Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 09, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | Starco Brands, Inc. | |
Entity Central Index Key | 1,539,850 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
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 | 36,263,534 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
BALANCE SHEETS (Unaudited)
BALANCE SHEETS (Unaudited) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash | $ 274,787 | |
Accounts receivable | 3,027 | |
Prepaid and other assets | 59,852 | 6,601 |
Total Current Assets | 337,666 | 6,601 |
Deposit | 3,500 | 3,500 |
Total Assets | 341,166 | 10,101 |
Current Liabilities: | ||
Accounts payable | 193,495 | 417,387 |
Other payable and accruals | 360,048 | 270,988 |
Accrued compensation | 97,150 | 87,850 |
Due to an officer | 1,393 | |
Common stock to be issued | 400,000 | |
Loan payable - related party | 198,816 | |
Notes payable | 74,199 | 21,400 |
Total Current Liabilities | 1,323,708 | 799,018 |
Total Liabilities | 1,323,708 | 799,018 |
Stockholders' (Deficit): | ||
Common Stock par value $0.001 300,000,000 shares authorized, 72,527,068 and 27,605,564 shares issued, respectively | 72,530 | 27,607 |
Additional paid in capital | 18,314,037 | 14,553,464 |
Accumulated deficit | (19,369,109) | (15,369,988) |
Total Stockholders' (Deficit) | (982,542) | (788,917) |
Total Liabilities and Stockholders' (Deficit) | $ 341,166 | $ 10,101 |
BALANCE SHEETS (Unaudited) (Par
BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 72,527,068 | 27,605,564 |
STATEMENTS OF OPERATIONS (Unaud
STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Revenues | $ 3,027 | $ 28,239 | $ 3,027 | $ 202,841 |
Costs of goods sold | (503,946) | |||
Gross margin | 3,027 | 28,239 | 3,027 | (301,105) |
Operating Expenses: | ||||
Compensation expense | 19,497 | 65,750 | 150,497 | 197,750 |
Officer stock compensation | 3,495,810 | 3,495,810 | ||
Advertising and promotion | 6,987 | 6,987 | 52,407 | |
Professional fees | 25,940 | 11,020 | 57,236 | 53,520 |
General and administrative | 158,795 | 30,608 | 224,234 | 172,621 |
Total operating expenses | 3,707,029 | 107,378 | 3,934,764 | 476,298 |
Loss from operations | (3,704,002) | (79,139) | (3,931,737) | (777,403) |
Other Income (Expense): | ||||
Interest expense | (33,641) | (1,715) | (35,439) | (3,941) |
Loss on conversion of debt | (259,739) | |||
Loss on disposal of property and equipment | (20,461) | |||
Interest income | 37 | 37 | ||
Other income | 6,000 | 6,000 | ||
Gain on extinguishment of debt | 221,757 | 8,242 | 221,757 | 19,635 |
Total other income (expense) | 194,153 | 6,527 | (67,384) | (4,767) |
Loss before provision for income taxes | (3,509,849) | (72,612) | (3,999,121) | (782,170) |
Provision for income taxes | ||||
Net Loss | $ (3,509,849) | $ (72,612) | $ (3,999,121) | $ (782,170) |
Loss per Share, Basic & Diluted | $ (0.08) | $ 0 | $ (0.11) | $ (0.03) |
Weighted Average Shares Outstanding | 41,795,643 | 26,296,868 | 38,064,406 | 26,296,868 |
STATEMENTS OF CASH FLOWS (Unaud
STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
CASH FLOW FROM OPERATING ACTIVITES: | ||
Net Loss for the Period | $ (3,999,121) | $ (782,170) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Deferred compensation | 16,324 | |
Depreciation | 14,839 | |
Loss on disposal of property and equipment | (20,461) | |
Loss on inventory | 499,861 | |
Gain on extinguishment of debt | (221,757) | (19,635) |
Additional shares issued for prior debt conversion | 259,739 | |
Financing costs for related party note | 25,000 | |
Stock based compensation | 5,469 | |
Stock based compensation - related party | 3,495,810 | |
Changes in Operating Assets and Liabilities: | ||
Accounts receivable | (3,027) | 158,482 |
Prepaids & other assets | (53,251) | 57,960 |
Inventory | 4,085 | |
Accounts payable | (2,135) | 211,381 |
Product returns & allowances | (386,457) | |
Accrued expenses | 142,862 | 184,420 |
Net Cash Used in Operating Activities | (350,411) | (20,449) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Net Cash Used by Investing Activities | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Advances from officers | 178,070 | 49,405 |
Repayment of officer advance | (5,671) | (25,215) |
Proceeds from the sale of common stock | 400,000 | |
Proceeds from notes payable | 81,270 | 36,843 |
Payments on notes payable | (28,471) | (75,087) |
Net Cash Provided by Financing Activities | 625,198 | (14,054) |
Net Increase (decrease) in Cash | 274,787 | (34,503) |
Cash at Beginning of Period | 40,485 | |
Cash at End of Period | 274,787 | 5,982 |
Cash paid during the year for: | ||
Interest | ||
Franchise and income taxes | ||
Supplemental non-cash disclosure: | ||
Wages payable contributed to paid in capital | $ 44,478 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Starco Brands, Inc. (formerly Insynergy Products, Inc.) (the "Company") was incorporated in the State of Nevada on January 26, 2010, to engage in Direct Response marketing of consumer products with the goal of producing sales through television and/or retail. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The Company’s unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 may differ from those estimates. The accompanying unaudited condensed financial statements reflect all adjustments, consisting of only normal recurring items, which, in the opinion of management, are necessary for a fair statement of the results of operations for the periods shown and are not necessarily indicative of the results to be expected for the full year ending December 31, 2017. These unaudited condensed financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles 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. Revenue Recognition The Company follows ASC 605-10-S99-1, Revenue Recognition, Recently issued 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 | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | NOTE 3 – GOING CONCERN The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has an accumulated deficit of $19,369,109 at September 30, 2017, had a net loss of $3,999,121 and net cash used in operating activities of $350,411 for the nine months ended September 30, 2017. The Company’s ability to raise additional capital through the future issuances of common stock and/or debt financing is unknown. The obtainment of additional financing, the successful development of the Company’s contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. These conditions and the ability to successfully resolve these factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties. The Company has started to embark on a new strategy to ensure the Company can operate as a going concern; although there are no assurances that any of these measures will be successful. The Company has raised $400,000 in seed financing to embark on its new strategy. Management is analyzing and beginning to execute new potential growth paths and has the potential for a restructuring. The Company is currently performing its due diligence for a corporate reorganization. This due diligence phase, involving counsel and other qualified professionals necessary in order to cautiously explore appropriate steps to restructure the Company for the purposes of executing a new business model within the Company’s core competencies. |
ACCOUNTS PAYABLE
ACCOUNTS PAYABLE | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE | NOTE 4 – ACCOUNTS PAYABLE A portion of the Company’s accounts payable is the result of chargebacks for product that was not sold by a former customer. The Company also has other payables that are several years old for which management is in discussion with the vendors to settle those liabilities for a lesser amount. Chargeback $ 3,075 Aged payables 140,003 Other vendor payables 50,417 $ 193,495 |
NOTES PAYABLE
NOTES PAYABLE | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
NOTES PAYABLE | NOTE 5 – NOTES PAYABLE As of September 30, 2017, the Company owes $21,400 on a loan payable. The loan is uncollateralized, non-interest bearing and is due on demand. The Company expects that they will be able to have this liability dismissed by the payee in the near future. The Company also has two financing loans for its Director and Officer Insurance. As of September 30, 2017 and December 31, 2016 the loan has a balance of $52,799 and $0, respectively, it bears interest at 3.7% and is due within one year. |
COMMITMENTS & CONTIGENCIES
COMMITMENTS & CONTIGENCIES | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
COMMITMENTS & CONTIGENCIES | NOTE 6 – COMMITMENTS & CONTIGENCIES The Company currently occupies office space in Burbank, California. The Company signed a three-year lease starting January 1, 2016. Current monthly lease payments are $3,527 with yearly increases. The lease required a deposit of $3,500 which was paid on December 10, 2015. As of September 30, 2017, the Company has accrued rent due of $10,006. Minimum lease payments over the next two years are as follows: Year Amount 2017 $ 42,330 2018 43,596 Total $ 127,023 Investment Agreement On July 9, 2014, the Board of Directors approved an investment arrangement with an individual. Per the terms of the agreement, the investor transferred $150,000 to the Company for which he was entitled to the following: $1 per unit sold of a fitness product through all retail outlets including online and retail shopping shows until the investment was paid back in full. Once the original investment was recouped the investor shall then receive a 2% royalty in perpetuity on all future retail sales of the fitness product. The investment remains with the Company and is disclosed as an accrued liability on the balance sheet. Since the product for which the investment was intended was never produced this agreement is being renegotiated. Stock Warrants On August 4, 2017, the Company executed a settlement and general release agreement with Carwash, LLC. Per the terms of that agreement the Company will issue warrants to purchase up to 2,000,000 shares of common stock. The number of warrants to be issued is contingent on the final restructuring of the Company. The warrants have an exercise price of $0.35 and a term of five years. The aggregate fair value of the warrants totaled $5,468 based on the Black Scholes Merton pricing model using the following estimates: exercise price of $0.35, 1.82% risk free rate, 27.47% volatility and expected life of the options of five years. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
RELATED PARTY TRANSACTIONS | NOTE 7 – RELATED PARTY TRANSACTIONS During the nine months ended September 30, 2017, Sanford Lang, the Company’s Chairman and former CEO, advanced the Company $198,816 to pay for general operating expenses. The advances are uncollateralized, non-interest bearing and due on demand. |
COMMON STOCK
COMMON STOCK | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
COMMON STOCK | NOTE 8 – COMMON STOCK On April 4, 2017, the Company’s Board of Directors determined it was in the best interest of the Company to issue additional shares to Paul Bershin and Alan Diamante in consideration for funds previously loaned to the Company. Accordingly, the Company issued 3,811,594 shares of common stock to Paul Bershin at $0.03 per share and issued 4,846,376 shares of common stock to Alan Diamante at $0.03 per share. As the notes have been previously converted to equity in a prior period, the stock issuance, which was valued at $259,739, was expensed and recorded as a loss on conversion of debt in the accompanying statement of operations. On April 4, 2017, the Company received $250,000 from two of its investors for the purchase of common stock. The number of shares to be issued is still to be determined as it will be based upon a future valuation of the Company at which time the proper allocation will be determined. The $250,000 has been credited to a stock payable account as of September 30, 2017. On August 18, 2017, the Company received $150,000 from an investor for the purchase of common stock. The number of shares to be issued is still to be determined as it will be based upon a future valuation of the Company at which time the proper allocation will be determined. The $150,000 has been credited to a stock payable account as of September 30, 2017. On August 25, 2017, the Company authorized the issuance of 36,263,534 shares of common stock to our President, Ross Sklar, in consideration for his forfeiture of warrants to purchase 35,000,000 shares of the Company’s common stock at an exercise price of $0.23. Per ASC 718-20-35-8, the Company accounted for the stock issuance based on the incremental cost of the fair value over the fair value of the cancelled warrants on the date of cancellation. The aggregate fair value of the warrants cancelled totaled $855,814 based on the Black Scholes Merton pricing model using the following estimates: exercise price of $0.23, 2.00% risk free rate, 31.91% volatility and expected life of the options of 8.06 years. The fair value of the shares issued was $4,351,624 based on the closing price of the stock of $0.12 on August 25, 2017, resulting in a net increase in fair value of $3,495,810. |
STOCK WARRANTS
STOCK WARRANTS | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
STOCK WARRANTS | NOTE 9 – STOCK WARRANTS A summary of the status of the Company’s outstanding stock warrants and changes during the periods is presented below: Shares available to purchase with warrants Weighted Average Price Weighted Average Fair Value Outstanding, December 31, 2016 51,000,000 $ 0.23 $ 0.186 Issued - $ - $ - Exercised - $ - $ - Cancelled (35,000,000) $ 0.23 $ - Expired (16,000,000) $ 0.23 $ - Outstanding, September 30, 2017 - $ - $ - Exercisable, September 30, 2017 - $ - $ - |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 10 – SUBSEQUENT EVENTS Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855, from the balance sheet date through the date the financial statements were issued, and has determined that no material subsequent events exist other than the following. Subsequent to September 30, 2017, the Company received $200,000 from investors for the purchase of common stock. The number of shares to be issued is still to be determined as it will be based upon a future valuation of the Company at which time the proper allocation will be determined. |
SUMMARY OF SIGNIFICANT ACCOUN16
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The Company’s unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 may differ from those estimates. The accompanying unaudited condensed financial statements reflect all adjustments, consisting of only normal recurring items, which, in the opinion of management, are necessary for a fair statement of the results of operations for the periods shown and are not necessarily indicative of the results to be expected for the full year ending December 31, 2017. These unaudited condensed financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles 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. |
Revenue recognition | Revenue Recognition The Company follows ASC 605-10-S99-1, Revenue Recognition, |
Recently issued accounting pronouncements | Recently issued 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. |
ACCOUNTS PAYABLE (Tables)
ACCOUNTS PAYABLE (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounts Payable Tables | |
Schedule of Accounts Payable | Chargeback $ 3,075 Aged payables 140,003 Other vendor payables 50,417 $ 193,495 |
COMMITMENTS & CONTIGENCIES (Tab
COMMITMENTS & CONTIGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments Contigencies Tables | |
Schedule of Operating lease | Year Amount 2017 $ 42,330 2018 43,596 Total $ 127,023 |
STOCK WARRANTS (Tables)
STOCK WARRANTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
Schedule of Outstanding Stock Warrants | A summary of the status of the Company’s outstanding stock warrants and changes during the periods is presented below: Shares available to purchase with warrants Weighted Average Price Weighted Average Fair Value Outstanding, December 31, 2016 51,000,000 $ 0.23 $ 0.186 Issued - $ - $ - Exercised - $ - $ - Cancelled (35,000,000) $ 0.23 $ - Expired (16,000,000) $ 0.23 $ - Outstanding, September 30, 2017 - $ - $ - Exercisable, September 30, 2017 - $ - $ - |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Going Concern Details Narrative | |||||
Accumulated Deficit | $ 19,369,109 | $ 19,369,109 | $ 15,369,988 | ||
Net Loss | $ 3,509,849 | $ 72,612 | $ 3,999,121 | $ 782,170 |
ACCOUNTS PAYABLE (Details)
ACCOUNTS PAYABLE (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Accounts Payable Details | ||
Chargeback | $ 3,075 | |
Aged payables | 140,003 | |
Other vendor payables | 50,417 | |
Accounts payable | $ 193,495 | $ 417,387 |
COMMITMENTS & CONTIGENCIES (Det
COMMITMENTS & CONTIGENCIES (Details) | Sep. 30, 2017USD ($) |
Commitments Contigencies Details | |
2,017 | $ 42,330 |
2,018 | 43,596 |
Total | $ 127,023 |
COMMITMENTS & CONTIGENCIES (D23
COMMITMENTS & CONTIGENCIES (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 10, 2015 | |
Commitments Contigencies Details Narrative | ||
Current Lease payment | $ 3,527 | |
Lease required a deposit | $ 3,500 |
STOCK WARRANTS (Details)
STOCK WARRANTS (Details) - Stock Warrants [Member] | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Shares | |
Outstanding-beginning of year (in shares) | shares | 51,000,000 |
Issued | shares | |
Exercised | shares | |
Forfieted | shares | (35,000,000) |
Expired | shares | (16,000,000) |
Outstanding-end of year (in shares) | shares | 51,000,000 |
Weighted Average Exercise Price | |
Outstanding-beginning of year (in dollars per share) | $ 0.23 |
Issued | |
Exercised | |
Forfieted | 0.23 |
Expired | 0.23 |
Outstanding-end of year (in dollars per share) | |
Weighted Average Fair Value | |
Outstanding-beginning of year (in dollars per share) | 0.186 |
Issued | |
Exercised | |
Forfeited | |
Expired | |
Outstanding-end of year (in dollars per share) |