result in a remaining debt discount balance of $0 as of August 31, 2019. Accrued interest at August 31, 2019 and November 30, 2019 was $11,186 and $11,703, respectively. This note is currently in default. 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 27, 2018, Service Team Inc issued a 12% Convertible Promissory Note payable to Tangiers Investment Group LLC (the "Investor") in the principal amount of $23,000. The Note, which is due on February 27, 2019, was funded by the Investor in the sum of $20,000 and $3,000 was retained by the Investor through an original issue discount or "OID" for due diligence and legal expense related to this transaction. The Note is convertible into shares of the Registrant's common stock, par value $0.001, at a conversion price of 50% of the lowest trading price of the Company's common stock during the 25 consecutive trading days prior to the date on which Holder elects to convert all or part of the Note. The Company recorded a $20,000 discount due to the beneficial conversion feature and a $3,000 discount due to the original issue discount. During the year ended August 31, 2019, the Company amortized $11,342 of the debt discount leaving a remaining balance of $0 as of August 31, 2019. Accrued interest at August 31, 2019 and November 30, 2019 was $19,237 and $20,502, 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. Iconic Holdings LLC On July 10, 2017, the Company issued a convertible note to Iconic Holdings of $34,993 for consideration of certain machine tools. The note bears interest at 10%, matures on July 10, 2018, 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 $31,812 due to this conversion feature. The Company also recorded a $3,181 debt discount due to issuance fees. The note had accrued interest of $39,221 as of November 30, 2019 and $37,471 as of August 31, 2019. The debt discounts had a balance of $0 as of August 31, 2019. This note is currently in default. 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. Crown Bridge Partners, LLC. On June 12, 2017, the Company issued a convertible note to Crown Bridge Partners, LLC. for $63,750 of cash consideration. The note bears interest at 6%, matures on June 12, 2018, 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 $52,600 due to this conversion feature. The Company also recorded a $11,150 debt discount due to issuance fees. The note had accrued interest of $2,180 as of November 30, 2019 and $1,817 as of August 31, 2019. The debt discounts had a balance at August 31, 2019 of $0. This note is currently in default. 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. Crossover Capital Fund, LLC On July 24, 2017, the Company issued a convertible note to Crossover Capital Fund, LLC for $40,000 of cash consideration. The note bears interest at 10%, matures on July 24, 2018, 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 $40,000 due to this conversion feature. The note had accrued interest of $9,428 as of November 30, 2019 and $7,917 at August 31, 2019. The debt discounts had a balance of $0 at August 31, 2018. This note is currently in default. 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. Promissory Notes Payable – Third Party IOU Financial On March 30, 2018, the Company issued a promissory note to IOU Financial for $120,000 of cash consideration. The note bears interest at 32% and matures on March 30, 2019. The Company recorded a debt discount equal to $38,630 due to the unpaid interest which was added to the principal balance to be repaid during the 12 month note. During the year ended August 31, 2018, the company amortized $16,299 of the debt discount into interest expense leaving a remaining total debt discount on the note of $22,331 as of August 31, 2018. During the year ended August 31, 2018, the Company repaid $69,206 in principal on the note in cash leaving a balance on the note of $73,200 owed as of August 31, 2018. During the year ended August 31, 2019, the company amortized $22,331 of the debt discount into interest expense leaving a remaining total debt discount on the note of $0 as of August 31, 2019. During the year ended August 31, 2019, the Company repaid $89,424 in principal on the note in cash leaving a balance on the note of $0 owed as of August 31, 2019. On January 22, 2019, the Company issued a promissory note to IOU Financial for $75,000 of cash consideration. The note bears interest at 32%, matures on October 23, 2019. The Company recorded a debt discount equal to $16,954 due to the unpaid interest which was added to the principal balance to be repaid during the 9 month note. During the year ended August 31, 2018, the company amortized $35,836 of the debt discount into interest expense leaving a remaining total debt discount on the note of $0 as of August 31, 2018. The proceeds of the loan were used to pay $27,244 to IOU Financial to pay the note dated March 30, 2018 in full. And the remaining amount $47,776 was added to working capital. During the period ended August 31, 2019, the Company repaid $74,400 in principal on the note in cash leaving a balance on the note of $16,999 owed as of August 31, 2019. The note had interest of $7,917 as of August 31, 2019. This note was paid in full on December 12, 2019. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Nov. 30, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 5- RELATED PARTY TRANSACTIONS Preferred Stock Issued for Services On July 25, 2017, the Articles of Incorporation were amended to increase the voting rights of preferred shares to 100,000 votes per share. The Series A share amendments valued according to the additional voting rights and dividend rights assigned. The value assigned to the dividend rights was derived from a model utilizing future economic value of the dividends and was $0 which was recorded on the grant date as stock-based compensation. The value assigned to the voting rights was derived from a model utilizing control premiums to value the voting control of the preferred stock and was $54,000 which was recorded on the grant date as stock-based compensation. On December 4, 2017, the Company granted 50,000 additional Series A Preferred Stock shares to Robert Cashman, a related party. The value assigned to the new shares was derived from a model utilizing control premiums to value the voting control of the preferred stock and was $1,000 which was recorded on the grant date as stock-based compensation. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Nov. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
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 $858,102 as of November 30, 2019, that will be offset against future taxable income. The available net operating loss carry forwards 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 November 30, 2019 and August 31, 2019: 11/30/19 8/31/19 Net tax loss carry-forwards $ 858,102 $ 844,216 Statutory rate 21 % 21 % Expected tax recovery 180,201 177,285 Change in valuation allowance $ (180,201 ) $ (177,285 ) Income tax provision — — Components of deferred tax asset: Non capital tax loss carry forwards 180,201 177,285 Less: valuation allowance $ (180,201 ) $ (177,285 Net deferred tax asset — — |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Nov. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 7 – COMMITMENTS AND CONTINGENCIES Litigation None. Operating Leases |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Nov. 30, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 8 – SUBSEQUENT EVENTS Management has evaluated subsequent events to the requirements of ASC 855, and there are currently no subsequent events to report. On January 22, 2020 the company filed a Form 15 with the Securities and Exchange Commission. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Nov. 30, 2019 | |
Accounting Policies [Abstract] | |
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' Equity 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 November 30, 2019 of $3,072,852 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 November 30, 2019, or August 31, 2019. |
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. Whilst management is confident that its customers will settle their debts, it has recorded an allowance for doubtful accounts in amount of $14,310 as of November 30, 2019 and August 31, 2019 |
Accounts Receivable and Revenue Concentrations | Accounts Receivable and Revenue Concentrations The company has approximately 400 customers. One customer South Bay Ford represented more than 10% of sale in the last 12 months. The company is not dependent on a few major customers. |
Inventory | Inventory The Company does not own inventory, materials are purchased as needed from local suppliers; therefore, there was no additional inventory on hand at November 30, 2019 or August 31, 2019. |
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 $4,017 and $4,206 of depreciation expense during the three months ended November 30, 2019 and 2018, respectively. Net property and equipment were as follows at November 30, 2019 and August 31, 2019: 11-30-19 8-31-19 Equipment $ 369,673 $ 367,958 Vehicles 15,000 15,000 Furniture 24,000 24,000 Leasehold improvements 52,826 52,826 Subtotal 461,499 459,784 Less: accumulated depreciation 306,065 (302,048 ) Total Fixed Assets, Net $ 155,434 $ 157,736 |
Lease Commitments | Lease Commitments Service Team Inc. leases facilities at 1818 Rosslynn Avenue, Fullerton, California, to manufacture its products. The 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. As of November 30, 2019, the deferred rent related to this lease was $7,333 and is included in accrued expenses. The table below discloses the Company’s future minimum lease payment obligations as of November 30, 2019. 2020 $ 126,000 2021 168,000 2022 14,000 TOTAL: $ 308,000 |
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. Description Level 1 Level 2 Level 3 Total Convertible Note Payable-net $ 0 $ — $ — $ — Convertible Note Payable-net, in default 136,632 — — — Total $ 136,632 — — — The following table presents assets and liabilities that were measured and recognized at fair value as of August 31, 2019 on a recurring basis: Description Level 1 Level 2 Level 3 Total Convertible Note Payable-net $ 140,232 $ — $ — $ — Total $ 140,232 — — — |
Income Taxes | Income Taxes In assessing the realization of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on the level of historical operating results and the uncertainty of the economic conditions, the Company has recorded a full valuation allowance against its deferred tax assets at November 30, 2019 and August 31, 2019 where it cannot conclude that it is more likely than not that those assets will be realized. |
Revenue Recognition | Revenue Recognition Trade Leasing Inc dba Delta Stag Manufacturing Service Team Inc, 100% owned subsidiary Trade Leasing Inc dba Delta Stag Manufacturing 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 dba Delta Stag Manufacturing 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 Trade Leasing Inc 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. On September 1, 2018, we adopted Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification (ASC) Topic 605, Revenue Recognition (Topic 605). Results for reporting periods beginning after September 1, 2018 are presented under Topic 606. The impact of adopting the new revenue standard was not material to our financial statements and there was no adjustment to beginning retained earnings on September 1, 2018. Under Topic 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We determine revenue recognition through the following steps: ● identification of the contract, or contracts, with a customer; ● identification of the performance obligations in the contract; ● determination of the transaction price; ● allocation of the transaction price to the performance obligations in the contract; and ● recognition of revenue when, or as, we satisfy a performance obligation. |
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 month period ended November 30, 2018, because the Company operations resulted in net income, therefore additional dilutive securities were included in the diluted EPS. During the three month period ended November 30, 2019, there were net losses; therefore, 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 February 2016, the FASB (Topic In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), to clarify the principles of recognizing revenue and create common revenue recognition guidance between U.S. GAAP and International Financial Reporting Standards. Under ASU 2014-09, revenue is recognized when a customer obtains control of promised goods or services and is recognized at an amount that reflects the consideration expected to be received in exchange for such goods or services. In addition, ASU 2014-09 requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The ASU is effective for fiscal years beginning after December 15, 2017. The new revenue standard is principle based and interpretation of those principles may vary from company to company based on their unique circumstances. It is possible that interpretation, industry practice, and guidance may evolve as companies and the accounting profession work to implement this new standard. The implementation of this standard did not have a material effect on the Company’s results of operations. In January 2017, the FASB Simplifying the Test In August 2016, the Financial Accounting Standards Board (the “FASB”) Statement of Cash Flows (Topic In May 2017, the FASB issued ASU No. 2017-09, Stock Compensation - Scope of Modification Accounting Effective June 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) 606 — Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the commercial sales of products, licensing agreements and contracts to perform pilot studies by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied. For the comparative periods, revenue has not been adjusted and continues to be reported under ASC 605 — Revenue Recognition. Under ASC 605, revenue is recognized when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) the performance of service has been rendered to a customer or delivery has occurred; (3) the amount of fee to be paid by a customer is fixed and determinable; and (4) the collectability of the fee is reasonably assured. There was no impact on the Company’s financial statements as a result of adopting ASC 606. There are various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s consolidated financial position, results of operations or cash flows. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Nov. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Net property and equipment | Net property and equipment were as follows at November 30, 2019 and August 31, 2019: 11-30-19 8-31-19 Equipment $ 369,673 $ 367,958 Vehicles 15,000 15,000 Furniture 24,000 24,000 Leasehold improvements 52,826 52,826 Subtotal 461,499 459,784 Less: accumulated depreciation 306,065 (302,048 ) Total Fixed Assets, Net $ 155,434 $ 157,736 |
Schedule of Future Minimum Rental Payments for Operating Leases | The table below discloses the Company’s future minimum lease payment obligations as of November 30, 2019. 2020 $ 126,000 2021 168,000 2022 14,000 TOTAL: $ 308,000 |
Schedule of fair value of assets and liabilities measured on recurring basis | The following table presents assets and liabilities that were measured and recognized at fair value as of November 30, 2019 on a recurring basis: Description Level 1 Level 2 Level 3 Total Convertible Note Payable-net $ 0 $ — $ — $ — Convertible Note Payable-net, in default 136,632 — — — Total $ 136,632 — — — The following table presents assets and liabilities that were measured and recognized at fair value as of August 31, 2019 on a recurring basis: Description Level 1 Level 2 Level 3 Total Convertible Note Payable-net $ 140,232 $ — $ — $ — Total $ 140,232 — — — |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Nov. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Provions and Components | The components of these differences are as follows at November 30, 2019 and August 31, 2019: 11/30/19 8/31/19 Net tax loss carry-forwards $ 858,102 $ 844,216 Statutory rate 21 % 21 % Expected tax recovery 180,201 177,285 Change in valuation allowance $ (180,201 ) $ (177,285 ) Income tax provision — — Components of deferred tax asset: Non capital tax loss carry forwards 180,201 177,285 Less: valuation allowance $ (180,201 ) $ (177,285 Net deferred tax asset — — |
ORGANIZATION (Details Narrative
ORGANIZATION (Details Narrative) | Jun. 05, 2014shares |
Health Care Organizations [Abstract] | |
Number of shares of common stock acquired in Trade Leasing Inc. | 4,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Nov. 30, 2019 | Aug. 31, 2019 |
Total fixed assets, gross | $ 461,499 | $ 459,784 |
Less: accumulated depreciation | (306,065) | (302,048) |
Total fixed assets, net | 155,434 | 157,736 |
Equipment | ||
Total fixed assets, gross | 369,673 | 367,958 |
Vehicles | ||
Total fixed assets, gross | 15,000 | 15,000 |
Furniture | ||
Total fixed assets, gross | 24,000 | 24,000 |
Leasehold improvements | ||
Total fixed assets, gross | $ 52,826 | $ 52,826 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) | Nov. 30, 2019USD ($) |
Accounting Policies [Abstract] | |
2020 | $ 126,000 |
2021 | 168,000 |
2022 | 14,000 |
Total | $ 308,000 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) | 3 Months Ended | ||
Nov. 30, 2019 | Nov. 30, 2018 | Aug. 31, 2019 | |
Total Realized Loss | $ 0 | $ 0 | |
Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | |||
Convertible notes payable, net | 0 | $ 140,232 | |
Convertible Note Payable, net - in default | 136,632 | ||
Total | 136,632 | 140,232 | |
Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | |||
Convertible notes payable, net | 0 | 0 | |
Total | 0 | 0 | |
Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | |||
Convertible notes payable, net | 0 | 0 | |
Total | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | ||
Nov. 30, 2019 | Nov. 30, 2018 | Aug. 31, 2019 | |
Accounting Policies [Abstract] | |||
Accumulated deficit | $ (3,072,852) | $ (3,055,687) | |
Allowance for Accounts receivable | 14,310 | 14,310 | |
Lease of California office premises per month | 10,000 | ||
Cash insured by the Federal Deposit Insurance Corporation ("FDIC") | 250,000 | ||
Cash equivalents | 0 | 0 | |
Depreciation Expense | 4,017 | $ 4,206 | |
Deferred rent related to operating lease | 7,333 | ||
Inventory | $ 0 | $ 0 |
CAPITAL STOCK (Details Narrativ
CAPITAL STOCK (Details Narrative) - $ / shares | Nov. 30, 2019 | Aug. 31, 2019 |
Capital Stock | ||
Common Stock, par or stated value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 20,000,000,000 | 20,000,000,000 |
Preferred Stock, shares authorized | 150,000 | 150,000 |
Preferred Stock, par or stated value | $ 0.001 | $ 0.001 |
DEBT TRANSACTIONS (Details Narr
DEBT TRANSACTIONS (Details Narrative) - USD ($) | Nov. 10, 2017 | Jul. 10, 2017 | Jun. 12, 2017 | Jan. 22, 2019 | Mar. 30, 2018 | Feb. 27, 2018 | Jul. 24, 2017 | Apr. 28, 2017 | Apr. 17, 2017 | Nov. 30, 2019 | Nov. 30, 2018 | Aug. 31, 2019 | Aug. 31, 2019 | Aug. 30, 2019 | Aug. 31, 2018 | Aug. 31, 2017 | Aug. 30, 2017 |
Amortization of debt | $ 3,279 | $ 19,881 | |||||||||||||||
R.L. Cashman | |||||||||||||||||
Shares Issued for Note Conversion | $ 12,500 | ||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||
Maturity date | Apr. 17, 2018 | ||||||||||||||||
Debt discount due to conversion feature | $ 12,500 | ||||||||||||||||
Amortization of debt | $ 7,842 | $ 4,658 | |||||||||||||||
Conversion price | $ 0.0005 | ||||||||||||||||
JMJ Financial | |||||||||||||||||
Shares Issued for Note Conversion | $ 55,000 | ||||||||||||||||
Interest rate | 12.00% | ||||||||||||||||
Maturity date | Apr. 28, 2018 | ||||||||||||||||
Debt discount due to conversion feature | $ 37,080 | ||||||||||||||||
Amortization of debt | 0 | $ 0 | |||||||||||||||
Debt discount | 0 | $ 0 | $ 0 | ||||||||||||||
Conversion price | $ 0.00005 | ||||||||||||||||
Accrued interest | 7,222 | 7,222 | 7,222 | ||||||||||||||
JMJ Financial | Principal | |||||||||||||||||
Shares Issued for Note Conversion | 31,570 | ||||||||||||||||
JMJ Financial | Interest | |||||||||||||||||
Shares Issued for Note Conversion | 12,222 | ||||||||||||||||
Tangiers Capital Group | Convertible note One | |||||||||||||||||
Shares Issued for Note Conversion | $ 23,000 | ||||||||||||||||
Interest rate | 12.00% | ||||||||||||||||
Maturity date | Nov. 10, 2018 | ||||||||||||||||
Debt discount due to conversion feature | 20,000 | ||||||||||||||||
Amortization of debt | 18,526 | ||||||||||||||||
Debt discount | 0 | 0 | |||||||||||||||
Conversion price | $ 0.00005 | ||||||||||||||||
Accrued interest | 11,703 | 11,186 | 11,186 | ||||||||||||||
Tangiers Capital Group | Convertible note Two | |||||||||||||||||
Shares Issued for Note Conversion | $ 23,000 | ||||||||||||||||
Interest rate | 12.00% | ||||||||||||||||
Maturity date | Feb. 27, 2019 | ||||||||||||||||
Debt discount due to conversion feature | 20,000 | ||||||||||||||||
Amortization of debt | 11,342 | ||||||||||||||||
Debt discount | 0 | 0 | |||||||||||||||
Conversion price | $ 0.00005 | ||||||||||||||||
Accrued interest | 19,237 | 20,502 | 20,502 | ||||||||||||||
Debt discount due to original issue discount | 3,000 | ||||||||||||||||
Iconic Holdings LLC | |||||||||||||||||
Shares Issued for Note Conversion | $ 34,993 | ||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||
Maturity date | Jul. 10, 2018 | ||||||||||||||||
Debt discount due to conversion feature | 31,812 | ||||||||||||||||
Debt discount | 0 | 0 | |||||||||||||||
Conversion price | $ 0.00005 | ||||||||||||||||
Accrued interest | 39,221 | 37,471 | 37,471 | ||||||||||||||
Debt discount on issuance costs | 3,181 | ||||||||||||||||
Crown Bridge Partners LLC | Convertible note One | |||||||||||||||||
Shares Issued for Note Conversion | $ 63,750 | ||||||||||||||||
Interest rate | 6.00% | ||||||||||||||||
Maturity date | Jun. 12, 2018 | ||||||||||||||||
Debt discount due to conversion feature | 52,600 | ||||||||||||||||
Debt discount | 0 | 0 | |||||||||||||||
Conversion price | $ 0.00005 | ||||||||||||||||
Accrued interest | 2,180 | 1,817 | 1,817 | ||||||||||||||
Debt discount on issuance costs | 11,150 | ||||||||||||||||
Crossover Capital LLC | Convertible note One | |||||||||||||||||
Shares Issued for Note Conversion | $ 40,000 | ||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||
Maturity date | Jul. 24, 2018 | ||||||||||||||||
Debt discount due to conversion feature | $ 40,000 | ||||||||||||||||
Debt discount | 0 | ||||||||||||||||
Accrued interest | 9,428 | 7,917 | 7,917 | ||||||||||||||
Crossover Capital LLC | Convertible note Two | |||||||||||||||||
Conversion price | $ 0.00005 | ||||||||||||||||
IOU Financial | Convertible note One | |||||||||||||||||
Shares Issued for Note Conversion | $ 120,000 | ||||||||||||||||
Interest rate | 32.00% | ||||||||||||||||
Maturity date | Mar. 30, 2019 | ||||||||||||||||
Debt discount due to conversion feature | 38,630 | ||||||||||||||||
Amortization of debt | 22,331 | 16,299 | |||||||||||||||
Debt discount | 0 | 0 | 22,331 | ||||||||||||||
Loan outstanding | 0 | 0 | 73,200 | ||||||||||||||
IOU Financial | Convertible note Two | |||||||||||||||||
Shares Issued for Note Conversion | $ 75,000 | ||||||||||||||||
Interest rate | 32.00% | ||||||||||||||||
Maturity date | Oct. 23, 2019 | ||||||||||||||||
Debt discount due to conversion feature | 16,954 | ||||||||||||||||
Amortization of debt | 35,836 | ||||||||||||||||
Debt discount | 0 | 0 | |||||||||||||||
Accrued interest | 7,917 | 7,917 | |||||||||||||||
Loan outstanding | $ 16,999 | 16,999 | |||||||||||||||
Proceeds from loan | 27,244 | ||||||||||||||||
Working capital | $ 47,776 | ||||||||||||||||
IOU Financial | Principal | Convertible note One | |||||||||||||||||
Shares Issued for Note Conversion | 89,424 | $ 69,206 | |||||||||||||||
IOU Financial | Principal | Convertible note Two | |||||||||||||||||
Shares Issued for Note Conversion | $ 74,400 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Dec. 04, 2017 | Jul. 25, 2017 |
Stock-based compensation | $ 54,000 | |
R.L. Cashman | ||
Stock-based compensation | $ 1,000 | |
Stock granted | 50,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | |
Nov. 30, 2019 | Nov. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||
Net tax loss carry-forwards | $ 858,102 | $ 844,216 |
Statutory rate | 21.00% | 21.00% |
Expected tax recovery | $ 180,201 | $ 177,285 |
Change in valuation allowance | (180,201) | (177,285) |
Income tax provision | $ 0 | $ 0 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | Nov. 30, 2019 | Aug. 31, 2019 |
Components of deferred tax asset: | ||
Non capital tax loss carry forwards | $ 180,201 | $ 177,285 |
Less: valuation allowance | (180,201) | (177,285) |
Net deferred tax asset | $ 0 | $ 0 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narratives) - USD ($) | 3 Months Ended | |
Nov. 30, 2019 | Nov. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry forwards | $ (858,102) | $ (844,216) |
Expiration date | Dec. 31, 2035 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) | 3 Months Ended |
Nov. 30, 2019USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Lease of California office premises per month | $ 10,000 |
Deferred rent related to operating lease | $ 7,333 |