Starco Brands (STCB) 10-Q 14 Aug 19 2019 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Aug. 12, 2019
Document And Entity Information
Entity Registrant Name	Starco Brands, Inc.
Entity Central Index Key	0001539850
Document Type	10-Q
Document Period End Date	Jun. 30, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		159,090,914
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2019
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Ex Transition Period	false
Entity Interactive Data Current	Yes
Entity Incorporation, State or Country Code	CA
Entity File Number	0-54892

CONDENSED BALANCE SHEETS (Unaud

CONDENSED BALANCE SHEETS (Unaudited) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Current Assets:
Cash	$ 9,549	$ 721
Accounts receivable	18,632	17,504
Prepaid and other expenses	9,390	25,974
Total Current Assets	37,571	44,199
Right of use lease asset, operating, net	104,314
Deposit	3,500	3,500
Total Assets	145,385	47,699
Current Liabilities:
Accounts payable	175,736	171,954
Other payable and accruals	281,141	280,914
Accrued compensation	47,650	45,850
Lease obligation	38,553
Loan payable - related party	385,165	373,346
Notes payable	10,092	26,731
Total Current Liabilities	938,337	898,795
Lease obligation - noncurrent portion	66,442
Total Liabilities	1,004,779	898,795
Stockholders' (Deficit):
Common Stock, par value $0.001 300,000,000 shares authorized, 159,090,914 and 159,090,914 shares issued and outstanding, respectively	159,091	159,091
Additional paid in capital	15,553,555	15,530,155
Accumulated deficit	(16,572,040)	(16,540,342)
Total Stockholders' Deficit	(859,394)	(851,096)
Total Liabilities and Stockholders' Deficit	$ 145,385	$ 47,699

CONDENSED BALANCE SHEETS (Una_2

CONDENSED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2019	Dec. 31, 2018
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	159,090,914	159,090,914
Common stock, shares outstanding	159,090,914	159,090,914

CONDENSED STATEMENTS OF OPERATI

CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income Statement [Abstract]
Revenues	$ 117,486	$ 39,716	$ 178,749	$ 40,479
Operating Expenses:
Compensation expense	46,230	61,698	92,950	148,164
Professional fees	8,686	13,239	30,443	89,129
General and administrative	65,858	66,489	101,154	147,973
Total operating expenses	120,774	141,426	224,547	385,266
Loss from operations	(3,288)	(101,710)	(45,798)	(344,787)
Other Income (Expense):
Interest expense	(7,803)	(7,927)	(15,834)	(15,908)
Gain on forgiveness of debt	19,434		19,434
Interest income		13		43
Other income	5,250	3,000	10,500	6,000
Total other expense	16,881	(4,914)	14,100	(9,865)
Income (loss) before provision for income taxes	13,593	(106,624)	(31,698)	(354,652)
Provision for income taxes
Net Income (Loss)	$ 13,593	$ (106,624)	$ (31,698)	$ (354,652)
Loss per Share, Basic & Diluted	$ 0	$ 0	$ 0	$ 0
Weighted Average Shares Outstanding	159,090,914	157,925,413	159,090,914	107,508,363

STATEMENTS OF STOCKHOLDERS EQUI

STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT) (Unaudited) - USD ($)	Common Stock	Additional Paid-In Capital	Common Stock to be Issued	Accumulated Deficit	Total
Beginning Balance at Dec. 31, 2017	$ 2,418	$ 14,965,081	$ 600,000	$ (16,098,391)	$ (530,892)
Beginning Balance, Shares at Dec. 31, 2017	2,417,569
Shares issued for service	$ 30,300	(22,119)			8,181
Shares issued for service, Shares	30,300,000
Shares issued to officer and directors for services	$ 117,282	(85,616)			31,666
Shares issued to officer and directors for services, Shares	117,282,442
Contributed services		23,400			23,400
Net Loss for the period				(248,028)	(248,028)
Ending Balance at Mar. 31, 2018	$ 150,000	14,880,746	600,000	(16,346,419)	(715,673)
Ending Balance, Shares at Mar. 31, 2018	150,000,011
Beginning Balance at Dec. 31, 2017	$ 2,418	14,965,081	600,000	(16,098,391)	(530,892)
Beginning Balance, Shares at Dec. 31, 2017	2,417,569
Contributed services					46,800
Net Loss for the period					(354,652)
Ending Balance at Jun. 30, 2018	$ 159,091	15,495,055		(16,453,043)	(798,897)
Ending Balance, Shares at Jun. 30, 2018	15,495,055
Beginning Balance at Mar. 31, 2018	$ 150,000	14,880,746	600,000	(16,346,419)	(715,673)
Beginning Balance, Shares at Mar. 31, 2018	150,000,011
Contributed services		23,400			23,400
Shares issued for stock payable	$ 9,091	590,909	(600,000)
Shares issued for stock payable, in shares	9,090,903
Net Loss for the period				(106,624)	(106,624)
Ending Balance at Jun. 30, 2018	$ 159,091	15,495,055		(16,453,043)	(798,897)
Ending Balance, Shares at Jun. 30, 2018	15,495,055
Beginning Balance at Dec. 31, 2018	$ 159,091	15,530,155		(16,540,342)	(851,096)
Beginning Balance, Shares at Dec. 31, 2018	15,495,055
Contributed services		11,700			11,700
Net Loss for the period				(45,291)	(45,291)
Ending Balance at Mar. 31, 2019	$ 159,091	15,541,855		(16,585,633)	(884,687)
Ending Balance, Shares at Mar. 31, 2019	15,495,055
Beginning Balance at Dec. 31, 2018	$ 159,091	15,530,155		(16,540,342)	(851,096)
Beginning Balance, Shares at Dec. 31, 2018	15,495,055
Contributed services					23,400
Net Loss for the period					(31,698)
Ending Balance at Jun. 30, 2019	$ 159,091	15,553,555		(16,572,040)	(859,394)
Ending Balance, Shares at Jun. 30, 2019	15,495,055
Beginning Balance at Mar. 31, 2019	$ 159,091	15,541,855		(16,585,633)	(884,687)
Beginning Balance, Shares at Mar. 31, 2019	15,495,055
Contributed services		11,700			11,700
Net Loss for the period				13,593	13,593
Ending Balance at Jun. 30, 2019	$ 159,091	$ 15,553,555		$ (16,572,040)	$ (859,394)
Ending Balance, Shares at Jun. 30, 2019	15,495,055

CONDENSED STATEMENTS OF CASH FL

CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
CASH FLOW FROM OPERATING ACTIVITES:
Net Loss for the Period	$ (31,698)	$ (354,652)
Adjustments to reconcile net loss to net cash used by operating activities:
Stock based compensation		8,181
Stock based compensation - related party		31,666
Gain on forgiveness of debt	19,434
Contributed services	23,400	46,800
Changes in Operating Assets and Liabilities:
Accounts receivable	(1,128)	(35,025)
Prepaids & other assets	16,584	31,227
Accounts payable	(15,651)	32,535
Accrued expenses	2,708	4,545
Net Cash Provided by (Used in) Operating Activities	13,649	(234,723)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net Cash Used in Investing Activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from a related party	54,518	2,000
Repayment of advances from a related party	(42,700)	(2,000)
Payments on notes payable	(16,639)	(33,158)
Net Cash Provided by Financing Activities	(4,821)	(33,158)
Net Increase (decrease) in Cash	8,828	(267,881)
Cash at Beginning of Period	721	314,181
Cash at End of Period	9,549	46,300
Cash paid during the year for:
Interest
Income taxes
Supplemental non-cash disclosure:
Establish operating lease right of use asset and related liability	$ 122,825

ORGANIZATION AND DESCRIPTION OF

ORGANIZATION AND DESCRIPTION OF BUSINESS	6 Months Ended
	Jun. 30, 2019
Organization And Description Of Business
ORGANIZATION AND DESCRIPTION OF BUSINESS	NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Starco Brands, Inc. (the "Company") then operating under a different name, 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 Companies pivoted to commercializing novel consumer products manufactured by The Starco Group. The Starco Group is a private label and branded aerosol and liquid fill 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, spirits and wine.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2019
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 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, 2019. 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, 2018. 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. Actual results may differ from those estimates. Reclassifications Certain reclassifications have been made to the prior period financial information to conform to the presentation used in the financial statements for the six months ended June 30, 2019. Recently issued accounting pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) 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. The Company is also evaluating the potential impact of new standards that have been issued but are not yet effective.

GOING CONCERN

GOING CONCERN	6 Months Ended
	Jun. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
GOING CONCERN	NOTE 3 – GOING CONCERN The accompanying unaudited condensed 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 $16,572,040, due in part from the Company granting stock for services during its reorganization in 2017 and 2018, at June 30, 2019, had a net loss of $31,698 and net cash provided by operating activities of $13,649 for the six months ended June 30, 2019. 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.

ACCOUNTS PAYABLE

ACCOUNTS PAYABLE	6 Months Ended
	Jun. 30, 2019
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. June 30, 2019 December 31, 2018 Chargeback $ 3,075 $ 3,075 Aged payables 45,023 45,023 Other vendor payables 127,638 123,856 $ 175,736 $ 171,954

NOTES PAYABLE

NOTES PAYABLE	6 Months Ended
	Jun. 30, 2019
Notes to Financial Statements
NOTES PAYABLE	NOTE 5 – NOTES PAYABLE The Company had two financing loans for its Director and Officer Insurance, both of which expired in the third quarter of 2018 and were replaced with a new single loan. As of June 30, 2019, and December 31, 2018 the loan(s) had a balance of $6,792 and $26,731, respectively. The new loan bears interest at 6.97% and is due within one year. During the fourth quarter of 2018 a third party loaned the Company $3,300 to pay for general operating expenses. The loan is unsecured, non-interest bearing and due on demand.

COMMITMENTS & CONTINGENCIES

COMMITMENTS & CONTINGENCIES	6 Months Ended
	Jun. 30, 2019
Notes to Financial Statements
COMMITMENTS & CONTINGENCIES	NOTE 6 – COMMITMENTS & CONTINGENCIES The Company currently occupies office space in Burbank, California. The Company signed a three-year lease starting January 1, 2016. The lease has been extended for an additional three-year term. Current monthly lease payments are $3,742 with yearly increases. The lease required a deposit of $3,500 which was paid on December 10, 2015. The lease is being accounted for under ASU 2016-02 Leases (Topic 842). The company recorded an initial Right of Use of Asset and Lease Obligation of $122,825. As of June 30, 2019, the Company has accrued rent due of $17,910 and a Lease Obligation of $104,995. 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.

COMMON STOCK

COMMON STOCK	6 Months Ended
	Jun. 30, 2019
Notes to Financial Statements
COMMON STOCK	NOTE 7 – COMMON STOCK On April 29, 2019, the Board, cancelled 312,500 shares of common stock previously issued for services. The shares were cancelled for non-performance as permitted per the terms of the original service agreement. As of June 30, 2019, the shares have not yet been cancelled by the transfer agent and remain outstanding.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	6 Months Ended
	Jun. 30, 2019
Notes to Financial Statements
RELATED PARTY TRANSACTIONS	NOTE 8 – 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 June 30, 2019, 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. In addition, the Company owes TSG an additional $22,500 for expenses paid on behalf of the Company or funds advanced to the Company to pay for other operating expenses. During the three and six months ended June 30, 2019, the Company recognized royalty income of $117,486 and $178,749, respectively and had a $18,632 receivable from The Starco Group.

STOCK WARRANTS

STOCK WARRANTS	6 Months Ended
	Jun. 30, 2019
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, 2017 2,000,000 $ 1.05 $ 0.003 Issued - $ - $ - Exercised - $ - $ - Cancelled - $ - $ - Expired - $ - $ - Outstanding, December 31, 2018 2,000,000 $ 1.05 $ 0.003 Issued - $ - $ - Exercised - $ - $ - Cancelled - $ - $ - Expired - $ - $ - Outstanding, June 30, 2019 2,000,000 $ 1.05 $ 0.003 Exercisable, June 30, 2019 2,000,000 $ 1.05 $ 0.003

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	6 Months Ended
	Jun. 30, 2019
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.

SUMMARY OF SIGNIFICANT ACCOUN_2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2019
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 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, 2019. 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, 2018.
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. Actual results may differ from those estimates.
Reclassifications	Reclassifications Certain reclassifications have been made to the prior period financial information to conform to the presentation used in the financial statements for the six months ended June 30, 2019.
Recently issued accounting pronouncements	Recently issued accounting pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) 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. The Company is also evaluating the potential impact of new standards that have been issued but are not yet effective.

ACCOUNTS PAYABLE (Tables)

ACCOUNTS PAYABLE (Tables)	6 Months Ended
	Jun. 30, 2019
Payables and Accruals [Abstract]
Schedule of Account Payable	June 30, 2019 December 31, 2018 Chargeback $ 3,075 $ 3,075 Aged payables 45,023 45,023 Other vendor payables 127,638 123,856 $ 175,736 $ 171,954

STOCK WARRANTS (Tables)

STOCK WARRANTS (Tables)	6 Months Ended
	Jun. 30, 2019
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, 2017 2,000,000 $ 1.05 $ 0.003 Issued - $ - $ - Exercised - $ - $ - Cancelled - $ - $ - Expired - $ - $ - Outstanding, December 31, 2018 2,000,000 $ 1.05 $ 0.003 Issued - $ - $ - Exercised - $ - $ - Cancelled - $ - $ - Expired - $ - $ - Outstanding, June 30, 2019 2,000,000 $ 1.05 $ 0.003 Exercisable, June 30, 2019 2,000,000 $ 1.05 $ 0.003

GOING CONCERN (Details Narrativ

GOING CONCERN (Details Narrative) - USD ($)	3 Months Ended				6 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Going Concern
Accumulated Deficit	$ 16,572,040				$ 16,572,040		$ 16,540,342
Net Loss	$ (13,593)	$ 45,291	$ 106,624	$ 248,028	31,698	$ 354,652
Net Cash (Used) in Operating Activities					$ 13,649	$ (234,723)

ACCOUNTS PAYABLE (Details)

ACCOUNTS PAYABLE (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Payables and Accruals [Abstract]
Chargeback	$ 3,075	$ 3,075
Aged payables	45,023	45,023
Other vendor payables	127,638	123,856
Account Payable	$ 175,736	$ 171,954

COMMITMENTS & CONTINGENCIES (De

COMMITMENTS & CONTINGENCIES (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2019	Dec. 10, 2015
Commitments Contingencies
Current Lease payment	$ 3,742
Lease required a deposit		$ 3,500
Accured Rent	17,910
Lease Obligation	$ 104,995

COMMON STOCK (Details Narrative

COMMON STOCK (Details Narrative) - shares	Apr. 29, 2019	Mar. 31, 2018
Common Stock
Shares Cancelled for Non-performance of Serivces	312,500	30,300,000

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	Feb. 26, 2018	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
General Operating Expenses		$ 65,858	$ 66,489	$ 101,154	$ 147,973
Common Shares Issued	117,282,442	159,090,914		159,090,914		159,090,914
Common Share, per price	$ 0.00027	$ 0.001		$ 0.001		$ 0.001
Non Cash Expenses	$ 31,666
Account Receivable		$ 18,632		$ 18,632
Chairman And Former CEO [Member]
General Operating Expenses					$ 289,821
The Starco Group [Member]
Royalty Revenue		$ 117,486		$ 178,749

STOCK WARRANTS (Details)

STOCK WARRANTS (Details) - $ / shares	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Shares
Exercisable-end of period (in shares)	2,000,000
Weighted Average Exercise Price
Exercisable-end of period (in dollars per share)	$ 1.05
Stock Warrants [Member]
Shares
Outstanding-beginning of period (in shares)	2,000,000	2,000,000
Issued
Exercised
Forfieted
Expired
Outstanding-end of period (in shares)	2,000,000	2,000,000
Weighted Average Exercise Price
Outstanding-beginning of period (in dollars per share)	$ 1.05	$ 1.05
Issued
Exercised
Forfieted
Expired
Outstanding-end of period (in dollars per share)	1.05	1.05
Weighted Average Fair Value
Outstanding-beginning of period (in dollars per share)	.003	.003
Issued
Exercised
Forfeited
Outstanding-end of period (in dollars per share)	$ .003	$ .003