Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Feb. 28, 2015 | Apr. 15, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | AVALANCHE INTERNATIONAL, CORP. | |
Entity Central Index Key | 1537169 | |
Document Type | 10-Q | |
Document Period End Date | 28-Feb-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 5,508,500 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2015 |
BALANCE_SHEETS
BALANCE SHEETS (USD $) | Feb. 28, 2015 | Nov. 30, 2014 |
Current assets | ||
Cash | $1,271 | $2,247 |
Accounts receivable | 46 | |
Prepaids | 6,575 | 9,040 |
Prepaid stock for services | 283,542 | |
Inventory | 20,758 | 25,900 |
Total current assets | 312,192 | 37,187 |
Other assets | 705 | 526 |
Product license | 42,750 | 29,250 |
Total assets | 355,647 | 66,963 |
Current liabilities | ||
Accounts payable and accrued expenses | 70,883 | 76,917 |
Accounts payable, related party | 90,175 | 88,572 |
Accrued interest | 2,553 | 388 |
Accrued compensation | 32,073 | 9,912 |
Due to related parties | 32,935 | 6,927 |
Convertible note payable | 63,250 | 63,250 |
Loans payable | 20,000 | 18,300 |
Total current liabilities | 311,869 | 264,266 |
Total liabilities | 311,869 | 264,266 |
Stockholders Equity (Deficit) | ||
Common stock value, $0.001 par value; 75,000,000 shares authorized; 5,358,500 and 5,144,400 shares issued and outstanding, respectively | 5,359 | 5,144 |
Class A Preferred stock, $0.001 par value; 50,000 shares authorized, 29,380 and 14,000 shares issued and outstanding, respectively | 29 | 14 |
Preferred stock, $0.001 par value, 9,950,000 shares authorized; no shares issued and outstanding | ||
Additional paid-in capital | 622,365 | 203,445 |
Accumulated deficit | -583,975 | -405,906 |
Total stockholders equity (deficit) | 43,778 | -197,303 |
Total liabilities and stockholders equity (deficit) | $355,647 | $66,963 |
BALANCE_SHEETS_parenthetical
BALANCE SHEETS (parenthetical) (USD $) | Feb. 28, 2015 | Nov. 30, 2014 |
Balance Sheet Related Disclosures [Abstract] | ||
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued and outstanding | 5,358,500 | 5,144,400 |
Class A preferred stock, par value | $0.00 | $0.00 |
Class A preferred stock, shares authorized | 50,000 | 50,000 |
Class A preferred stock, shares issued and outstanding | 29,380 | 14,000 |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, share authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued and outstanding |
STATEMENTS_OF_OPERATIONS
STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | |
Feb. 28, 2015 | Feb. 28, 2014 | |
Income Statement [Abstract] | ||
Revenues | $14,995 | |
Cost of revenue | 8,534 | |
Gross margin | 6,461 | |
Operating Expenses | ||
Advertising and marketing | 8,364 | |
Salary expense | 22,920 | |
Professional fees | 5,450 | 3,818 |
General and administrative | 143,596 | 758 |
Total operating expense | 180,330 | 4,576 |
Net loss from operations | -173,869 | -4,576 |
Other expense | ||
Interest expense | -4,200 | |
Total other expense | -4,200 | |
Loss before income tax | -178,069 | -4,576 |
Provision for income taxes | ||
Net (loss) | ($178,069) | ($4,576) |
Loss per common share - Basic and diluted | ($0.03) | $0 |
Weighted average common shares outstanding - Basic and diluted | 5,218,650 | 5,070,000 |
STATEMENTS_OF_CASH_FLOWS
STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
Feb. 28, 2015 | Feb. 28, 2014 | |
Cash Flows from Operating Activities | ||
Net loss for the period | ($178,069) | ($4,576) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Stock services | 56,708 | |
Financing fees | 7,000 | |
Changes in operating assets and liabilities: | ||
(Increase) in accounts receivable | -46 | |
Decrease in prepaid expenses | 2,465 | |
Decrease in inventory | 5,142 | |
(Increase) in other assets | -13,679 | |
(Increase) / (decrease) in accounts payable and accrued expense | -4,431 | 1,826 |
Increase in accrued interest | 2,165 | |
Increase in accrued compensation | 22,161 | |
Net cash used in operating activities | -100,584 | -2,750 |
Cash flows from investing activities | ||
Cash Flows from Financing Activities | ||
Payments of note payable | -5,300 | |
Advances from related parties | 26,008 | 2,750 |
Proceeds from issuance of common stock | 2,000 | |
Proceeds from issuance of preferred stock | 76,900 | |
Net cash provided by financing activities | 99,608 | 2,750 |
Decrease in cash | -976 | |
Cash, beginning of the period | 2,247 | |
Cash, end of the period | 1,271 | |
Supplemental Disclosures | ||
Cash paid for interest | ||
Cash paid for income tax |
ORGANIZATION_AND_DESCRIPTION_O
ORGANIZATION AND DESCRIPTION OF BUSINESS | 3 Months Ended |
Feb. 28, 2015 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | Avalanche International, Corp. (“the Company”) was incorporated under the laws of the State of Nevada, U.S. on April 14, 2011. The company had plans to distribute crystallized glass tile in the North American markets to wholesale customers. On May 14, 2014, the Company entered into an Agreement of Conveyance, Transfer and Assignment of Assets and Assumption of Obligations (the “Agreement”) with our sole officer and director, John Pulos. Pursuant to the Agreement, the Company transferred all assets to Mr. Pulos. In exchange for this assignment of assets, Mr. Pulos agreed to assume and cancel all liabilities due to him. In conjunction with the change in management, it was decided to abandon this line of business and become a holding company with operations at the subsidiary levels only. The Company formed its first wholly owned subsidiary, Smith and Ramsay Brands, LLC (“SRB”), on May 19, 2014. The Company acquired certain intellectual property, know how, product, name license and other capabilities from Smith and Ramsay, LLC, a Nevada company. Smith and Ramsay Brands, LLC is a manufacturer and distributor of flavored liquids for electronic vaporizers and eCigarettes and distributor of vape accessories. SRB manufactures its premium signature brand of eLiquid, Smith and Ramsay, a line that features all natural flavors produced in the United States. SRB rolled out its flagship product to targeted areas in the fall of 2014, following its pre-launch phase. The Smith and Ramsay line was manufactured, packaged and strategically distributed on a limited basis to generate revenue in test markets. The Company’s goal is to maintain a high standard of quality and to insure the production and warehouse environments, processes and procedures continue to meet or exceed guidelines of the FDA, and are in line with ISO and cGMP standards. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended | ||
Feb. 28, 2015 | |||
Accounting Policies [Abstract] | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Basis of Presentation | ||
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC") for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments necessary in order for the financial statements to not be misleading have been reflected herein. Operating results for the interim period ended February 28, 2015 are not necessarily indicative of the results that can be expected for the full year. The Company has adopted a November 30 year end. | |||
Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company's system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented. | |||
Use of Estimates | |||
The preparation of 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 assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In management’s opinion, all adjustments necessary for a fair statement of the results for the interim period have been made, and all adjustments are of a normal recurring nature. | |||
Principles of Consolidation | |||
The consolidated financial statements include the accounts of Avalanche International, Corp. and its wholly-owned subsidiary Smith and Ramsay Brands, LLC. All significant intercompany accounts and transactions have been eliminated. | |||
Cash and Cash Equivalents | |||
The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. There were no cash equivalents as of February 28, 2015 and November 30, 2014. | |||
Inventories | |||
Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out method; market value is based upon estimated replacement costs. As of February 28, 2015 inventory consists of $20,758 of product and accessories. | |||
Fair Value of Financial instruments | |||
For certain of the Company’s non-derivative financial instruments, including cash and cash equivalents, receivables, prepaids, inventory, accounts payable, accrued liabilities, and notes payable, the carrying amount approximates fair value due to the short-term maturities of these instruments. The estimated fair value of long-term debt is based primarily on borrowing rates currently available to the Company for similar debt issues. The fair value approximates the carrying value of long-term debt. | |||
FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. FASB ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows: | |||
· | Level 1. Observable inputs such as quoted prices in active markets; | ||
· | Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; | ||
· | Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. | ||
As of February 28, 2015, the company had no assets or liabilities that would be considered level 1, 2 or 3. | |||
Revenue Recognition | |||
The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. | |||
During the three months ended February 28, 2015, the Company sold $10,236 in products to Vape Nation, generating 67.7% of its revenue. | |||
Income Taxes | |||
The Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Income and Comprehensive Income in the period that includes the enactment date. | |||
The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to uncertainty income taxes. Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25. | |||
Basic and diluted net loss per share | |||
The Company computes net loss per share of common stock in accordance with FASB ASC 260, Earnings per Share (“FASB ASC 260”). Under the provisions of FASB ASC 260, basic net income (loss) per share is computed using the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options and warrants and the conversion of convertible promissory notes. Potentially dilutive shares were excluded from the computation as of February 28, 2015 and 2014 since they would have been anti-dilutive. | |||
Recent Accounting Pronouncements | |||
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued, that might have a material impact on its financial position or results of operations. |
GOING_CONCERN
GOING CONCERN | 3 Months Ended |
Feb. 28, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has an accumulated deficit of $583,975 as of February 28, 2015 and a net loss of $178,069 for the three months ended February 28, 2015, raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with loans and/or private placement of common stock. |
PRODUCT_LICENSE
PRODUCT LICENSE | 3 Months Ended |
Feb. 28, 2015 | |
Notes to Financial Statements | |
PRODUCT LICENSE | Effective May 23, 2014, the Company licenses certain intellectual property, know how, product and capability from Smith and Ramsay, LLC, a Nevada company. Currently the Company is paying a minimum per bottle licensing fee of $4,500 per month for the perpetual licensing rights, recipes, industry advice, brand and company names, etc., against a royalty stream for twelve months with a 4% royalty fee of gross revenue thereafter in perpetuity. This license also provides in perpetuity the first right of refusal of any new products or flavors developed by Smith and Ramsay, LLC. |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Feb. 28, 2015 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | As of February 28, 2015, the Company owed its CEO $6,883 for expense reimbursement. The amount due for expense reimbursement is non-interest bearing, due upon demand and unsecured. |
As of February 28, 2015, the Company owed a member of the Board of Directors $2,984 for expense reimbursement. The amount due for expense reimbursement is non-interest bearing, due upon demand and unsecured. | |
As of February 28, 2015, the Company owed MCKEA Holdings, LLC $23,068. Amount is due for both expense reimbursement and short term loans that were made to cover certain operating expenses. The amount due is non-interest bearing, due upon demand and unsecured. | |
During the three months ended February 28, 2015, the Company sold $10,236 in products to Vape Nation, generating 67.7% of its revenue. Vape Nation, is 50% owned by MCKEA Holdings, LLC. MCKEA Holdings, LLC is the majority member of Philou Ventures, LLC, which is our controlling shareholder. Kristine L. Ault is the Manager of MCKEA Holdings, LLC and the wife to the Chairman of Avalanche International, Corp. | |
Cross Click Media, Inc. performs sales, marketing, and investor relation services for the Company. As of February 28, 2015, we have paid approximately $157,000 for these services. As of February 28, 2015 and November 30, 2014, we had accounts payable due to CrossClick Media of $90,175 and $88,572, respectively. MCKEA Holdings, LLC is the controlling shareholder of Cross Click Media, Inc. MCKEA Holdings, LLC is also the majority member of Philou Ventures, LLC, which is our controlling shareholder. |
LOANS_PAYABLE
LOANS PAYABLE | 3 Months Ended |
Feb. 28, 2015 | |
Accounting Policies [Abstract] | |
LOANS PAYABLE | On November 26, 2014, the Company executed a promissory note with Argent Offset, LLC for $12,500. The note included a $500 loan fee, accrued interest at 10%, compounded monthly, and was due December 5, 2014. A late payment fee of $500 per day was to be incurred from December 6, 2014 through December 7, 2014 and then increases to $1,000 per day. On February 1, 2015, we entered into a Temporary Forbearance Agreement with Argent. Under the forbearance agreement, we agreed to pay a forbearance fee of $7,500. The full $20,000 now owing will bear interest at an annual rate of 10% until due on August 1, 2015. Further, we have agreed to pay 12.5% of any new funds invested in the company until the amount due is paid in full. Interest accrued on this note as of February 28, 2015 is $466. |
CONVERTIBLE_NOTE_PAYABLE
CONVERTIBLE NOTE PAYABLE | 3 Months Ended |
Feb. 28, 2015 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTE PAYABLE | On November 3, 2014, the Company executed a convertible promissory note for $63,250 with LG Capital Funding, LLC. The note bears interest at 8% per annum and is due on or before November 3, 2015. The note includes a 15% original issue discount and is convertible at a 40% discount any time during the period beginning 180 days following the date of the note. Accrued interest on the note as of February 28, 2014 is $1,622. |
COMMON_STOCK
COMMON STOCK | 3 Months Ended |
Feb. 28, 2015 | |
Equity [Abstract] | |
COMMON STOCK | The Company is authorized to issue 75,000,000 common shares with a par value of $0.001 per share. |
On August 22, 2014, the Company approved a two for one stock split. All shares have been retroactively adjusted to reflect the split. | |
During the quarter ended February 28, 2015, the Company issued 1,600 shares of common stock at a price of $1.25 per share for total cash proceeds of $2,000. | |
During the quarter ended February 28, 2015, the Company issued 200,000 shares of common stock for consulting services. The stock was issued at the closing price on the date of grant of $1.60 for total non-cash expense of $320,000. The expense is being recognized over the six month term of the agreement. As of February 28, 2015, $53,333 has been expensed with the balance debited to prepaid stock for services. | |
During the quarter ended February 28, 2015, the Company issued 12,500 shares of common stock for consulting services. The stock was issued at the closing price on the date of grant of $1.62 for total non-cash expense of $20,250. The expense is being recognized over the six month term of the agreement. As of February 28, 2015, $3,375 has been expensed with the balance debited to prepaid stock for services. |
PREFERRED_STOCK
PREFERRED STOCK | 3 Months Ended |
Feb. 28, 2015 | |
Equity [Abstract] | |
PREFERRED STOCK | The Company is authorized to issue 10,000,000 preferred shares with a par value of $0.001 per share. |
On July 31, 2014, the Board of Directors designated a series of preferred stock titled Class A Convertible Preferred Stock consisting of 50,000 shares. Each share of Class A Convertible Preferred Stock (“preferred stock”) has a stated value of $5.00 per share. The holders of preferred stock have no voting rights. The holders are entitled to receive cumulative dividends at a rate of 10% of the stated value per annum, payable twice a year, subject to the availability of funds and approval by the Board of Directors. In the discretion of the Board of Directors dividends may be paid with common stock. In the event of liquidation or dissolution of the Company each holder of preferred stock shall be entitled to be paid in cash $5 per share, | |
At any time after August 31, 2015, a holder of preferred stock may, at their option, convert all or a portion of their outstanding shares into common stock on a one for one basis. On February 1, 2016, all issued and outstanding preferred stock shall be automatically converted into shares of common stock. | |
On January 30, 2015, the Company issued 15,380 shares of preferred stock at a price of $5.00 per share for total cash proceeds of $76,900 to Finiks Capital, LLC. |
CONSOLIDATION
CONSOLIDATION | 3 Months Ended | ||||||||||||||||
Feb. 28, 2015 | |||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||
CONSOLIDATION | The consolidated financial statements include the accounts of Avalanche International, Corp. and its wholly-owned subsidiary Smith and Ramsay Brands, LLC. A separate presentation of each Company as of February 28, 2015 and for the three months ended February 28, 2015 is as follows. | ||||||||||||||||
Avalanche International, Corp. | Smith and Ramsay Brands, LLC | Elimination | Consolidated | ||||||||||||||
Current Assets: | |||||||||||||||||
Cash | $ | 506 | $ | 765 | $ | — | $ | 1,271 | |||||||||
Accounts receivable | — | 46 | — | 46 | |||||||||||||
Prepaids | 5,605 | 970 | — | 6,575 | |||||||||||||
Prepaid stock for services | 283,542 | — | — | 283,542 | |||||||||||||
Inventory | — | 20,758 | — | 20,758 | |||||||||||||
Intercompany | 185,322 | — | 185,322 | — | |||||||||||||
Total current assets | 474,975 | 22,539 | 185,322 | 312,192 | |||||||||||||
Other assets | — | 705 | — | 705 | |||||||||||||
Product license | — | 42,750 | — | 42,750 | |||||||||||||
Total assets | $ | 474,975 | $ | 65,994 | $ | 185,322 | $ | 355,647 | |||||||||
Current Liabilities | |||||||||||||||||
Accounts payable and accrued expenses | $ | 57,462 | $ | 13,421 | $ | — | $ | 70,883 | |||||||||
Accounts payable, related party | 23,26 | 66,849 | — | 90,175 | |||||||||||||
Accrued interest | 2,088 | 465 | — | 2,553 | |||||||||||||
Accrued compensation | 9,900 | 22,173 | — | 32,073 | |||||||||||||
Due to related parties | 6,177 | 26,758 | — | 32,935 | |||||||||||||
Convertible note payable | 63,250 | — | — | 63,250 | |||||||||||||
Loans payable | — | 20,000 | — | 20,000 | |||||||||||||
Intercompany | — | 185,322 | 185,322 | — | |||||||||||||
Total current liabilities | 162,203 | 334,988 | 185,322 | 311,869 | |||||||||||||
Total liabilities | 162,203 | 334,988 | 185,322 | 311,869 | |||||||||||||
Stockholders' Equity (Deficit) | |||||||||||||||||
Preferred stock | 29 | — | — | 29 | |||||||||||||
Common stock | 5,359 | — | — | 5,359 | |||||||||||||
Additional paid-in capital | 622,365 | — | — | 622,365 | |||||||||||||
Accumulated deficit | (314,981 | ) | (268,994 | ) | — | (583,975 | ) | ||||||||||
Total stockholders’ equity (deficit) | 312,772 | (268,994 | ) | — | 43,778 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 474,975 | $ | 65,994 | $ | 185,322 | $ | 355,647 |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Feb. 28, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | In accordance with FASB ASC 855-10, the Company has analyzed its operations subsequent to February 28, 2015 through the October 15, 2014 and has determined that it does not have any material subsequent events to disclose in these financial statements except for the following. |
Subsequent to February 28, 2015, the Company issued 100,000 shares of common stock to Hallmark Investments, Inc., for consulting services to be provided to the Company. | |
On March 17, 2015, the Company executed a convertible promissory note for $10,750 with Strategic IR, Inc. The note bears interest at 10% per annum and is due on or before April 16, 2015. The note includes a one-time loan fee of $1,750 for a total due of $12,500. This note was not repaid by April 16, 2015 resulting in an increase of the interest rate to 21%. | |
On March 27, 2015, the Company executed a convertible promissory note for $100,000 with Dr. Gary Gelbfish. The note bears interest at 10% per annum and is due on or before September 23, 2015. If not paid by the due date the note and any accrued interest is convertible at the lesser of $0.50 per share or a 50% discount of the average closing price for the twenty days preceding the conversion. In addition, the loan requires a one-time loan fee of $10,000 and the issuance of 50,000 shares of common stock. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended | ||
Feb. 28, 2015 | |||
Accounting Policies [Abstract] | |||
Basis of Presentation | The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC") for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments necessary in order for the financial statements to not be misleading have been reflected herein. Operating results for the interim period ended February 28, 2015 are not necessarily indicative of the results that can be expected for the full year. The Company has adopted a November 30 year end. | ||
Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company's system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented. | |||
Use of Estimates | The preparation of 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 assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In management’s opinion, all adjustments necessary for a fair statement of the results for the interim period have been made, and all adjustments are of a normal recurring nature. | ||
Principles of Consolidation | The consolidated financial statements include the accounts of Avalanche International, Corp. and its wholly-owned subsidiary Smith and Ramsay Brands, LLC. All significant intercompany accounts and transactions have been eliminated. | ||
Cash and Cash Equivalents | The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. There were no cash equivalents as of February 28, 2015 and November 30, 2014. | ||
Inventories | Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out method; market value is based upon estimated replacement costs. As of February 28, 2015 inventory consists of $20,758 of product and accessories. | ||
Fair Value of Financial instruments | For certain of the Company’s non-derivative financial instruments, including cash and cash equivalents, receivables, prepaids, inventory, accounts payable, accrued liabilities, and notes payable, the carrying amount approximates fair value due to the short-term maturities of these instruments. The estimated fair value of long-term debt is based primarily on borrowing rates currently available to the Company for similar debt issues. The fair value approximates the carrying value of long-term debt. | ||
FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. FASB ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows: | |||
· | Level 1. Observable inputs such as quoted prices in active markets; | ||
· | Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; | ||
· | Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. | ||
As of February 28, 2015, the company had no assets or liabilities that would be considered level 1, 2 or 3. | |||
Revenue Recognition | The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. | ||
During the three months ended February 28, 2015, the Company sold $10,236 in products to Vape Nation, generating 67.7% of its revenue. | |||
Income Taxes | The Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Income and Comprehensive Income in the period that includes the enactment date. | ||
The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to uncertainty income taxes. Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25. | |||
Basic and diluted net loss per share | The Company computes net loss per share of common stock in accordance with FASB ASC 260, Earnings per Share (“FASB ASC 260”). Under the provisions of FASB ASC 260, basic net income (loss) per share is computed using the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options and warrants and the conversion of convertible promissory notes. Potentially dilutive shares were excluded from the computation as of February 28, 2015 and 2014 since they would have been anti-dilutive. | ||
Recent Accounting Pronouncements | The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued, that might have a material impact on its financial position or results of operations. |
CONSOLIDATION_Tables
CONSOLIDATION (Tables) | 3 Months Ended | ||||||||||||||||
Feb. 28, 2015 | |||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||
Schedule of Condensed Balance Sheet | Avalanche International, Corp. | Smith and Ramsay Brands, LLC | Elimination | Consolidated | |||||||||||||
Current Assets: | |||||||||||||||||
Cash | $ | 506 | $ | 765 | $ | — | $ | 1,271 | |||||||||
Accounts receivable | — | 46 | — | 46 | |||||||||||||
Prepaids | 5,605 | 970 | — | 6,575 | |||||||||||||
Prepaid stock for services | 283,542 | — | — | 283,542 | |||||||||||||
Inventory | — | 20,758 | — | 20,758 | |||||||||||||
Intercompany | 185,322 | — | 185,322 | — | |||||||||||||
Total current assets | 474,975 | 22,539 | 185,322 | 312,192 | |||||||||||||
Other assets | — | 705 | — | 705 | |||||||||||||
Product license | — | 42,750 | — | 42,750 | |||||||||||||
Total assets | $ | 474,975 | $ | 65,994 | $ | 185,322 | $ | 355,647 | |||||||||
Current Liabilities | |||||||||||||||||
Accounts payable and accrued expenses | $ | 57,462 | $ | 13,421 | $ | — | $ | 70,883 | |||||||||
Accounts payable, related party | 23,26 | 66,849 | — | 90,175 | |||||||||||||
Accrued interest | 2,088 | 465 | — | 2,553 | |||||||||||||
Accrued compensation | 9,900 | 22,173 | — | 32,073 | |||||||||||||
Due to related parties | 6,177 | 26,758 | — | 32,935 | |||||||||||||
Convertible note payable | 63,250 | — | — | 63,250 | |||||||||||||
Loans payable | — | 20,000 | — | 20,000 | |||||||||||||
Intercompany | — | 185,322 | 185,322 | — | |||||||||||||
Total current liabilities | 162,203 | 334,988 | 185,322 | 311,869 | |||||||||||||
Total liabilities | 162,203 | 334,988 | 185,322 | 311,869 | |||||||||||||
Stockholders' Equity (Deficit) | |||||||||||||||||
Preferred stock | 29 | — | — | 29 | |||||||||||||
Common stock | 5,359 | — | — | 5,359 | |||||||||||||
Additional paid-in capital | 622,365 | — | — | 622,365 | |||||||||||||
Accumulated deficit | (314,981 | ) | (268,994 | ) | — | (583,975 | ) | ||||||||||
Total stockholders’ equity (deficit) | 312,772 | (268,994 | ) | — | 43,778 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 474,975 | $ | 65,994 | $ | 185,322 | $ | 355,647 |
ORGANIZATION_AND_DESCRIPTION_O1
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Narrative) | 3 Months Ended |
Feb. 28, 2015 | |
Organization And Description Of Business Details Narrative | |
Date of Incorporation | 14-Apr-11 |
Date of Subsidiary Incorporation | 19-May-14 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | 3 Months Ended | |
Feb. 28, 2015 | Nov. 30, 2014 | |
Accounting Policies [Abstract] | ||
Current Fiscal Year End | -19 | |
Cash Equivalants | $0 | |
Inventory | 20,758 | 25,900 |
Product sold | $10,236 | |
Revenue | 66.70% |
GOING_CONCERN_Details_Narrativ
GOING CONCERN (Details Narrative) (USD $) | 3 Months Ended | ||
Feb. 28, 2015 | Feb. 28, 2014 | Nov. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Accumulated deficit | ($583,975) | ($405,906) | |
Net loss | ($178,069) | ($4,576) |
PRODUCT_LICENSE_Details_Narrat
PRODUCT LICENSE (Details Narrative) (USD $) | Feb. 28, 2015 |
Notes to Financial Statements | |
Monthly licensing fee | $4,500 |
Royalty fee | 4.00% |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details Narrative) (USD $) | 3 Months Ended | |
Feb. 28, 2015 | Nov. 30, 2014 | |
Product sold | $10,236 | |
Revenue | 66.70% | |
Services | 157,000 | |
Accounts payable, related party | 90,175 | 88,572 |
CEO | ||
Expense reimbursement | 6,883 | |
Board of Directors | ||
Expense reimbursement | 2,984 | |
MCKEA Holdings | ||
Expense reimbursement | $23,068 |
LOANS_PAYABLE_Details_Narrativ
LOANS PAYABLE (Details Narrative) (Argent Offset, USD $) | 0 Months Ended | 1 Months Ended | 15 Months Ended | |
Feb. 02, 2015 | Dec. 07, 2014 | Dec. 31, 2014 | Feb. 28, 2015 | |
Argent Offset | ||||
Date issuance | 26-Nov-14 | |||
Promissory note | $12,500 | |||
Loan fee | 500 | |||
Maturity date | 5-Dec-14 | |||
Interest | 10.00% | |||
Late payment fee | 500 | 1,000 | ||
Accrued interest | 466 | |||
Forbearance fee | 7,500 | |||
Promissory note balance | $20,000 | |||
New Maturity date | 1-Aug-15 |
CONVERTIBLE_NOTE_PAYABLE_Detai
CONVERTIBLE NOTE PAYABLE (Details Narrative) (LG Capital Funding, USD $) | 15 Months Ended |
Feb. 28, 2015 | |
LG Capital Funding | |
Date issuance | 3-Nov-14 |
Promissory note | $63,250 |
Interest | 8.00% |
Original issue discount | 15.00% |
Convertible rate | 40.00% |
Accrued interest | $1,622 |
COMMON_STOCK_Details_Narrative
COMMON STOCK (Details Narrative) (USD $) | 3 Months Ended | |
Feb. 28, 2015 | Nov. 30, 2014 | |
Common stock, Par Value | $0.00 | $0.00 |
Common stock, Shares | 75,000,000 | 75,000,000 |
Common Stock Issued, Shares | 1,600 | |
Common Stock Issued, Price Per Share | $1.25 | |
Common Stock Issued, Value | $2,000 | |
Stock Split | 2 | |
Prepaid Stock for Services | 283,542 | |
Consulting Services | ||
Common stock, Par Value | $1.60 | |
Shares Issued for Consulting Services, Shares | 200,000 | |
Non-cash Expense | 320,000 | |
Prepaid Stock for Services | 53,333 | |
Consulting Services 1 | ||
Common stock, Par Value | $1.62 | |
Shares Issued for Consulting Services, Shares | 12,500 | |
Non-cash Expense | 20,250 | |
Prepaid Stock for Services | $3,375 |
PREFERRED_STOCK_Details_Narrat
PREFERRED STOCK (Details Narrative) (USD $) | 3 Months Ended | |
Feb. 28, 2015 | Nov. 30, 2014 | |
Equity [Abstract] | ||
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, share authorized | 10,000,000 | 10,000,000 |
Preferred stock Class A, shares | 50,000 | |
Preferred stock Class A, price per share | $5 | |
Preferred stock issued, shares | 15,380 | |
Preferred stock issued, price per share | $5 | |
Preferred stock, value | $76,900 |
CONSOLIDATION_Schedule_of_Cond
CONSOLIDATION - Schedule of Condensed Balance Sheet (Details) (USD $) | Feb. 28, 2015 | Nov. 30, 2014 | Feb. 28, 2014 | Nov. 30, 2013 |
Current Assets: | ||||
Cash | $1,271 | $2,247 | ||
Accounts receivable | 46 | |||
Prepaids | 6,575 | 9,040 | ||
Prepaid stock for services | 283,542 | |||
Inventory | 20,758 | 25,900 | ||
Total current assets | 312,192 | 37,187 | ||
Other assets | 705 | 526 | ||
Product license | 42,750 | 29,250 | ||
Total assets | 355,647 | 66,963 | ||
Current Liabilities | ||||
Accounts payable and accrued expenses | 70,883 | 76,917 | ||
Accounts payable, related party | 90,175 | 88,572 | ||
Accrued Interest | 2,553 | 388 | ||
Accrued compensation | 32,073 | 9,912 | ||
Due to related parties | 32,935 | 6,927 | ||
Convertible note payable | 63,250 | 63,250 | ||
Loans payable | 20,000 | 18,300 | ||
Total current liabilities | 311,869 | 264,266 | ||
Total liabilities | 311,869 | 264,266 | ||
Stockholders Equity (Deficit) | ||||
Preferred stock | ||||
Common stock | 5,359 | 5,144 | ||
Additional paid-in capital | 622,365 | 203,445 | ||
Accumulated deficit | -583,975 | -405,906 | ||
Total stockholders equity (deficit) | 43,778 | -197,303 | ||
Total liabilities and stockholders equity | 355,647 | 66,963 | ||
Avalanche International, Corp | ||||
Current Assets: | ||||
Cash | 506 | |||
Accounts receivable | ||||
Prepaids | 5,605 | |||
Prepaid stock for services | 283,542 | |||
Inventory | ||||
Intercompany | 185,322 | |||
Total current assets | 474,975 | |||
Other assets | ||||
Product license | ||||
Total assets | 474,975 | |||
Current Liabilities | ||||
Accounts payable and accrued expenses | 57,462 | |||
Accounts payable, related party | 23,326 | |||
Accrued Interest | 2,088 | |||
Accrued compensation | 9,900 | |||
Due to related parties | 6,177 | |||
Convertible note payable | 63,250 | |||
Loans payable | ||||
Intercompany | ||||
Total current liabilities | 162,203 | |||
Total liabilities | 162,203 | |||
Stockholders Equity (Deficit) | ||||
Preferred stock | 29 | |||
Common stock | 5,359 | |||
Additional paid-in capital | 622,365 | |||
Accumulated deficit | -314,981 | |||
Total stockholders equity (deficit) | 312,772 | |||
Total liabilities and stockholders equity | 474,975 | |||
Smith and Ramsay Brands, L.L.C. | ||||
Current Assets: | ||||
Cash | 765 | |||
Accounts receivable | 46 | |||
Prepaids | 970 | |||
Prepaid stock for services | ||||
Inventory | 20,758 | |||
Intercompany | ||||
Total current assets | 22,539 | |||
Other assets | 705 | |||
Product license | 42,750 | |||
Total assets | 65,994 | |||
Current Liabilities | ||||
Accounts payable and accrued expenses | 13,421 | |||
Accounts payable, related party | 66,849 | |||
Accrued Interest | 465 | |||
Accrued compensation | 22,173 | |||
Due to related parties | 26,758 | |||
Convertible note payable | ||||
Loans payable | 20,000 | |||
Intercompany | 185,322 | |||
Total current liabilities | 334,988 | |||
Total liabilities | 334,988 | |||
Stockholders Equity (Deficit) | ||||
Preferred stock | ||||
Common stock | ||||
Additional paid-in capital | ||||
Accumulated deficit | -268,994 | |||
Total stockholders equity (deficit) | -268,994 | |||
Total liabilities and stockholders equity | 65,994 | |||
Elimination | ||||
Current Assets: | ||||
Cash | ||||
Accounts receivable | ||||
Prepaids | ||||
Prepaid stock for services | ||||
Inventory | ||||
Intercompany | 185,322 | |||
Total current assets | 185,322 | |||
Other assets | ||||
Product license | ||||
Total assets | 185,322 | |||
Current Liabilities | ||||
Accounts payable and accrued expenses | ||||
Accounts payable, related party | ||||
Accrued Interest | ||||
Accrued compensation | ||||
Due to related parties | ||||
Convertible note payable | ||||
Loans payable | ||||
Intercompany | 185,322 | |||
Total current liabilities | 185,322 | |||
Total liabilities | 185,322 | |||
Stockholders Equity (Deficit) | ||||
Preferred stock | ||||
Common stock | ||||
Additional paid-in capital | ||||
Accumulated deficit | ||||
Total stockholders equity (deficit) | ||||
Total liabilities and stockholders equity | 185,322 | |||
Consolidated | ||||
Current Assets: | ||||
Cash | 1,271 | |||
Accounts receivable | 46 | |||
Prepaids | 6,575 | |||
Prepaid stock for services | 283,542 | |||
Inventory | 20,758 | |||
Intercompany | ||||
Total current assets | 312,192 | |||
Other assets | 705 | |||
Product license | 42,750 | |||
Total assets | 355,647 | |||
Current Liabilities | ||||
Accounts payable and accrued expenses | 70,883 | |||
Accounts payable, related party | 90,175 | |||
Accrued Interest | 2,553 | |||
Accrued compensation | 32,073 | |||
Due to related parties | 32,935 | |||
Convertible note payable | 63,250 | |||
Loans payable | 20,000 | |||
Intercompany | ||||
Total current liabilities | 311,869 | |||
Total liabilities | 311,869 | |||
Stockholders Equity (Deficit) | ||||
Preferred stock | 29 | |||
Common stock | 5,359 | |||
Additional paid-in capital | 622,365 | |||
Accumulated deficit | -583,975 | |||
Total stockholders equity (deficit) | 43,778 | |||
Total liabilities and stockholders equity | $355,647 |
SUBSEQUENT_EVENTS_Details_Narr
SUBSEQUENT EVENTS (Details Narrative) (USD $) | 3 Months Ended | |
Feb. 28, 2015 | Nov. 30, 2014 | |
Common stock, shares issued | 5,358,500 | 5,144,400 |
Hallmark Investments | ||
Common Stock Issued for Services, Shares | 10,000 | |
Strategic IR | ||
Date Issued | 17-Mar-15 | |
Promissory Note | 10,750 | |
Interest | 10.00% | |
Maturity Date | 15-Apr-15 | |
Loan Fee | 1,750 | |
Total Due | 12,500 | |
Interest, Increase | 21.00% | |
Dr. Gelbfish | ||
Date Issued | 27-Mar-15 | |
Promissory Note | 100,000 | |
Interest | 10.00% | |
Maturity Date | 23-Sep-15 | |
Loan Fee | 10,000 | |
Conversion Rate | 0.5 | |
Common stock, shares issued | 50,000 |