| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A summary of the significant accounting
policies applied in the preparation of the accompanying financial statements follows. BASIS OF PRESENTATION The financial statements of the Company
have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented
in US dollars. The Company's year-end is June 30. ESTIMATES The preparation of the financial statement
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 period. Actual results could differ from those estimates. CASH AND CASH EQUIVALENTS The Company maintains a cash balance in
a non-interest-bearing account that currently does not exceed federally insured limits. For the purpose of the statements of cash
flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. There
were no cash equivalents as of December 31, 2018 or 2017. CUSTOMER AND PURCHASE CONCENTRATION During the Six months ended December 31,
2018 and 2017, the following customers represented more than 10% of the Company’s sales.
December 31, 2018 December 31, 2017
$ % $ %
Total licensing revenue - - 4,500 4.9
Total royalties 11,722 77 - -
Total product revenue * 3,526 23 85,100 95.1
Total revenue 15,248 100 89,600 100
Total licensing revenue
Customer A 3,376 22 4,500 4.9
Customer B 150 1 -
Customer D - - 31,600 35.3
Customer E - - 53,500 59.8
Customer F 11,722 77 - -
Concentration $ 15,248 100 $ 89,600 100 During the six months ended December 31,
2018 and 2017, the following vendors represented more than 10% of the Company’s
Purchases:
December 31, 2018 December 31, 2017
High Nexus Network 3,376 22 - -
Optimized Fuel Technologies* - - 58,326 100
Total Purchases - - 58,326 100 *100% represents product purchased
from Optimized Fuel Technologies. INVENTORY Inventory is recorded at lower of cost
or market; cost is computed on a first-in first-out basis. At December 31, 2018 and June 30, 2018, we had inventory of $80,600
and $85,000 respectively, consisting of Optimized Fuel Maximizer units. FINANCIAL INSTRUMENTS Fair value measurements are determined
based on the assumptions that market participants would use in pricing an asset or liability. Accounting Standards Codification
("ASC") 820-10 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs
and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. ASC 820 establishes
a fair value hierarchy that prioritizes the use of inputs used in valuation methodologies into the following three levels: Level 1: Quoted prices (unadjusted) for
identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair
value and must be used to measure fair value whenever available. Level 2: Significant other observable inputs
other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active;
or other inputs that are observable or can be corroborated by observable market data. Level 3: Significant unobservable inputs
which reflect a reporting entity's own assumptions about the assumptions that market participants would use for pricing an asset
or liability. For example, level 3 inputs would relate to forecasts of future earnings and cash flows used in a discounted future
cash flows method. The recorded amounts of financial instruments,
comprising cash, accounts payable and income tax payable, approximate their market values as of December 31, 2018 due to the short
term maturities of these financial instruments. OTHER INTANGIBLE ASSETS Under ASC 350-50-1, costs incurred in the
acquisition of an intangible asset are capitalized by the Company. Our intangible assets are related to the acquisition of the
Licensing rights for the Optimized Fuel Maximizer which is being amortized to expense over the licensing rights estimated useful
life or period of benefit which is estimated to be 10 years using straight-line method; annual amortization will be approximately
$50,250 per year. In addition, the purchase of our Green Meadow PR formula for natural pain relief for animals is being amortized
to expense over the formula's estimated useful life or period of benefit which is estimated to be 10 years using straight-line
method. On December 31, 2018 there was a loan receivable from Optimized Fuel Technologies for $321,518 which was applied towards
the acquisition of the licensing rights for LED Lights for $500,000 leaving an accounts payable balance due to Optimized Fuel Technologies
of $178,482. As of December 31, 2018, and June 30, 2018, the balances of our intangible assets net of accumulated amortization
were $981,907 and $507,570 respectively. IMPAIRMENT OF LONG-LIVED ASSETS The Company evaluates the recoverability
of long-lived assets and intangible assets and the related estimated remaining lives at each balance sheet date. The Company records
an impairment or change in useful life whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable or the useful life has changed. During the three and six months ended December 31, 2018 there is no impairment of
long-lived assets or intangible assets. INCOME TAXES We account for income taxes in accordance
with FASB ASC 740, Income Taxes which requires the recognition of deferred tax liabilities and assets for the expected future tax
consequences of events that have been included in the financial statement or tax returns. Under this method, deferred tax liabilities
and assets are determined based on the difference between financial statements and tax basis of assets and liabilities using enacted
tax rates in effect for the year in which the differences are expected to reverse. Under FASB ASC 740, the effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance
is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through
future operations. The effect on the deferred income tax assets and liabilities of a change in tax rates is recognized in income
in the period that includes the enactment date. When tax returns are filed, it is highly
certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty
about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with ASC
740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available
evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution
of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions
that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50
percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with
tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax
benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing
authorities upon examination. REVENUE RECOGNITION Effective July
1, 2018, the Company adopted the Financial Accounting Standards Board (“FASB”) standard update ASU 2014-09, “Revenue
from Contracts with Customers,” (“Topic 606”) which provides a principles-based, five-step approach to measure
and recognize revenue from contracts with customers. Revenue is recognized when the following criteria are met:
● Identification of the contract, or contracts, with a customer ;
● Identification of the performance obligations in the contract ;
● Determination of the transaction price ;
● Allocation of the transaction price to the performance obligations in the contract ; and
●
Recognition of revenue when,
or as, we satisfy performance obligation The adoption of this guidance did not have
a material impact on the Company’s consolidated statement of operations, cash flows, and balance sheet as of the adoption
date or for the three and six months ended December 31, 2018. The Company's revenues have been generated
primarily through the sales of the Optimized Fuel Maximizer units and sublicense and distribution agreements related to our
PawPal product and our pain relief products. The terms of these agreements generally consist solely of upfront, nonrefundable payments for
licensing and distribution rights. Revenues from non-refundable licensing and distribution fees are recognized upon receipt
of the payment if the license has stand-alone value and we do not have ongoing involvement or obligations. For the three and six months ended December
31, 2018 and 2017, all sales and license payments met the above criteria or in the case of one contract, the only continuing involvement
was to sell our products to the distributor at pricing that is consistent with market transactions, thereby allowing for the recognition
of revenue for the licensing and distribution arrangements upon receipt. When non-refundable license fees do not
meet this criteria, the license revenues are recognized over the expected period of performance. We periodically review for
any expected period of substantial involvement under the agreements that provide for non-refundable up-front payments and license
fees. If ever applicable, we will adjust the amortization periods when appropriate to reflect changes in assumptions relating
to the duration of our expected involvement. TRADE RECEIVABLES Trade Receivables are the amount of billed
or unbilled claims or other similar items subject to uncertainty concerning their determination or ultimate realization under
contracts that are expected to be collected in the next rolling twelve months following the latest balance sheet presented. Our
policies on receivables varies per customer, but in no case do we allow for a receivable to be outstanding for more than 12 months.
As of December 31, 2018, we had no open trade receivables, we had royalty receivables of $11,722. In the year ended June
30, 2018, we expensed $85,100 to bad debt as uncollectable receivables. ADVERTISING COSTS The Company's policy regarding advertising
is to expense advertising when incurred. The Company incurred advertising and marketing expense of $0 for the three months and
$3,774 during the six months ended December 31, 2018 and $5,400 during the three and six months ended December 31, 2017. NET INCOME (LOSS) PER SHARE OF COMMON
STOCK The Company computes net income (loss)
per share in accordance with ASC 105, "Earnings per Share" which requires presentation of both basic and diluted earnings
per share on the face of the statement of operations. Basic income (loss) per share is computed by dividing net income (loss) available
to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives
effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential
common shares if their effect is anti-dilutive. For the six months ended December 31, 2018, 5,584,947 shares, (3,364,951 from convertible
notes and 2,219,996 from warrants), were potentially dilutive common shares and for the six months ended December 31, 2017 there
were no diluted shares. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS The
Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption
of any such pronouncements may be expected to cause a material impact on our financial condition or the results of its operations. |
