Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Mar. 27, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | Quarta-Rad, Inc. | |
Entity Central Index Key | 0001549631 | |
Document Type | 10-K | |
Document Period End Date | Dec. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Public Float | $ 7,347,356 | |
Entity Common Stock, Shares Outstanding | 15,326,150 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2019 |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Current Assets | ||
Cash | $ 41,962 | $ 87,010 |
Accounts receivable | 127,518 | 83,973 |
Inventory | 75,457 | 85,363 |
Prepaid expenses | 18,150 | |
Total Current Assets | 244,937 | 274,496 |
TOTAL ASSETS | 244,937 | 274,496 |
Current Liabilities | ||
Accounts payable and accrued expenses | 126,469 | 12,427 |
Related party payable | 148,308 | 149,849 |
Total Liabilities | 274,777 | 162,276 |
Common Stock: authorized 50,000,000 common shares, $0.0001 par value 15,326,150 were issued and outstanding on December 31, 2019 and December 31, 2018 | 1,533 | 1,533 |
Additional Paid-in Capital | 65,197 | 65,197 |
Retained Earnings/(Accumulated Deficit) | (96,570) | 45,490 |
Total Stockholders' Equity/(Deficit) | (29,840) | 112,220 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT) | $ 244,937 | $ 274,496 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares issued | 15,326,150 | 15,326,150 |
Common stock, shares outstanding | 15,326,150 | 15,326,150 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | ||
Sales, net | $ 875,345 | $ 908,355 |
Cost of goods sold | 647,190 | 674,511 |
Gross profit | 228,155 | 233,844 |
Expenses: | ||
General & administrative | 125,197 | 57,498 |
Advertising | 47,624 | 46,974 |
Professional and consulting fees | 125,394 | 132,351 |
Research and development | 72,000 | 95,076 |
Operating Expenses | 370,215 | 331,899 |
Net loss | $ (142,060) | $ (98,055) |
Loss per share - basic and diluted | $ (0.01) | $ (0.01) |
Weighted average shares - basic and diluted | 15,326,150 | 15,326,150 |
Statements of Changes in Stockh
Statements of Changes in Stockholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings (Accumulated Deficit) [Member] | Total |
Balance at Dec. 31, 2017 | $ 1,533 | $ 65,197 | $ 143,545 | $ 210,275 |
Balance, shares at Dec. 31, 2017 | 15,326,150 | |||
Net Loss | (98,055) | (98,055) | ||
Balance at Dec. 31, 2018 | $ 1,533 | 65,197 | 45,490 | 112,220 |
Balance, shares at Dec. 31, 2018 | 15,326,150 | |||
Net Loss | (142,060) | (142,060) | ||
Balance at Dec. 31, 2019 | $ 1,533 | $ 65,197 | $ (96,570) | $ (29,840) |
Balance, shares at Dec. 31, 2019 | 15,326,150 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
OPERATING ACTIVITIES: | ||
Net loss | $ (142,060) | $ (98,055) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (43,545) | (46,087) |
Inventory | 9,906 | 78,777 |
Prepaid expenses | 18,150 | (18,150) |
Accounts payable and accrued expenses | 114,042 | (12,536) |
Related party payable | (1,541) | 105,182 |
Net cashed (used in) provided by operating activities | (45,048) | 9,131 |
FINANCING ACTIVITIES: | ||
Proceeds from subscriptions receivable | ||
Net cash provided by Financing Activities | ||
Net change in cash | (45,048) | 9,131 |
Cash, beginning of period | 87,010 | 77,879 |
Cash, end of period | 41,962 | 87,010 |
Supplemental cash flow information: | ||
Cash paid on interest | ||
Cash paid for income taxes |
Nature of Business
Nature of Business | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | NOTE 1 - NATURE OF BUSINESS Quarta-Rad, Inc. (the “Company”) was incorporated under the laws of the state of Delaware on November 29, 2011, under the name Quatra-Rad, Inc. and amended its Certificate of Incorporation on February 29, 2012 to change its name to Quarta-Rad, Inc. On July 2, 2012, the Company amended and restated its Certificate of Incorporation to increase its authorized shares of common stock to 50,000,000, $0.0001 par value from 1,500, no par value and effected a 10,000 to 1 forward split. The Company distributes detection devices, including but not limited to Geiger counters, to homeowners and interested customers in North America, Europe, and Asia. The Company targets homebuilders and home renovation contractors. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States and are expressed in United States (US) dollar. The Company’s financial statements are prepared using the accrual method of accounting. The Company has elected a December 31 fiscal year end. Cash and Cash Equivalents The Company considers all highly liquid investments with maturity of three months or less when purchased to be cash equivalents. The Company does not have any cash equivalents as of December 31, 2019 and 2018. Use of Estimates and Assumptions The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and judgments that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting periods. Significant estimates made by management include, among others, provisions for the valuation of accounts receivable, accrual of European VAT reserve, and the recoverability of inventory. The Company bases its estimates on historical experience, knowledge of current conditions and belief of what could occur in the future considering available information. The Company reviews its estimates on an on-going basis. The actual results experienced by the Company may differ materially and adversely from its estimates. To the extent there are material differences between the estimates and actual results, future results of operations will be affected. Advertising The Company expenses advertising costs, consisting primarily of placement in multiple publications, along with design and printing costs of sales materials, when incurred. Advertising expense for the years ended December 31, 2019 and 2018 amounted to $47,624 and $46,974, respectively. Income Taxes The Company uses the asset and liability method of accounting for income taxes in accordance with ASC 740-10, “Accounting for Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year; and, (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if, based on the weight of available positive and negative evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. ASC 740-10 prescribes a recognition threshold and measurement attribute for the financial statement recognition of a tax position taken or expected to be taken on a tax return. Under ASC 740-10, a tax benefit from an uncertain tax position taken or expected to be taken may be recognized only if it is “more likely than not” that the position is sustainable upon examination, based on its technical merits. The tax benefit of a qualifying position under ASC 740-10 would equal the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with a taxing authority having full knowledge of all the relevant information. A liability (including interest and penalties, if applicable) is established to the extent a current benefit has been recognized on a tax return for matters that are considered contingent upon the outcome of an uncertain tax position. Related interest and penalties, if any, are included as components of income tax expense and income taxes payable. As of December 31, 2019, we have analyzed filing positions in each of the federal and state jurisdictions where we are required to file income tax returns, as well as all open tax years in these jurisdictions. We have identified the U.S. federal and Delaware as our “major” tax jurisdictions. Generally, we remain subject to Internal Revenue Service examination of our 2014 through 2019 Delaware Tax Returns. However, we have certain tax attribute carry forwards, which will remain subject to review and adjustment by the relevant tax authorities until the statute of limitations closes with respect to the year in which such attributes are utilized. We believe that our income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change to our financial position. Therefore, no reserves for uncertain income tax position have been recorded pursuant to ASC 740. In addition, we did not record a cumulative effect adjustment related to the adoption of ASC 740. Related interest and penalties, if any, are included as components of income tax expense and income taxes payable. Inventory Accounting Policy Inventories are stated at the lower of cost or market (net realizable value). The Company periodically reviews the value of items in inventory and provides write-downs or write-offs of inventory based on its assessment of market conditions. Write-downs and write-offs are charged to cost of goods sold. The Company’s inventory consists entirely of finished goods available for sale. Earnings per Share The Company’s basic earnings per share are calculated by dividing its net income available to common stockholders by the weighted average number of common shares outstanding for the period. The Company’s dilutive earnings per share is calculated by dividing its net income available to common shareholders by the diluted weighted average number of shares outstanding during the period. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. Fair Value of Financial Instruments The Company’s financial instruments as defined by ASC 825, “Financial Instruments” FASB ASC 820 “Fair Value Measurements and Disclosures” ● 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; and ● Level 3. Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions. Revenue Recognition On January 1, 2018, we adopted FASB Accounting Standards Codification ASC Topic 606, Revenue from Contracts with Customers . We reviewed all contracts at the date of initial application and elected to use the modified retrospective transition method, where the cumulative effect of the initial application is recognized as an adjustment to opening retained earnings at January 1, 2018. The adoption of the new revenue recognition guidance was immaterial to our consolidated statements of operations, balance sheet, and cash flows as of December 31, 2019 and 2018 and for the years ended December 31, 2019 and December 31, 2018 and no adjustments were required. Our principal activities from which we generate our revenue are product sales. Revenue is measured based on consideration specified in a contract with a customer. A contract with a customer exists when we enter into an enforceable contract with a customer. The contract is based on either the acceptance of standard terms and conditions on the websites for e-commerce customers and via telephone with our third-party call center for our print media and direct mail customers, or the execution of terms and conditions contracts with retailers and wholesalers. These contracts define each party’s rights, payment terms and other contractual terms and conditions of the sale. Consideration is typically paid prior to shipment via credit card or check when our products are sold direct to consumers or approximately 30 days from the time control is transferred when sold to wholesalers, distributors and retailers. We apply judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience and, in some circumstances, published credit and financial information pertaining to the customer. A performance obligation is a promise in a contract to transfer a distinct product to the customer. Performance obligations promised in a contract are identified based on the goods that will be transferred to the customer that are both capable of being distinct and are distinct in the context of the contract, whereby the transfer of the goods is separately identifiable from other promises in the contract. We have concluded the sale of goods and related shipping and handling are accounted for as the single performance obligation. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the customer receives the benefit of the performance obligation. The transaction price is determined based on the consideration to which we will be entitled to receive in exchange for transferring goods to the customer. We issue refunds to e-commerce and print media customers, upon request, within 30 days of delivery. We estimate the amount of potential refunds at each reporting period using a portfolio approach of historical data, adjusted for changes in expected customer experience, including seasonality and changes in economic factors. For retailers, distributors and wholesalers, we do not offer a right of return or refund and revenue is recognized at the time products are shipped to customers. In all cases, judgment is required in estimating these reserves. Actual claims for returns could be materially different from the estimates. There was no reserve for sales returns and allowances, at December 31, 2019 and December 31, 2018, respectively. We recognize revenue when we satisfy a performance obligation in a contract by transferring control over a product to a customer when product is shipped. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by us from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of product sales. Recent Accounting Pronouncements In June 2018, the FASB issued ASU 2018-07 Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting. In February 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-02, Income Statement Reporting, Comprehensive Income (Topic 220) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Leases |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 3–INCOME TAXES The Company is subject to taxation in the United States and California. The benefit from income taxes for the years ended December 31, 2019 and 2018 are summarized below: 2019 2018 Current: Federal $ - $ - State - - Total current - - Deferred: Federal (29,833 ) (20,592 ) State - - Change in valuation allowance 29,833 20,592 Total deferred - - Income tax provision (benefit) $ - $ - At December 31, 2019, the Company had federal net operating loss carry forwards of approximately $106,000 which may be offset against future taxable income through 2037. No net deferred tax assets are recorded at December 31, 2019 or 2018, as all deferred tax assets and liabilities have been fully offset by a valuation allowance due to the uncertainty of future utilization. At December 31, 2019 and 2018, deferred tax assets consist of the following: 2019 2018 Net operating loss carry-forwards $ 55,952 $ 26,119 Other - - Total deferred tax assets 55,952 26,119 Less: valuation allowance (55,952 ) (26,119 ) Net deferred tax assets $ - $ - The change in the valuation allowance during the years ended December 31, 2019 and 2018 was an approximate $30,000 increase and an approximate $21,000 increase, respectively, and a full valuation allowance has been recorded since, in the judgement of management, these net deferred tax assets are not more likely than not to be realized. The ultimate realization of deferred tax assets and liabilities is dependent upon the generation of future taxable income during periods in which those temporary differences and carryforwards become deductible or are utilized. A reconciliation of the statutory federal income tax rate for the year ended December 31, 2019 and 2018 to the effective tax rate is as follows: 2019 2018 Expected federal tax 21.00 % 21.00 % Valuation allowance (21.00 )% (21.00 )% Total - % - % The Company follows ASC 740-10, Uncertainty in Income Taxes. The Company recognizes interest and penalties associated with uncertain tax positions as a component of income tax expense. The Company does not have any unrecognized tax benefits or a liability for uncertain tax positions at December 31, 2019 and 2018. The Company does not expect to have any unrecognized tax benefits within the next twelve months. The Company recognizes accrued interest and penalties associated with uncertain tax positions, if any, as part of income tax expense. There were no tax related interest and penalties recorded for 2019 and 2018. Since the Company incurred net operating losses in every tax year since inception, all of its income tax returns are subject to examination and adjustments by the IRS for at least three years following the year in which the tax attributes are utilized. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 4–STOCKHOLDERS’ EQUITY The Company was formed with one class of no par value common stock and was authorized to issue 50,000,000 common shares, as amended. Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they chose to do so, elect all of the directors of the Company. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 5–RELATED PARTY TRANSACTIONS The Company sells radiation monitors and to date has purchased all of it inventory from a company in Russia, which is owned by the Company’s minority shareholder. Total inventory purchased was $518,750 and $452,091 for 2019 and 2018, respectively. The Company owes the Russian affiliate $126,390 and $89,625 and such amount is included in related party payables in the accompanying balance sheet at December 31, 2019 and 2018, respectively. The related payable balance is related to a research and development contract entered into by the parties noted below and inventory purchases. During July 2017 the Company entered into an agreement with the Russian Affiliate to develop and update software for a new device for $180,000. The development contract goes through December 31, 2019. The amount due in connection with this agreement as of December 31, 2019 is $117,076. Since inception, the Company has not compensated its CEO, who is the majority shareholder, and, as of December 31, 2019 and 2018, is due $21,918 and $60,225, respectively, for expenses paid on behalf of the Company. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 6– COMMITMENTS AND CONTINGENCIES Contingencies The Company is currently undergoing a multi-year VAT tax examination by certain European tax authorities. As of December 31, 2019, the outcome of these examinations is uncertain and the Company is disputing any amounts due. The estimated liabilities on the VAT tax exposure could anywhere from $0 to $125,000 based on estimates and information provided to management. The Company believes its exposure is limited and has accrued $100,000, which is included in accounts payable and accrued expenses, as of December 31, 2019. Actual results from this matter could differ from this estimate. Legal In the normal course of business, the Company may become involved in various legal proceedings. The Company knows of no pending or threatened legal proceeding to which the Company is or will be a party that, if successful, might result in material adverse change in the Company’s business, properties or financial condition. Going Concern The Company’s financial statements are prepared using U.S. GAAP applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. While the Company has established sources of capital to cover its operating costs, it incurred a loss in 2019 and cannot support a salary for its CEO, which causes substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to implement its business plan. If the Company is unable to obtain adequate capital, it could be forced to cease operations. Management intends to focus on raising funds going forward. The Company cannot provide any assurance or guarantee that it will be able to raise funds. Potential investors must be aware if it is unable to raise funds through the sale of its common stock and generate sufficient revenues, any investment made into the Company could be lost in its entirety. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 7–SUBSEQUENT EVENTS The Company has performed an evaluation of events occurring subsequent to December 31, 2019 through March 27, 2020. Based on its evaluation, there is nothing to be disclosed herein. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States and are expressed in United States (US) dollar. The Company’s financial statements are prepared using the accrual method of accounting. The Company has elected a December 31 fiscal year end. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with maturity of three months or less when purchased to be cash equivalents. The Company does not have any cash equivalents as of December 31, 2019 and 2018. |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and judgments that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting periods. Significant estimates made by management include, among others, provisions for the valuation of accounts receivable, accrual of European VAT reserve, and the recoverability of inventory. The Company bases its estimates on historical experience, knowledge of current conditions and belief of what could occur in the future considering available information. The Company reviews its estimates on an on-going basis. The actual results experienced by the Company may differ materially and adversely from its estimates. To the extent there are material differences between the estimates and actual results, future results of operations will be affected. |
Advertising | Advertising The Company expenses advertising costs, consisting primarily of placement in multiple publications, along with design and printing costs of sales materials, when incurred. Advertising expense for the years ended December 31, 2019 and 2018 amounted to $47,624 and $46,974, respectively. |
Income Taxes | Income Taxes The Company uses the asset and liability method of accounting for income taxes in accordance with ASC 740-10, “Accounting for Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year; and, (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if, based on the weight of available positive and negative evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. ASC 740-10 prescribes a recognition threshold and measurement attribute for the financial statement recognition of a tax position taken or expected to be taken on a tax return. Under ASC 740-10, a tax benefit from an uncertain tax position taken or expected to be taken may be recognized only if it is “more likely than not” that the position is sustainable upon examination, based on its technical merits. The tax benefit of a qualifying position under ASC 740-10 would equal the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with a taxing authority having full knowledge of all the relevant information. A liability (including interest and penalties, if applicable) is established to the extent a current benefit has been recognized on a tax return for matters that are considered contingent upon the outcome of an uncertain tax position. Related interest and penalties, if any, are included as components of income tax expense and income taxes payable. As of December 31, 2019, we have analyzed filing positions in each of the federal and state jurisdictions where we are required to file income tax returns, as well as all open tax years in these jurisdictions. We have identified the U.S. federal and Delaware as our “major” tax jurisdictions. Generally, we remain subject to Internal Revenue Service examination of our 2014 through 2019 Delaware Tax Returns. However, we have certain tax attribute carry forwards, which will remain subject to review and adjustment by the relevant tax authorities until the statute of limitations closes with respect to the year in which such attributes are utilized. We believe that our income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change to our financial position. Therefore, no reserves for uncertain income tax position have been recorded pursuant to ASC 740. In addition, we did not record a cumulative effect adjustment related to the adoption of ASC 740. Related interest and penalties, if any, are included as components of income tax expense and income taxes payable. |
Inventory Accounting Policy | Inventory Accounting Policy Inventories are stated at the lower of cost or market (net realizable value). The Company periodically reviews the value of items in inventory and provides write-downs or write-offs of inventory based on its assessment of market conditions. Write-downs and write-offs are charged to cost of goods sold. The Company’s inventory consists entirely of finished goods available for sale. |
Earnings Per Share | Earnings per Share The Company’s basic earnings per share are calculated by dividing its net income available to common stockholders by the weighted average number of common shares outstanding for the period. The Company’s dilutive earnings per share is calculated by dividing its net income available to common shareholders by the diluted weighted average number of shares outstanding during the period. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments as defined by ASC 825, “Financial Instruments” FASB ASC 820 “Fair Value Measurements and Disclosures” ● 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; and ● Level 3. Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions. |
Revenue Recognition | Revenue Recognition On January 1, 2018, we adopted FASB Accounting Standards Codification ASC Topic 606, Revenue from Contracts with Customers . We reviewed all contracts at the date of initial application and elected to use the modified retrospective transition method, where the cumulative effect of the initial application is recognized as an adjustment to opening retained earnings at January 1, 2018. The adoption of the new revenue recognition guidance was immaterial to our consolidated statements of operations, balance sheet, and cash flows as of December 31, 2019 and 2018 and for the years ended December 31, 2019 and December 31, 2018 and no adjustments were required. Our principal activities from which we generate our revenue are product sales. Revenue is measured based on consideration specified in a contract with a customer. A contract with a customer exists when we enter into an enforceable contract with a customer. The contract is based on either the acceptance of standard terms and conditions on the websites for e-commerce customers and via telephone with our third-party call center for our print media and direct mail customers, or the execution of terms and conditions contracts with retailers and wholesalers. These contracts define each party’s rights, payment terms and other contractual terms and conditions of the sale. Consideration is typically paid prior to shipment via credit card or check when our products are sold direct to consumers or approximately 30 days from the time control is transferred when sold to wholesalers, distributors and retailers. We apply judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience and, in some circumstances, published credit and financial information pertaining to the customer. A performance obligation is a promise in a contract to transfer a distinct product to the customer. Performance obligations promised in a contract are identified based on the goods that will be transferred to the customer that are both capable of being distinct and are distinct in the context of the contract, whereby the transfer of the goods is separately identifiable from other promises in the contract. We have concluded the sale of goods and related shipping and handling are accounted for as the single performance obligation. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the customer receives the benefit of the performance obligation. The transaction price is determined based on the consideration to which we will be entitled to receive in exchange for transferring goods to the customer. We issue refunds to e-commerce and print media customers, upon request, within 30 days of delivery. We estimate the amount of potential refunds at each reporting period using a portfolio approach of historical data, adjusted for changes in expected customer experience, including seasonality and changes in economic factors. For retailers, distributors and wholesalers, we do not offer a right of return or refund and revenue is recognized at the time products are shipped to customers. In all cases, judgment is required in estimating these reserves. Actual claims for returns could be materially different from the estimates. There was no reserve for sales returns and allowances, at December 31, 2019 and December 31, 2018, respectively. We recognize revenue when we satisfy a performance obligation in a contract by transferring control over a product to a customer when product is shipped. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by us from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of product sales. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2018, the FASB issued ASU 2018-07 Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting. In February 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-02, Income Statement Reporting, Comprehensive Income (Topic 220) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Leases |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Provision (Benefit) | The Company is subject to taxation in the United States and California. The benefit from income taxes for the years ended December 31, 2019 and 2018 are summarized below: 2019 2018 Current: Federal $ - $ - State - - Total current - - Deferred: Federal (29,833 ) (20,592 ) State - - Change in valuation allowance 29,833 20,592 Total deferred - - Income tax provision (benefit) $ - $ - |
Schedule of Deferred Tax Assets Liabilities | At December 31, 2019 and 2018, deferred tax assets consist of the following: 2019 2018 Net operating loss carry-forwards $ 55,952 $ 26,119 Other - - Total deferred tax assets 55,952 26,119 Less: valuation allowance (55,952 ) (26,119 ) Net deferred tax assets $ - $ - |
Schedule of Statutory Federal Income Tax Rate Reconciliation | A reconciliation of the statutory federal income tax rate for the year ended December 31, 2019 and 2018 to the effective tax rate is as follows: 2019 2018 Expected federal tax 21.00 % 21.00 % Valuation allowance (21.00 )% (21.00 )% Total - % - % |
Nature of Business (Details Nar
Nature of Business (Details Narrative) - $ / shares | Jul. 02, 2012 | Dec. 31, 2019 | Dec. 31, 2018 |
Common stock, shares authorized | 50,000,000 | 50,000,000 | |
Common stock, par value | $ 0.0001 | $ 0.0001 | |
Amended and Restated [Member] | |||
Common stock, shares authorized | 1,500 | ||
Common stock, no par value | |||
Stock reverse split | 10,000 to 1 forward split | ||
Amended and Restated [Member] | Maximum [Member] | |||
Common stock, shares authorized | 50,000,000 | ||
Common stock, par value | $ 0.0001 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||
Advertising expense | $ 47,624 | $ 46,974 |
Tax benefit realized upon settlement description | greater than 50% | |
Reserve for sales returns and allowances |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Operating loss carry forwards, net | $ 106,000 | |
Operating loss carry forwards expiration date | through 2037 | |
Deferred tax assets | ||
Change in valuation allowance | 30,000 | 21,000 |
Unrecognized tax benefits | ||
Income tax interest and penalties |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Provision (Benefit) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Current Federal | ||
Current State | ||
Total current | ||
Deferred Federal | (29,833) | (20,592) |
Deferred State | ||
Deferred Change in valuation allowance | 29,833 | 20,592 |
Total deferred | ||
Income tax provision (benefit) |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets Liabilities (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry-forwards | $ 55,952 | $ 26,119 |
Other | ||
Total deferred tax assets | 55,952 | 26,119 |
Less: valuation allowance | (55,952) | (26,119) |
Net deferred tax assets |
Income Taxes - Schedule of Stat
Income Taxes - Schedule of Statutory Federal Income Tax Rate Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Expected federal tax | 21.00% | 21.00% |
Valuation allowance | (21.00%) | (21.00%) |
Total |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, voting rights | Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they chose to do so, elect all of the directors of the Company. | |
Common Stock [Member] | ||
Common stock, no par value | ||
Common stock, shares authorized | 50,000,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Jul. 31, 2017 | |
Inventory purchased | $ 518,750 | $ 452,091 | |
Due to majority shareholder | 21,918 | 60,225 | |
Russian Affiliate [Member] | |||
Related party payable | 126,390 | $ 89,625 | |
Russian Affiliate [Member] | Software Development [Member] | |||
Related party payable | $ 117,076 | $ 180,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Accounts payable and accrued expenses | $ 100,000 |
Minimum [Member] | |
Estimated liabilities on VAT | 0 |
Maximum [Member] | |
Estimated liabilities on VAT | $ 125,000 |