Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Feb. 17, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | PETROGRESS, INC. | |
Entity Central Index Key | 1,558,465 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
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? | No | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 166,795,087 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,016 |
CONDENSED BALANCE SHEETS (Unaud
CONDENSED BALANCE SHEETS (Unaudited) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Cash and cash equivalents | $ 139,717 | $ 1,882,305 |
Accounts receivable, including related parties of $78,375 (2016) | 2,534,327 | 2,650,171 |
Prepaid expenses, including officer of $395,009 (2016) and $331,877 (2015) | 1,357,786 | 1,209,960 |
Marketable securities | 4,140 | |
Security deposits | 8,775 | |
Total current assets | 4,044,745 | 5,742,436 |
Property and equipment, net | 6,088,424 | 6,144,000 |
Total Assets | 10,133,169 | 11,886,436 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 313,222 | 809,473 |
Due to officer | 136,600 | |
Convertible promissory note | 44,887 | |
Derivative liability | 68,154 | |
Total current liabilities | 562,863 | 809,473 |
Commitments and Contingencies | ||
Stockholders' Equity: | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized, none issued | ||
Common stock, $0.001 par value; 490,000,000 shares authorized; 166,795,807 (2016) and 136,000,000 (2015) shares issued and outstanding | 166,796 | 136,000 |
Additional paid-in capital | 8,423,641 | 8,666,838 |
Accumulated comprehensive loss | (1,140) | |
Retained earnings | 981,009 | 2,274,125 |
Total stockholders' equity | 9,570,306 | 11,076,963 |
Total liabilities and stockholders' equity | $ 10,133,169 | $ 11,886,436 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, related parties portion | $ 78,375 | |
Prepaid expenses, officer portion | $ 395,009 | $ 331,877 |
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred Stock, shares issued | ||
Preferred Stock, shares outstanding | ||
Common Stock, par value | $ 0.001 | |
Common Stock, shares authorized | 490,000,000 | 490,000,000 |
Common Stock, shares issued | 166,795,807 | 136,000,000 |
Common Stock, shares outstanding | 166,795,807 | 136,000,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||||
Revenues | $ 3,939,605 | $ 4,230,069 | $ 15,086,277 | $ 15,483,100 |
Cost of goods sold | 2,750,425 | 3,146,885 | 10,687,597 | 11,184,894 |
Gross profit | 1,189,180 | 1,083,184 | 4,398,680 | 4,298,206 |
Operating expenses: | ||||
Operating Costs | 524,520 | 835,127 | 2,132,373 | 2,314,257 |
Administration Costs | 757,353 | 261,964 | 1,240,102 | 622,074 |
Depreciation | 170,882 | 165,875 | 505,759 | 497,625 |
Total operating expenses | 1,452,756 | 1,262,966 | 3,878,235 | 3,433,956 |
Operating income (loss) before other expenses and income taxes | (263,576) | (179,782) | 520,445 | 864,250 |
Other income (expense): | ||||
Interest expense | (29,294) | (48,974) | ||
Change in fair market value of derivative liabilities | 49,768 | 149,514 | ||
Total other income, net | 20,474 | 100,540 | ||
Income (loss) before income taxes | (243,102) | (179,782) | 620,985 | 864,250 |
Income tax expense | 8,900 | 18,400 | 43,600 | 88,900 |
Net Income (loss) | (252,002) | (198,182) | 577,385 | 775,350 |
Other Comprehensive loss, net of tax: | ||||
Unrealized loss on marketable securities | (2,280) | (1,140) | ||
Comprehensive gain (loss) | $ (254,282) | $ (198,182) | $ 576,245 | $ 775,350 |
Net income (loss) per share | $ 0 | $ 0 | $ 0 | $ 0.01 |
Weighted average number of common shares outstanding - Basic and diluted | 166,795,807 | 136,000,000 | 159,068,969 | 136,000,000 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash Flows from operating activities: | ||
Net income | $ 577,385 | $ 775,350 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation | 505,759 | 497,625 |
Amortization of discount on convertible note | 35,006 | |
Non cash interest expense | 13,968 | |
Net cash acquired in recapitalization | 517 | |
Change in fair value of derivative liabilities | (149,514) | |
Change in operating assets and liabilities: | ||
Increase in accounts receivable | (81,720) | (865,662) |
Increase in prepaid assets | (147,827) | (525,872) |
Decrease in amounts due from related parties | 253,142 | |
Decrease in accounts payable and accrued expenses | (557,749) | (77,762) |
Increase in due to officer | 66,600 | |
Net cash provided by (used in) operating activities | 515,567 | (196,321) |
Cash flows from investing activities: | ||
Purchase of property, plant and equipment | (449,380) | |
Payment of security deposits | (8,775) | |
Net cash used in investing activities | (458,155) | |
Cash flows from financing activities: | ||
Dividends paid | (1,800,000) | |
Net cash provided by financing activities | (1,800,000) | |
Net decrease in cash and cash equivalents | (1,742,588) | (196,321) |
Cash and cash equivalents, Beginning | 1,882,305 | 526,656 |
Cash and cash equivalents, Ending | 139,717 | 330,335 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | ||
Cash paid for income taxes | ||
Schedule of non-cash investing and financing activities | ||
Reclassification of derivative liability upon repayment of convertible debt | 82,651 | |
Common stock issued for conversion of notes and interest payable | 24,732 | |
Change in fair value for available for sale marketable securities | $ 1,140 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Note 1 - Organization Petrogress, Inc. (the Company or Petrogress) was originally formed in the State of Florida under the name 800 Commerce, Inc. (800 Commerce) on February 10, 2010. The Company was founded for the purpose of marketing credit card processing services on behalf of merchant payment processing service providers. On February 29, 2016, 800 Commerce entered into a Securities Exchange Agreement (the SEA) with an unrelated third party, Petrogres Co. Limited (Petrogres), a Marshall Islands corporation, and its sole shareholder. The Company acquired 100% of Petrogres and its affiliated companies. As consideration for the acquisition of Petrogres, the Company issued 136,000,000 shares of its common stock, in restricted form, representing 85% of the issued and outstanding shares of the Companys common stock at closing of the transaction. The SEA has been accounted for as a reverse acquisition and recapitalization of the Company whereby Petrogres is deemed to be the accounting acquirer (legal acquiree) and the Company to be the accounting acquiree (legal acquirer). The accompanying consolidated financial statements are in substance those of Petrogres and its subsidiaries, with the assets and liabilities, and revenues and expenses, of the Company being included effective from the date of stock exchange transaction. The Company is deemed to be a continuation of the business of Petrogres and its subsidiaries. Accordingly, the financial position, results of operations, and cash flows of the Petrogres (accounting acquirer) for all periods presented as if the recapitalization had occurred at the beginning of the earliest period presented and the operations of the accounting acquiree from the date of stock exchange transaction. As part of the transaction, the sole shareholder and CEO of Petrogres, Christos Traios, was appointed to the Board of Directors and B. Michael Friedman resigned as an officer and director. In addition, the Companys Board of Directors (the Board) approved an amendment to the Companys Articles of Incorporation, increasing the authorized capital to 490,000,000 shares of common stock, par value $0.001 and 10,000,000 shares of preferred stock, par value $0.001. On March 9, 2016, the Companys Board approved an amendment to the Companys Articles of Incorporation to change the name of the Corporation to Petrogress, Inc. Petrogres and its subsidiaries business operations includes purchasing, at the scene of mining and extraction, crude oil product to be loaded onto company ships for transport of product either directly to customers or to independent processing refineries, with the company acting internationally as it has been in business for seven (7) years. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies Basis of Presentation These interim condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company's financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period. Emerging Growth Company We qualify as an emerging growth company under the Jumpstart Our Business Startups Act of 2012 (the JOBS Act). Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933 as amended (the Securities Act) for complying with new or revised accounting standards. As an emerging growth company, we can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Cash and Cash Equivalents The Company considers all highly liquid investments with an original term of three months or less to be cash equivalents. Accounts Receivable The Company and its affiliates are engaged primarily in the purchase, transport and processing of oil and petroleum products. The Company performs ongoing credit evaluations of its customers' financial condition and, generally, requires no collateral from its customers. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments and trade accounts receivables. The Company places its temporary cash investments with financial institutions and limits the amount of credit exposure to any one financial institution. Concentrations of credit risk with respect to trade receivables are limited due to the short payment terms dictated by the industry and operating environment. See Note 4 for concentrations of credit risk as of September 30, 2016 and December 31, 2015. Inventory The Company's inventory, which consists primarily of crude oil purchases on the vessel in transport, is valued at the lower of cost or market using the mark-to-market method of valuation. Marketable Securities The Company classifies its marketable securities as available-for-sale securities, which are carried at their fair value based on the quoted market prices of the securities with unrealized gains and losses, net of deferred income taxes, reported as accumulated other comprehensive income (loss), a separate component of stockholders equity. Realized gains and losses on available-for-sale securities are included in net earnings in the period earned or incurred. Property and Equipment Fixed assets consisted of the following as of September 30, 2016 and December 31, 2015: 2016 2015 Vessels $ 9,999,380 $ 9,550,000 Furniture and equipment 88,117 85,000 10,087,497 9,635,000 Less: accumulated depreciation (3,999,073 ) (3,491,000 ) $ 6,088,424 $ 6,144,000 Property and equipment are stated at cost, and depreciation is provided by use of straight-line methods over the estimated useful lives of the assets. The estimated useful lives of property and equipment are as follows: Vessels 15 years Office equipment and furniture 10 years Computer hardware 5 years Depreciation expense of $170,882 and $165,875 was recorded for the three months ended September 30, 2016 and 2015, respectively. Depreciation expense of $505,759 and $497,625 was recorded for the nine months ended September 30, 2016 and 2015, respectively. Revenue Recognition The Company recognizes revenues after product is delivered to contracted customer. Product in transit at the end of an accounting period is recorded at an estimated value which is adjusted upon load certification. The Company recognizes revenue in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 605, Revenue Recognition. ASC 605 requires that the following four basic criteria are met (1) persuasive evidence of an arrangement exists, (2) delivery of products and services has occurred, (3) the fee is fixed or determinable and (4) collectability is reasonably assured. The Company recognizes revenue during the month in which commissions are earned. Fair Value of Financial Instruments Fair value measurements are determined under a three-level hierarchy for fair value measurements that prioritizes the inputs to valuation techniques used to measure fair value, distinguishing between market participant assumptions developed based on market data obtained from sources independent of the reporting entity (observable inputs) and the reporting entitys own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). Fair value is the price that would be received to sell an asset or would be paid to transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date. In determining fair value, the Company primarily uses prices and other relevant information generated by market transactions involving identical or comparable assets (market approach). The Company also considers the impact of a significant decrease in volume and level of activity for an asset or liability when compared with normal activity to identify transactions that are not orderly. The highest priority is given to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Securities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The three hierarchy levels are defined as follows: Level 1 - Quoted prices in active markets that is unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 - Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly; Level 3 - Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. Credit risk adjustments are applied to reflect the Companys own credit risk when valuing all liabilities measured at fair value. The methodology is consistent with that applied in developing counterparty credit risk adjustments, but incorporates the Companys own credit risk as observed in the credit default swap market. The Company's financial instruments consist primarily of cash, accounts receivable, inventory, marketable securities, accounts payable and accrued expenses and convertible debt. The carrying amount of the Companys accounts payable approximate fair value to their short term. Marketable securities are adjusted to fair value each balance sheet date, based on quoted prices; which are considered level 1 inputs (see Note 6). The Companys derivative liability is valued using the level 3 inputs (see Note 7). The estimated fair value is not necessarily indicative of the amounts the Company would realize in a current market exchange or from future earnings or cash flows. The following table represents the Companys financial instruments that are measured at fair value on a recurring basis as of September 30, 2016 for each fair value hierarchy level: September 30, 2016 Derivative Marketable Total Level I $ $ 4,140 $ 4,140 Level II $ $ $ Level III $ 68,154 $ $ 68,154 The carrying amount of the Companys accounts payable approximate fair value to their short term. Earnings (Loss) Per Share The Company reports earnings (loss) per share in accordance with ASC 260, "Earnings per Share." Basic earnings (loss) per share is computed by dividing net income (loss), after deducting preferred stock dividends accumulated during the period, by the weighted-average number of shares of common stock outstanding during each period. Diluted earnings per share is computed by dividing income by the weighted-average number of shares of common stock, common stock equivalents and other potentially dilutive securities outstanding during the period. Potentially dilutive securities for the periods ended September 30, 2016 includes the Companys outstanding convertible debt that is convertible into approximately 3,457,551 shares of common stock. Accounting for Stock-based Compensation The Company accounts for stock awards issued to non-employees in accordance with ASC 505-50, Equity-Based Payments to Non-Employees. The measurement date is the earlier of (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty's performance is complete. Stock awards granted to non-employees are valued at their respective measurement dates based on the trading price of the Companys common stock and recognized as expense during the period in which services are provided. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reported period. Actual results could differ from those estimates. Income Taxes The Company accounts for income taxes in accordance with ASC 740-10, Income Taxes. The Company recognizes deferred tax assets and liabilities to reflect the estimated future tax effects, calculated at the tax rate expected to be in effect at the time of realization. The Company records a valuation allowance related to a deferred tax asset when it is more likely than not that some portion of the deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment. ASC 740-10 prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements and provides guidance on recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition issues. The Company classifies interest and penalties as a component of interest and other expenses. To date, the Company has not been assessed, nor has the Company paid, any interest or penalties. The Company measures and records uncertain tax positions by establishing a threshold for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Only tax positions meeting the more-likely-than-not recognition threshold at the effective date may be recognized or continue to be recognized. The Companys tax years subsequent to 2010 remain subject to examination by federal and state tax jurisdictions. Comprehensive Income The Company has adopted ASC Topic 220, "Comprehensive Income." This statement establishes standards for reporting comprehensive income and its components in a financial statement. Comprehensive income as defined includes all changes in equity (net assets) during a period from non-owner sources. Items included in the Companys comprehensive loss consist of unrealized losses on available-for-sale securities. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Note 3 - Recent Accounting Pronouncements Accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption. |
Sales Concentration and Concent
Sales Concentration and Concentration of Credit Risk | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Sales Concentration and Concentration of Credit Risk | Note 4 - Sales Concentration and Concentration of Credit Risk Sales and Accounts Receivable Following is a summary of customers who accounted for more than ten percent (10%) of the Companys revenues for the three and nine months ended September 30, 2016 and 2015 and the accounts receivable balance as of September 30, 2016: 2016 2015 Customer Sales % Three Sales % Nine Sales % Three Sales % Nine Accounts A 35.2 % 26.1 % 48.4 % 23.3 % $ 639,835 B 22.2 % 25.8 % 28.8 % 21.9 % 560,875 C 17.1 % 16.2 % 13.1 % 17.8 % 648,980 Total 74.5 % 68.1 % 90.3 % 63.0 % $ 1,849,690 The concentration of credit risk per the table about is 73% of total accounts receivable as of September 30, 2016. |
Convertible Notes Payable
Convertible Notes Payable | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable | Note 5 - Convertible Notes Payable Effective with the SEA, Petrogres assumed and acquired two convertible promissory notes that were issued to Mammoth Corporation (Mammoth). Mammoth Note 1 had a balance of $31,339 and Mammoth Note 2 had a balance of $38,280. Mammoth Note 1 and Mammoth Note 2 are referred to as the Mammoth Notes. The Mammoth Notes became due on September 9, 2016. The Company determined that the conversion feature of the Mammoth Notes represent an embedded derivative since the Notes are convertible into a variable number of shares upon conversion. Accordingly, the Mammoth Notes were not considered to be conventional debt under EITF 00-19 and the embedded conversion feature was bifurcated from the debt host and accounted for as a derivative liability. Accordingly, the fair value of these derivative instruments being recorded as a liability on the consolidated balance sheet with the corresponding amount recorded as a discount to each Note. Such discount is being amortized from the date of issuance to the maturity dates of the Notes. The change in the fair value of the liability for derivative contracts are recorded in other income or expenses in the consolidated statements of operations at the end of each quarter, with the offset to the derivative liability on the balance sheet. The embedded feature included in the Mammoth Notes resulted in a debt discount of $48,975 on the date the Mammoth Notes were assumed and a derivative liability of $300,321. A summary of the derivative liability balance of the Mammoth Notes as of September 30, 2016 is as follows: 2016 Balance assumed $ 300,321 Reduction for conversion (82,652 ) Fair Value Change (149,515 ) Ending Balance $ 69,154 The fair value at the assumption and re-measurement dates for the Companys derivative liabilities were based upon the following management assumptions as of September 30, 2016: Assumption date Remeasurement date Expected dividends -0- -0- Expected volatility 363 % 413 % Expected term in months 6 3 Risk free interest .49 % .28 % A summary of the convertible notes payable balance as of September 30, 2016 is as follows: 2016 Assumed Balance $ 69,619 Conversion of convertible notes (24,732 ) Ending Balance $ 44,887 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 6 - Related Party Transactions Prepaid expenses As of September 30, 2016, our wholly owned subsidiary advanced $395,009 to our CEO. Due to Stockholders Officers compensation For the three and nine months ended September 30, 2016 and 2015, the Company recorded expenses to its officers the following amounts, included in Administration Costs in the statements of operations, included herein: Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 President $ 70,000 $ $ 70,000 $ The Company accrued $70,000 (included in Due to Officer on the balance sheet presented herein) of officers compensation during the three months ended September 30, 2016, in recognition of agreeing to compensate the Companys CEO $10,000 per month retroactive to March 1, 2016. Officers advances During the nine months ended September 30, 2016, our CEO advanced the Company $104,100 and was repaid $37,500. As of September 30, 2016, the Company owed the CEO $66,600 (included in Due to Officer on the balance sheet presented herein). |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | Note 7 - Stockholders Equity Common Stock Effective February 29, 2016, the Company issued 1,101,642 shares of the Companys common stock to Agritek Holdings, Inc. pursuant to a Debt Settlement Agreement in full settlement of the amount owed to Agritek of $283,547. Upon completion of the SEA between the Company and Petrogres, the Company issued to the sole Petrogres shareholder 136,000,000 shares of common stock of the Company in exchange for one hundred percent (100%) of the issued and outstanding share capital of Petrogres from the sole shareholder of Petrogres. On March 7, 2016, the Company issued 1,000,000 shares of common stock to Mammoth upon the conversion of $2,700 of principal at a conversion price of $0.0027 per share. On April 11, 2016, the Company issued 6,800,000 shares of common stock to Mammoth upon the conversion of $22,032 of principal at a conversion price of $0.00324 per share. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 8 - Income Taxes Deferred income taxes reflect the net tax effects of operating loss and tax credit carry forwards and temporary differences between carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Due to the uncertainty of the Companys ability to realize the benefit of the deferred tax assets, the deferred tax assets are fully offset by a valuation allowance at September 30, 2016. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 9 - Commitments and Contingencies The Company is not a party to any litigation and, to its knowledge, no action, suit or proceeding has been threatened against the Company. Other Agreements 1. Platon Oil Refinery - Partnership agreement dd: October 2014 2. Eklipza Energy - renewing from time to time 3. Kare & Kare Ltd 4. Atra Marine & Oil Ltd. |
Summary of Significant Accoun15
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These interim condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company's financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period. |
Emerging Growth Company | Emerging Growth Company We qualify as an emerging growth company under the Jumpstart Our Business Startups Act of 2012 (the JOBS Act). Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933 as amended (the Securities Act) for complying with new or revised accounting standards. As an emerging growth company, we can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original term of three months or less to be cash equivalents. |
Accounts Receivable | Accounts Receivable The Company and its affiliates are engaged primarily in the purchase, transport and processing of oil and petroleum products. The Company performs ongoing credit evaluations of its customers' financial condition and, generally, requires no collateral from its customers. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments and trade accounts receivables. The Company places its temporary cash investments with financial institutions and limits the amount of credit exposure to any one financial institution. Concentrations of credit risk with respect to trade receivables are limited due to the short payment terms dictated by the industry and operating environment. See Note 4 for concentrations of credit risk as of September 30, 2016 and December 31, 2015. |
Inventory | Inventory The Company's inventory, which consists primarily of crude oil purchases on the vessel in transport, is valued at the lower of cost or market using the mark-to-market method of valuation. |
Marketable Securities | Marketable Securities The Company classifies its marketable securities as available-for-sale securities, which are carried at their fair value based on the quoted market prices of the securities with unrealized gains and losses, net of deferred income taxes, reported as accumulated other comprehensive income (loss), a separate component of stockholders equity. Realized gains and losses on available-for-sale securities are included in net earnings in the period earned or incurred. |
Property and Equipment | Property and Equipment Fixed assets consisted of the following as of September 30, 2016 and December 31, 2015: 2016 2015 Vessels $ 9,999,380 $ 9,550,000 Furniture and equipment 88,117 85,000 10,087,497 9,635,000 Less: accumulated depreciation (3,999,073 ) (3,491,000 ) $ 6,088,424 $ 6,144,000 Property and equipment are stated at cost, and depreciation is provided by use of straight-line methods over the estimated useful lives of the assets. The estimated useful lives of property and equipment are as follows: Vessels 15 years Office equipment and furniture 10 years Computer hardware 5 years Depreciation expense of $170,882 and $165,875 was recorded for the three months ended September 30, 2016 and 2015, respectively. Depreciation expense of $505,759 and $497,625 was recorded for the nine months ended September 30, 2016 and 2015, respectively. |
Revenue Recognition | Revenue Recognition The Company recognizes revenues after product is delivered to contracted customer. Product in transit at the end of an accounting period is recorded at an estimated value which is adjusted upon load certification. The Company recognizes revenue in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 605, Revenue Recognition. ASC 605 requires that the following four basic criteria are met (1) persuasive evidence of an arrangement exists, (2) delivery of products and services has occurred, (3) the fee is fixed or determinable and (4) collectability is reasonably assured. The Company recognizes revenue during the month in which commissions are earned. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value measurements are determined under a three-level hierarchy for fair value measurements that prioritizes the inputs to valuation techniques used to measure fair value, distinguishing between market participant assumptions developed based on market data obtained from sources independent of the reporting entity (observable inputs) and the reporting entitys own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). Fair value is the price that would be received to sell an asset or would be paid to transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date. In determining fair value, the Company primarily uses prices and other relevant information generated by market transactions involving identical or comparable assets (market approach). The Company also considers the impact of a significant decrease in volume and level of activity for an asset or liability when compared with normal activity to identify transactions that are not orderly. The highest priority is given to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Securities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The three hierarchy levels are defined as follows: Level 1 - Quoted prices in active markets that is unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 - Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly; Level 3 - Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. Credit risk adjustments are applied to reflect the Companys own credit risk when valuing all liabilities measured at fair value. The methodology is consistent with that applied in developing counterparty credit risk adjustments, but incorporates the Companys own credit risk as observed in the credit default swap market. The Company's financial instruments consist primarily of cash, accounts receivable, inventory, marketable securities, accounts payable and accrued expenses and convertible debt. The carrying amount of the Companys accounts payable approximate fair value to their short term. Marketable securities are adjusted to fair value each balance sheet date, based on quoted prices; which are considered level 1 inputs (see Note 6). The Companys derivative liability is valued using the level 3 inputs (see Note 7). The estimated fair value is not necessarily indicative of the amounts the Company would realize in a current market exchange or from future earnings or cash flows. The following table represents the Companys financial instruments that are measured at fair value on a recurring basis as of September 30, 2016 for each fair value hierarchy level: September 30, 2016 Derivative Marketable Total Level I $ $ 4,140 $ 4,140 Level II $ $ $ Level III $ 68,154 $ $ 68,154 The carrying amount of the Companys accounts payable approximate fair value to their short term. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share The Company reports earnings (loss) per share in accordance with ASC 260, "Earnings per Share." Basic earnings (loss) per share is computed by dividing net income (loss), after deducting preferred stock dividends accumulated during the period, by the weighted-average number of shares of common stock outstanding during each period. Diluted earnings per share is computed by dividing income by the weighted-average number of shares of common stock, common stock equivalents and other potentially dilutive securities outstanding during the period. Potentially dilutive securities for the periods ended September 30, 2016 includes the Companys outstanding convertible debt that is convertible into approximately 3,457,551 shares of common stock. |
Accounting for Stock-based Compensation | Accounting for Stock-based Compensation The Company accounts for stock awards issued to non-employees in accordance with ASC 505-50, Equity-Based Payments to Non-Employees. The measurement date is the earlier of (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty's performance is complete. Stock awards granted to non-employees are valued at their respective measurement dates based on the trading price of the Companys common stock and recognized as expense during the period in which services are provided. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reported period. Actual results could differ from those estimates. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC 740-10, Income Taxes. The Company recognizes deferred tax assets and liabilities to reflect the estimated future tax effects, calculated at the tax rate expected to be in effect at the time of realization. The Company records a valuation allowance related to a deferred tax asset when it is more likely than not that some portion of the deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment. ASC 740-10 prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements and provides guidance on recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition issues. The Company classifies interest and penalties as a component of interest and other expenses. To date, the Company has not been assessed, nor has the Company paid, any interest or penalties. The Company measures and records uncertain tax positions by establishing a threshold for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Only tax positions meeting the more-likely-than-not recognition threshold at the effective date may be recognized or continue to be recognized. The Companys tax years subsequent to 2010 remain subject to examination by federal and state tax jurisdictions. |
Comprehensive Income | Comprehensive Income The Company has adopted ASC Topic 220, "Comprehensive Income." This statement establishes standards for reporting comprehensive income and its components in a financial statement. Comprehensive income as defined includes all changes in equity (net assets) during a period from non-owner sources. Items included in the Companys comprehensive loss consist of unrealized losses on available-for-sale securities. |
Summary of Significant Accoun16
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Summary Of Significant Accounting Policies Tables | |
Fixed assets | 2016 2015 Vessels $ 9,999,380 $ 9,550,000 Furniture and equipment 88,117 85,000 10,087,497 9,635,000 Less: accumulated depreciation (3,999,073 ) (3,491,000 ) $ 6,088,424 $ 6,144,000 |
Financial instruments measured at fair value on a recurring basis | September 30, 2016 Derivative Marketable Total Level I $ $ 4,140 $ 4,140 Level II $ $ $ Level III $ 68,154 $ $ 68,154 |
Sales Concentration and Conce17
Sales Concentration and Concentration of Credit Risk (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Sales Concentration And Concentration Of Credit Risk Tables | |
Summary of customer concentration and accounts receivable balance | 2016 2015 Customer Sales % Three Sales % Nine Sales % Three Sales % Nine Accounts A 35.2 % 26.1 % 48.4 % 23.3 % $ 639,835 B 22.2 % 25.8 % 28.8 % 21.9 % 560,875 C 17.1 % 16.2 % 13.1 % 17.8 % 648,980 Total 74.5 % 68.1 % 90.3 % 63.0 % $ 1,849,690 |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Summary of derivative liability balance | 2016 Balance assumed $ 300,321 Reduction for conversion (82,652 ) Fair Value Change (149,515 ) Ending Balance $ 69,154 |
Fair value assumptions for derivative liabilities | Assumption date Remeasurement date Expected dividends -0- -0- Expected volatility 363 % 413 % Expected term in months 6 3 Risk free interest .49 % .28 % |
Summary of convertible notes payable balance | 2016 Assumed Balance $ 69,619 Conversion of convertible notes (24,732 ) Ending Balance $ 44,887 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions Tables | |
Expenses to officers, included in Salaries and Management Fees | Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 President $ 70,000 $ $ 70,000 $ |
Organization (Details Narrative
Organization (Details Narrative) - $ / shares | 9 Months Ended | ||
Sep. 30, 2016 | Feb. 29, 2016 | Dec. 31, 2015 | |
Increase of authorized capital, shares of common stock | 490,000,000 | 490,000,000 | |
Increase of authorized capital, common stock par value | $ 0.001 | ||
Increase of authorized capital, shares of preferred stock | 10,000,000 | 10,000,000 | |
Increase of authorized capital, preferred stock par value | $ 0.001 | $ 0.001 | |
Acquisition of Petrogres Co. Limited | |||
Interest acquired | 100.00% | ||
Restricted common stock shares issued | 136,000,000 | ||
Shares issued, interest of issued and outstanding shares of Company's common stock | 85.00% |
Summary of Significant Accoun21
Summary of Significant Accounting Policies - Fixed assets (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Summary Of Significant Accounting Policies - Fixed Assets Details | ||
Vessels | $ 9,999,380 | $ 9,550,000 |
Furniture and equipment | 88,117 | 85,000 |
Property and equipment, gross | 10,087,497 | 9,635,000 |
Less: accumulated depreciation | (3,999,073) | (3,491,000) |
Property and equipment, net | $ 6,088,424 | $ 6,144,000 |
Summary of Significant Accoun22
Summary of Significant Accounting Policies - Financial instruments measured at fair value on a recurring basis (Details) | Sep. 30, 2016USD ($) |
Level I | |
Derivative Liability | |
Marketable Securities | 4,140 |
Total | 4,140 |
Level II | |
Derivative Liability | |
Marketable Securities | |
Total | |
Level III | |
Derivative Liability | 68,154 |
Marketable Securities | |
Total | $ 68,154 |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Depreciation expense | $ 170,882 | $ 165,875 | $ 505,759 | $ 497,625 |
Antidilutive shares from outstanding convertible debt excluded from computation of earnings per share | 3,457,551 | |||
Vessels | ||||
Useful life of property and equipment | 15 years | |||
Office equipment and furniture | ||||
Useful life of property and equipment | 10 years | |||
Computer hardware and software | ||||
Useful life of property and equipment | 5 years |
Sales Concentration and Conce24
Sales Concentration and Concentration of Credit Risk - Summary of customer concentration and accounts receivable balance (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Customer A | ||||
Sales concentration percent | 35.20% | 48.40% | 26.10% | 23.30% |
Accounts receivable balance | $ 639,835 | $ 639,835 | ||
Customer B | ||||
Sales concentration percent | 22.20% | 28.80% | 25.80% | 21.90% |
Accounts receivable balance | $ 560,875 | $ 560,875 | ||
Customer C | ||||
Sales concentration percent | 17.10% | 13.10% | 16.20% | 17.80% |
Accounts receivable balance | $ 648,980 | $ 648,980 | ||
Totals | ||||
Accounts receivable balance | $ 1,849,690 | $ 1,849,690 | ||
Accounts receivable concentration percent | 74.50% | 90.30% | 63.00% | 68.10% |
Convertible Notes Payable - Sum
Convertible Notes Payable - Summary of derivative liability balance (Details) | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Ending Balance | $ 68,154 |
Derivative liability balance | |
Balance assumed | 300,321 |
Reduction for conversion | (82,652) |
Fair Value Change | (149,515) |
Ending Balance | $ 69,154 |
Convertible Notes Payable - Fai
Convertible Notes Payable - Fair value assumptions for derivative liabilities (Details) | 9 Months Ended |
Sep. 30, 2016 | |
Assumption date | |
Expected dividends | 0.00% |
Expected volatility | 363.00% |
Expected term | 6 months |
Risk free interest | 0.49% |
Remeasurement date | |
Expected dividends | 0.00% |
Expected volatility | 413.00% |
Expected term | 3 months |
Risk free interest | 0.28% |
Convertible Notes Payable - S27
Convertible Notes Payable - Summary of convertible notes payable balance (Details) - Convertible notes payable balance | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Assumed Balance | $ 69,619 |
Conversion of convertible notes | (24,732) |
Ending Balance | $ 44,887 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Feb. 29, 2016 | |
Mammoth Notes (1) | ||
Convertible promissory note, balance | $ 31,339 | |
Mammoth Notes (2) | ||
Convertible promissory note, balance | $ 38,280 | |
Mammoth Notes | ||
Due date | Sep. 9, 2016 | |
Debt discount | $ (48,975) | |
Derivative liability | $ 300,321 |
Related Party Transactions - Ex
Related Party Transactions - Expenses to officers, included in Salaries and Management Fees (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
President | ||||
Officers compensation | $ 70,000 | $ 70,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Related Party Transactions Details Narrative | |
Amounts advanced to CEO from wholly owned subsidiary | $ 395,009 |
Amounts advanced by CEO | 104,100 |
Amounts of advances repaid to CEO | 37,500 |
Amounts owed to CEO | $ 66,600 |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - USD ($) | Apr. 11, 2016 | Mar. 07, 2016 | Feb. 29, 2016 | Sep. 30, 2016 | Sep. 30, 2015 |
Stock issued to Agritek pursuant to Debt Settlement Agreement, shares | 1,101,642 | ||||
Stock issued to Agritek pursuant to Debt Settlement Agreement, amount | $ 283,547 | ||||
Stock issued upon conversion of debt, shares | 6,800,000 | 1,000,000 | |||
Stock issued upon conversion of debt, principal converted | $ 22,032 | $ 2,700 | $ 24,732 | ||
Stock issued upon conversion of debt, conversion price | $ 0.00324 | $ .0027 | |||
Acquisition of Petrogres Co. Limited | |||||
Interest acquired | 100.00% | ||||
Restricted common stock shares issued | 136,000,000 |