Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 17, 2018 | |
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 | Mar. 31, 2018 | |
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 | 159,090,914 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,018 |
BALANCE SHEETS (Unaudited)
BALANCE SHEETS (Unaudited) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash | $ 158,472 | $ 314,181 |
Accounts receivable | 599 | 4,692 |
Prepaid and other expenses | 28,445 | 43,218 |
Total Current Assets | 187,516 | 362,091 |
Deposit | 3,500 | 3,500 |
Total Assets | 191,016 | 365,591 |
Current Liabilities: | ||
Accounts payable | 222,576 | 194,462 |
Other payable and accruals | 276,382 | 276,149 |
Accrued compensation | 30,550 | 30,050 |
Due to an officer | 1,190 | |
Loan payable - related party | 362,664 | 362,664 |
Notes payable | 13,327 | 33,158 |
Total Current Liabilities | 906,689 | 896,483 |
Total Liabilities | 906,689 | 896,483 |
Stockholders' (Deficit): | ||
Common Stock par value $0.001 300,000,000 shares authorized, 150,000,004 and 2,417,569 shares issued, respectively | 150,000 | 2,418 |
Additional paid in capital | 14,880,746 | 14,965,081 |
Common stock to be issued | 600,000 | 600,000 |
Retained deficit | (16,346,419) | (16,098,391) |
Total Stockholders' (Deficit) | (715,673) | (530,892) |
Total Liabilities and Stockholders' (Deficit) | $ 191,016 | $ 365,591 |
BALANCE SHEETS (Unaudited) (Par
BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
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 | 150,000,004 | 2,417,569 |
Common stock, shares outstanding | 150,000,004 | 2,417,569 |
STATEMENTS OF OPERATIONS (Unaud
STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Revenues | $ 763 | |
Operating Expenses: | ||
Compensation expense | 86,466 | 66,250 |
Advertising and promotion | 1,352 | |
Professional fees | 75,890 | 21,384 |
General and administrative | 80,132 | 37,412 |
Total operating expenses | 243,840 | 125,046 |
Loss from operations | (243,077) | (125,046) |
Other Income (Expense): | ||
Interest expense | (7,981) | (864) |
Interest income | 30 | |
Other income | 3,000 | |
Total other expense | (4,951) | (864) |
Loss before provision for income taxes | (248,028) | (125,910) |
Provision for income taxes | ||
Net Loss | $ (248,028) | $ (125,910) |
Loss per Share, Basic & Diluted | $ 0 | $ (0.14) |
Weighted Average Shares Outstanding | 56,531,124 | 920,185 |
STATEMENTS OF CASH FLOWS (Unaud
STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CASH FLOW FROM OPERATING ACTIVITES: | ||
Net Loss for the Period | $ (248,028) | $ (125,910) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Stock based compensation | 8,181 | |
Stock based compensation - related party | 31,666 | |
Contributed services | 23,400 | |
Changes in Operating Assets and Liabilities: | ||
Accounts receivable | 4,093 | |
Prepaids & other assets | 14,773 | (35) |
Accounts payable | 22,420 | (1,485) |
Accrued expenses | 7,617 | 65,938 |
Net Cash (Used) in Operating Activities | (135,878) | (61,492) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Net Cash Used by Investing Activities | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Advances from a related party | 2,000 | 92,988 |
Repayment of advances from a related party | (2,000) | (27,282) |
Payments on notes payable | (19,831) | |
Net Cash Provided by Financing Activities | (19,831) | 65,706 |
Net Increase (decrease) in Cash | (155,709) | 4,214 |
Cash at Beginning of Period | 314,181 | |
Cash at End of Period | 158,472 | 4,214 |
Cash paid during the year for: | ||
Interest | ||
Income taxes |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 3 Months Ended |
Mar. 31, 2018 | |
Organization And Description Of Business | |
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. On September 7, 2017 the Company filed an Amendment to the Articles of Incorporation to change the corporate name to Starco Brands, Inc. The Board determined the change of the Company’s name was in the best interests of the Company due to changes in our current and anticipated business operations. In July 2017 the Company entered into a licensing agreement with The Starco Group, located in Los Angeles, California. The Company intends to focus our marketing efforts on the novel consumer products manufactured by The Starco Group. The Starco Group is predominantly an aerosol and liquid fill private label manufacturer which manufactures DIY/Hardware, paints, coatings and adhesives, household, hair care, disinfectants, automotive, motorcycle, arts & crafts, personal care cosmetics, personal care FDA, sun care, food, cooking oils, beverage and spirits and wine. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2018 | |
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, 2017. 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 Beginning January 1, 2017, the Company implemented ASC 606, Revenue from Contracts with Customers. Although the new revenue standard is expected to have an immaterial impact, if any, on our ongoing net income, we did implement changes to our processes related to revenue recognition and the control activities within them. These included the development of new policies based on the five-step model provided in the new revenue standard, ongoing contract review requirements, and gathering of information provided for disclosures. 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 | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | NOTE 3 – GOING CONCERN The accompanying unaudited 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 $16,346,419 at March 31, 2018, had a net loss of $248,028 and net cash used in operating activities of $135,878 for the three months ended March 31, 2018. 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. During 2017 the Company embarked 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 $600,000 in seed financing to embark on its new strategy. Management is analyzing and beginning to execute new potential growth paths. |
ACCOUNTS PAYABLE
ACCOUNTS PAYABLE | 3 Months Ended |
Mar. 31, 2018 | |
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. March 31, 2018 December 31, 2017 Chargeback $ 3,075 $ 3,075 Aged payables 99,145 99,145 Other vendor payables 120,356 92,242 $ 222,576 $ 194,462 |
NOTES PAYABLE
NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
NOTES PAYABLE | NOTE 5 – NOTES PAYABLE The Company has two financing loans for its Director and Officer Insurance. As of March 31, 2018, and December 31, 2017 the loans have a balance of $13,327 and $33,158, respectively. The loans bear interest at 3.7% and are due within one year. |
COMMITMENTS & CONTIGENCIES
COMMITMENTS & CONTIGENCIES | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018, and December 31, 2017, the Company has accrued rent due of $15,891 and $13,949, respectively. 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. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
RELATED PARTY TRANSACTIONS | NOTE 7 – RELATED PARTY TRANSACTIONS During the year ended December 31, 2017, Sanford Lang, the Company’s Chairman and former CEO, advanced the Company $289,821 to pay for general operating expenses. The advances are uncollateralized, require a monthly interest payment of $2,545 and due on demand. On February 26, 2018, the Board approved the issuance of 117,282,442 shares of common stock to its officers and directors for services rendered at a price per share of $0.00027 for total non-cash expense of $31,666. As of March 31, 2018, the Company owed The Starco Group, Inc, (“TSG”) $72,843 for expenses paid by The Starco Group on behalf of the Company for expenses to launch licensed brands. Once royalties exceed $250,000 in the aggregate, TSG will deduct the incurred expenses from the subsequent royalty payments until TSG is paid in full. During the three months ended March 31, 2018, the Company recognized $763 of royalty revenue and had a $599 receivable from The Starco Group. During the three months ended March 31, 2018, the Company’s Chairman advanced the Company $2,000 to pay for an operating expense. The advance was repaid by March 31, 2018. As of March 31, 2018, the Company owed $1,190 to two directors for expense reimbursement. |
COMMON STOCK
COMMON STOCK | 3 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
COMMON STOCK | NOTE 8 – COMMON STOCK On April 4, 2017, the Company received $250,000 from two of its investors for the purchase of 3,787,879 shares of common stock at $0.066 per share. As of March 31, 2018, the shares have not yet been issued; therefore, the $250,000 has been credited to a stock payable account. On August 18, 2017, the Company received $150,000 from an investor for the purchase of 2,272,727 shares of common stock at $0.066 per share. As of March 31, 2018, the shares have not yet been issued; therefore, the $150,000 has been credited to a stock payable account. On August 25, 2017, the Company authorized the issuance of 1,208,784 shares of common stock to our CEO, Ross Sklar, in consideration for his forfeiture of warrants to purchase 1,116,667 shares of the Company’s common stock. This transaction was originally accounted for under 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 as of September 30, 2018. The Company subsequently obtained a valuation of the stock price on August 25, 2017 from a third-party valuation firm. The valuation determined that the value of the stock was $0. The Company reversed the accounting on the original entry during the fourth quarter so that no additional expense was recognized on the shares issued. In October 2017, the Company received $200,000 from investors for the purchase of 3,030,303 shares of common stock at $0.066 per share. As of March 31, 2018, the shares have not yet been issued; therefore, the $150,000 has been credited to a stock payable account. On February 26, 2018, the Board of Directors of Starco Brands, Inc. approved the issuance of an aggregate of 30,300,000 post-reverse shares of common stock to 16 third parties in consideration for services valued at $8,181. |
STOCK WARRANTS
STOCK WARRANTS | 3 Months Ended |
Mar. 31, 2018 | |
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 Weighted Outstanding, December 31, 2016 1,700,000 $ 6.90 $ 0.186 Issued 2,000,000 $ 1.05 $ 5 Exercised — $ — $ — Cancelled (1,166,667 ) $ 6.90 $ — Expired (533,333 ) $ 6.90 $ — Outstanding, December 31, 2017 2,000,000 $ 1.05 $ 5 Issued — $ — $ — Exercised — $ — $ — Cancelled — $ — $ — Expired — $ — $ — Outstanding, March 31, 2018 2,000,000 $ 1.05 $ 5 Exercisable, March 31, 2018 — $ — $ — |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2018 | |
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. On April 3, 2018, the Board approved the issuance of warrants to purchase 2,000,000 shares of common stock pursuant to the terms of the settlement and general release agreement with Carwash, LLC (Note 9). Subsequent to March 31, 2018, the company issued 9,090,910 shares of common stock to four investors for the $600,000 previously received and credited to common stock to be issued. |
SUMMARY OF SIGNIFICANT ACCOUN16
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
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, 2017. |
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 Beginning January 1, 2017, the Company implemented ASC 606, Revenue from Contracts with Customers. Although the new revenue standard is expected to have an immaterial impact, if any, on our ongoing net income, we did implement changes to our processes related to revenue recognition and the control activities within them. These included the development of new policies based on the five-step model provided in the new revenue standard, ongoing contract review requirements, and gathering of information provided for disclosures. |
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) | 3 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Account Payable | March 31, 2018 December 31, 2017 Chargeback $ 3,075 $ 3,075 Aged payables 99,145 99,145 Other vendor payables 120,356 92,242 $ 222,576 $ 194,462 |
STOCK WARRANTS (Tables)
STOCK WARRANTS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
Schedule of Outstanding Stock Warrants | Shares available to purchase with warrants Weighted Weighted Outstanding, December 31, 2016 1,700,000 $ 6.90 $ 0.186 Issued 2,000,000 $ 1.05 $ 5 Exercised — $ — $ — Cancelled (1,166,667 ) $ 6.90 $ — Expired (533,333 ) $ 6.90 $ — Outstanding, December 31, 2017 2,000,000 $ 1.05 $ 5 Issued — $ — $ — Exercised — $ — $ — Cancelled — $ — $ — Expired — $ — $ — Outstanding, March 31, 2018 2,000,000 $ 1.05 $ 5 Exercisable, March 31, 2018 — $ — $ — |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Going Concern Details Narrative | |||
Accumulated Deficit | $ 16,346,419 | $ 16,098,391 | |
Net Loss | 248,028 | $ 125,910 | |
Net Cash (Used) in Operating Activities | $ 135,878 | $ 61,492 |
ACCOUNTS PAYABLE (Details)
ACCOUNTS PAYABLE (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Chargeback | $ 3,075 | $ 3,075 |
Aged payables | 99,145 | 99,145 |
Other vendor payables | 120,356 | 92,242 |
Account Payable | $ 222,576 | $ 194,462 |
COMMITMENTS & CONTIGENCIES (Det
COMMITMENTS & CONTIGENCIES (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 10, 2015 | |
Commitments Contigencies Details Narrative | |||
Current Lease payment | $ 3,527 | ||
Lease required a deposit | $ 3,500 | ||
Accured Rent | $ 15,891 | $ 13,949 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Feb. 26, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 |
General Operating Expenses | $ 80,132 | $ 37,412 | ||
Common Shares Issued | 117,282,442 | 150,000,004 | 2,417,569 | |
Common Share, per price | $ 0.00027 | $ 0.001 | $ 0.001 | |
Non Cash Expenses | $ 31,666 | |||
The Starco Group [Member] | ||||
Royalty Revenue | $ 763 | |||
Account Receivable | $ 599 | |||
Chairman And Former CEO [Member] | ||||
General Operating Expenses | $ 289,821 |
STOCK WARRANTS (Details)
STOCK WARRANTS (Details) - Stock Warrants [Member] - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Shares | ||
Outstanding-beginning of year (in shares) | 2,000,000 | 1,700,000 |
Issued | 2,000,000 | |
Forfieted | (1,166,667) | |
Expired | (533,333) | |
Outstanding-end of year (in shares) | 2,000,000 | 2,000,000 |
Weighted Average Exercise Price | ||
Outstanding-beginning of year (in dollars per share) | $ 1.05 | $ 6.90 |
Issued | 1.05 | |
Forfieted | 6.90 | |
Expired | 6.90 | |
Outstanding-end of year (in dollars per share) | 1.05 | 1.05 |
Weighted Average Fair Value | ||
Outstanding-beginning of year (in dollars per share) | 5 | .0186 |
Issued | 5 | |
Outstanding-end of year (in dollars per share) | $ 5 | $ 5 |