Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 20, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | ADM ENDEAVORS, INC. | |
Entity Central Index Key | 0001588014 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 131,770,000 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash | $ 23,960 | $ 31,199 |
Accounts receivable, net | 221,456 | 237,586 |
Inventory | 55,832 | 92,646 |
Prepaid expense | 137,500 | |
Other receivable | 19,379 | 19,226 |
Total current assets | 458,127 | 380,657 |
Fixed assets and finance lease right of use assets, net | 211,730 | 223,549 |
Operating lease right-of use assets, net | 164,838 | |
Goodwill | 688,778 | 688,778 |
Total assets | 1,523,473 | 1,292,984 |
Current liabilities | ||
Convertible note payable, net of discounts | 106,092 | 89,544 |
Note payable | 4,534 | 4,581 |
Finance lease liability, current portion | 18,678 | 26,684 |
Current-portion operating lease obligation | 140,519 | |
Accounts payable | 78,563 | 92,060 |
Accounts payable to related parties | 31,946 | 50,401 |
Accrued expenses | 362,450 | 492,117 |
Due to related party | 53,400 | 50,000 |
Derivative liabilities | 185,120 | 197,572 |
Total current liabilities | 981,302 | 1,002,959 |
Non-current liabilities | ||
Long-term lease obligations, net of current portion | 24,319 | |
Note payable, net of current portion | 4,700 | 6,007 |
Total non-current liabilities | 29,019 | 6,007 |
Total liabilities | 1,010,321 | 1,008,966 |
Commitments and contingencies | ||
Stockholders' equity | ||
Preferred stock, $0.001 par value, 80,000,000 shares authorized, 2,000,000 and 2,000,000 shares outstanding as of March 31, 2019 and December 31, 2018, respectively | 2,000 | 2,000 |
Common stock, $0.001 par value, 800,000,000 shares authorized, 131,770,000 and 128,020,000 shares issued, issuable, and outstanding at March 31, 2019 and December 31, 2018, respectively | 131,770 | 128,020 |
Additional paid-in capital | 799,130 | 427,880 |
Accumulated deficit | (419,748) | (273,882) |
Total stockholders' equity | 513,152 | 284,018 |
Total liabilities and stockholders' equity | $ 1,523,473 | $ 1,292,984 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 80,000,000 | 80,000,000 |
Preferred stock, shares outstanding | 2,000,000 | 2,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 800,000,000 | 800,000,000 |
Common stock, shares issued | 131,770,000 | 128,020,000 |
Common stock, shares issuable | 131,770,000 | 128,020,000 |
Common stock, shares outstanding | 131,770,000 | 128,020,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Revenue, net | $ 535,444 | $ 587,454 |
Operating expenses | ||
Direct costs of revenue | 210,283 | 292,629 |
General and administrative | 312,165 | 244,913 |
Stock-based compensation | 106,250 | |
Marketing and selling | 39,137 | 9,868 |
Total operating expenses | 667,835 | 547,410 |
Operating income (loss) | (132,391) | 40,044 |
Other income (expense) | ||
Change in fair value of embedded conversion feature | 12,452 | |
Interest expense | (25,927) | |
Total other income (expense) | (13,475) | |
Loss before tax provision | (145,866) | 40,044 |
Provision for income taxes | ||
Net income (loss) | $ (145,866) | $ 40,044 |
Net loss per share - basic | $ 0 | $ 0 |
Net loss per share - diluted | $ 0 | $ 0 |
Weighted average number of shares outstanding - basic | 130,453,333 | |
Weighted average number of shares outstanding - diluted | 130,453,333 | 2,000,000 |
Consolidated Statement of Share
Consolidated Statement of Shareholders' Equity (Unaudited) - 3 months ended Mar. 31, 2019 - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2018 | $ 2,000 | $ 128,020 | $ 427,880 | $ (273,882) | $ 284,018 |
Balance, shares at Dec. 31, 2018 | 2,000,000 | 128,020,000 | |||
Common stock issued for services | $ 3,750 | 371,250 | 375,000 | ||
Common stock issued for services, shares | 3,750,000 | ||||
Net loss | (145,866) | (145,866) | |||
Balance at Mar. 31, 2019 | $ 2,000 | $ 131,770 | $ 799,130 | $ (419,748) | $ 513,152 |
Balance, shares at Mar. 31, 2019 | 2,000,000 | 131,770,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (145,866) | $ 40,044 |
Adjustments to reconcile net income (loss) to net cash used in operations: | ||
Depreciation and amortization | 11,819 | 8,389 |
Issuance of common stock for services | 106,250 | |
Bad debt expense | 641 | 7,295 |
Amortization of debt discount | 16,548 | |
Change in derivative liability | (12,452) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 15,489 | 145,960 |
Inventory | 36,814 | |
Prepaid expenses and other assets | (153) | (16,283) |
Accounts payable | (13,497) | (40,121) |
Accounts payable to related party | (18,455) | (23,978) |
Accrued expenses | 4,983 | (39,031) |
Federal income tax payable | (33,500) | |
Net cash provided by operating activities | 2,121 | 48,775 |
Net cash used in investing activities | ||
Cash flows from financing activities: | ||
Repayments on notes payable | (1,354) | |
Repayments on capitalized leases | (8,006) | (8,407) |
Net cash used in financing activities | (9,360) | (8,407) |
Net increase (decrease) in cash | (7,239) | 40,368 |
Cash at beginning of period | 31,199 | 45,589 |
Cash at end of period | 23,960 | 85,957 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 105 | |
Cash paid for taxes | ||
Non-cash investing and financing activities: | ||
Common stock issued for accrued expenses | 131,250 | |
Common stock issued for prepaid expenses | $ 137,500 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS On January 4, 2001, we incorporated in North Dakota as ADM Enterprises, Inc. On May 9, 2006, the Company changed both its name to ADM Endeavors, Inc. (“ADM Endeavors,” or the “Company,” “we,” “us,” or “our”) and its domicile to the state of Nevada. On July 1, 2008, the Company acquired all of the assets of ADM Enterprises, LLC (“ADM Enterprises”), a sole proprietorship owned by Ardell and Tammera Mees, in exchange for 10,000,000 newly issued shares of our common stock. As a result, ADM Enterprises became a wholly-owned subsidiary of the Company. Even though the Company was incorporated on January 4, 2001, it had no operations until the share exchange agreement with ADM Enterprises on July 1, 2008. ADM provides installation services to grocery décor and design companies primarily in North Dakota. In May 2013, the Company amended its Articles of Incorporation to provide for an increase in its authorized share capital. The authorized common stock increased to 800,000,000 shares at a par value of $0.001 per share and preferred stock increased to 80,000,000 shares at a par value of $0.001 per share. On April 19, 2018, the Company acquired Just Right Products, Inc. (“JRP”), a Texas corporation. JRP was incorporated on January 17, 2010. The acquisition of 100% of JRP from its sole shareholder was through a stock exchange whereas the Company issued 2,000,000 shares of restricted Series A preferred stock (the “Acquisition Shares”). Each share of the Series A preferred stock is convertible into ten shares of common stock and each share has 100 votes on a fully diluted basis. The Acquisition Shares represents 61% of voting shares, thus there is a change of voting control. The transaction was accounted for as a reverse acquisition. JRP is focused on being an added value reseller with concentration in embroidery, screen printing, importing and uniforms for businesses, schools and individuals in the State of Texas. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The Company follows the accrual basis of accounting in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP) and has a year-end of December 31. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented. The unaudited financial statements of the Company for the three month periods ended March 31, 2019 and 2018 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Regulation S-K. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair presentation of the financial position and the results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information as of December 31, 2018 was derived from the audited financial statements included in the Company’s financial statements as of and for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on April 16, 2019. These financial statements should be read in conjunction with that report. Principles of Consolidation The accompanying unaudited consolidated financial statements include all of the accounts of the Company and its wholly-owned subsidiaries, ADM Enterprises and JRP, at March 31, 2019. All significant intercompany balances and transactions have been eliminated. Use of Estimates The preparation of the Consolidated Financial Statements in accordance with U.S. GAAP requires management to make use of certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Consolidated Financial Statements and the reported amounts of revenue and expenses during the reported periods. The Company bases its estimates on historical experience and on various other assumptions that management believes are reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. Significant estimates are related to allowance for doubtful accounts, the reverse acquisition and deferred tax valuations. Stock-Based Compensation Stock-based compensation expense is recorded in accordance with FASB ASC Topic 718, Compensation – Stock Compensation, for stock and stock options awarded in return for services rendered. The expense is measured at the grant-date fair value of the award and recognized as compensation expense on a straight-line basis over the service period, which is the vesting period. The Company estimates forfeitures that it expects will occur and records expense based upon the number of awards expected to vest. Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. At March 31, 2019 and December 31, 2018, the Company had no cash equivalents. Allowance for Doubtful Accounts The Company establishes an allowance for doubtful accounts to ensure trade and notes receivable are not overstated due to non-collectability. The Company’s allowance is based on a variety of factors, including age of the receivable, significant one-time events, historical experience, and other risk considerations. The Company had an allowance at March 31, 2019 and December 31, 2018 of $0. The Company had bad debt expense of $641 and $7,295 for the three months ended March 31, 2019 and 2018, respectively. Inventory Inventory is valued at the lower of cost or net realizable value. Cost is determined using a weighted-average cost method. The Company decreases the value of inventory for estimated obsolescence equal to the difference between the cost of inventory and the estimated market value, based upon an aging analysis of the inventory on hand, specifically known inventory-related risks, and assumptions about future demand and market conditions. The Company has inventory of $55,832 and $92,646 as of March 31, 2019 and December 31, 2018, respectively. One vendor accounted for approximately 1.3% and 1.0% of inventory purchases in the three months ended March 31, 2019 and 2018, respectively. This same vendor made up 62% and 73% of our accounts payable as of March 31, 2019 and December 31, 2018, respectively. Derivative Instruments Derivatives are measured at their fair value on the balance sheet. In determining the appropriate fair value, the Company uses the Black-Scholes-Merton option pricing model. Changes in fair value are recorded in the consolidated statements of operations. Fair Value of Financial Instruments The Company measures its financial assets and liabilities in accordance with U.S. GAAP. For certain of our financial instruments, including cash, accounts payable, accrued expenses, and short-term loans the carrying amounts approximate fair value due to their short maturities. We follow accounting guidance for financial and non-financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use. The Company adopted the provisions of FASB ASC 820 (the “Fair Value Topic”) which defines fair value, establishes a framework for measuring fair value under U.S. GAAP, and expands disclosures about fair value measurements. The Company had no assets or liabilities other than derivative liabilities measured at fair value on a recurring basis at March 31, 2019 and December 31, 2018. Fixed Assets and Finance Lease Right of Use Assets Fixed assets and finance lease right of use assets are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method over the assets estimated useful life. Upon the sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in consolidated statements of operations. Classification Estimated Useful Lives Equipment 5 to 7 years Leasehold improvements Shorter of useful life or lease term Furniture and fixtures 4 to 7 years Websites 3 years Goodwill Goodwill represents the excess of purchase price and related costs over the value assigned to the net tangible assets of businesses acquired. Goodwill is not amortized, but instead assessed for impairment. The Company performs a qualitative assessment for each of its reporting units to determine if the two-step process for impairment testing is required. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than it’s carrying amount, the Company would then evaluate the recoverability of goodwill using a two-step impairment test approach at the reporting unit level. In the first step, the fair value for the reporting unit is compared to its book value including goodwill. In the case that the fair value of the reporting unit is less than book value, a second step is performed which compares the implied fair value of the reporting unit’s goodwill to the book value of the goodwill. The fair value for the goodwill is determined based on the difference between the fair values of the reporting unit and the net fair values of the identifiable assets and liabilities of such reporting unit. If the implied fair value of the goodwill is less than the book value, the difference is recognized as impairment. Impairment of Long-lived Assets The Company follows paragraph 360-10-05-4 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, such as intellectual property, are required to be reviewed for impairment annually, or whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. The Company determined that there were no impairments of long-lived assets at March 31, 2019 and December 31, 2018. Revenue Recognition We recognize revenue for merchandise sales, net of expected returns and sales tax, at the time of in-store purchase or delivery of the product to our guest. When merchandise is shipped to our guests, we estimate receipt based on historical experience. Revenue is deferred and a liability is established for sales returns based on historical return rates and sales for the return period. We recognize an asset and corresponding adjustment to cost of sales for our right to recover returned merchandise. At each financial reporting date, we assess our estimates of expected returns, refund liabilities and return assets. For merchandise sold in our stores and online, tender is accepted at the point of sale. When we receive payment before the guest has taken possession of the merchandise, the amount received is recorded as deferred revenue until the transaction is complete. Our performance obligations for unfulfilled merchandise orders are typically satisfied within one week. Shipping and handling fees charged to guests relate to fulfillment activities and are included in net sales with the corresponding costs recorded in cost of sales. We provide consulting services which were minimal for the three months ended March 31, 2019 and 2018, respectively. Cost of Sales Cost of sales includes the actual cost of merchandise sold and services performed; the cost of transportation of merchandise from vendors to our distribution network, stores, or customers; shipping and handling costs from our stores or distribution network to customers; and the operating cost and depreciation of our sourcing and distribution network and online fulfillment centers. Net Income (Loss) per Share The Company computes basic and diluted income (loss) per share amounts pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic loss per share is computed by dividing net loss available to common shareholders, by the weighted average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted loss per share is computed by dividing net loss available to common shareholders by the diluted weighted average number of shares of common stock during the period. The diluted weighted average number of common shares outstanding is the basic weighted number of shares adjusted as of the first day of the year for any potentially diluted debt or equity. The dilutive effect of outstanding convertible securities and preferred stock is reflected in diluted earnings per share by application of the if-converted method. The following is a reconciliation of basic and diluted earnings (loss) per common share for the three months ended March 31, 2019 and 2018: For the Three Months Ended March 31, 2019 2018 Basic earnings per common share Numerator: Net earnings (loss) available to common shareholders $ (145,866 ) $ 40,044 Denominator: Weighted average common shares outstanding 130,453,333 - Basic earnings (loss) per common share $ 0.00 $ 0.00 Diluted earnings (loss) per common share Numerator: Net income (loss) available to common shareholders $ (145,866 ) $ 40,044 Add convertible debt interest - - Net income (loss) available to common shareholders $ (145,866 ) $ 40,044 Denominator: Weighted average common shares outstanding 130,453,333 - Preferred shares - 20,000,000 Convertible debt - - Adjusted weighted average common shares outstanding 130,453,333 20,000,000 Diluted earnings (loss) per common share $ 0.00 $ 0.00 Income Taxes The Company accounts for income taxes in accordance with FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and loss carry-forwards and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income (loss) in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rules on deferred tax assets and liabilities is recognized in operations in the year of change. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized. Tax benefits of uncertain tax positions are recognized only if it is more likely than not that the Company will be able to sustain a position taken on an income tax return. The Company has no liability for uncertain tax positions as of March 31, 2019 and December 31, 2018. Interest and penalties, if any, related to unrecognized tax benefits would be recognized as interest expense. The Company does not have any accrued interest or penalties associated with unrecognized tax benefits, nor was any significant interest expense recognized during the periods ended March 31, 2019 and 2018. On December 22, 2017, the United States Government passed new tax legislation that, among other provisions, will lower the corporate tax rate from 35% to 21%. In addition to applying the new lower corporate tax rate in 2018 and thereafter to any taxable income we may have, the legislation affects the way we can use and carry forward net operating losses previously accumulated and results in a revaluation of deferred tax assets recorded on our balance sheet. Given that the deferred tax assets are offset by a full valuation allowance, these changes will have no net impact on the Company’s financial position and net loss. However, if and when we become profitable, we will receive a reduced benefit from such deferred tax assets. Segment Information In accordance with the provisions of ASC 280-10, “Disclosures about Segments of an Enterprise and Related Information,” the Company is required to report financial and descriptive information about its reportable operating segments. The Company has one operating segment as of March 31, 2019 and December 31, 2018. Effect of Recent Accounting Pronouncements Accounting Standards Adopted During the Quarter Ended March 31, 2019 The Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), as of January 1, 2018, using the modified retrospective approach. The modified retrospective approach provides a method for recording existing leases at the application date. In addition, the Company elected the available practical expedients permitted under the transaction guidance within the new standard. The most significant impact from the adoption of the new standard was the recognition of operating lease right-of-use assets and operating lease liabilities. Adoption of the new standard resulted in the recording of additional lease assets and liabilities of $198,566 as of January 1, 2019. The standard did not materially impact the consolidated net income and had no impact on cash flows. Recently Issued Accounting Standards Not Yet Adopted The Company has reviewed all recently issued, but not yet adopted, accounting standards, in order to determine their effects, if any, on its results of operations, financial position or cash flows. Based on that review, the Company believes that no other pronouncements will have a significant effect on its financial statements . |
Going Concern
Going Concern | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | NOTE 3 – GOING CONCERN The accompanying unaudited financial statements and the factors within it, have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business and the ability of the Company to continue as a going concern for a reasonable period of time. The Company had net loss of $145,866 and had cash provided by operating activities of $2,121 for the three months ended March 31, 2019. As of March 31, 2019, the Company had a working capital deficit of $523,175, and an accumulated deficit of $419,748. The Company’s continuation as a going concern is dependent upon its ability to generate revenues and its ability to continue receiving investment capital and loans from third parties to sustain its current level of operations. The Company is in the process of securing working capital from investors for common stock, convertible notes payable, and/or strategic partnerships. No assurance can be given that the Company will be successful in these efforts. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 4 – COMMITMENTS AND CONTINGENCIES Legal Matters From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of May 20, 2019, there were no pending or threatened lawsuits. Franchise Agreement The Company has a franchise agreement effective February 19, 2014 expiring in February 2024, with a right to renew for an additional 5 years to operate stores and websites in the Company’s exclusive territory. The Company is obligated to pay 5% of gross revenue for use of systems and manuals. During the three months ended March 31, 2019 and 2018, the Company paid $4,151 and $5,216 for the franchise agreement. Uniform Supply Agreement The Company has an agreement to be the exclusive provider of school uniforms and logos for a charter school. The Company is obligated to provide a 3% donation to the charter school for each school year. The agreement is for each school year ending through May 31, 2019. During the three months ended March 31, 2019 and 2018, the Company paid $0 and $22,440 for the uniform supply agreement, respectively. |
Fixed Assets and Finance Lease
Fixed Assets and Finance Lease Right of Use Assets | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets and Finance Lease Right of Use Assets | NOTE 5 – FIXED ASSETS AND FINANCE LEASE RIGHT OF USE ASSETS Fixed assets and finance lease right of use assets, stated at cost, less accumulated depreciation at March 31, 2019 and December 31, 2018 consisted of the following: March 31, 2019 December 31, 2018 Equipment $ 368,869 $ 353,539 Furniture and fixtures 10,489 25,819 Autos and trucks 65,680 65,680 Less: accumulated depreciation (233,308 ) (221,489 ) Property and equipment, net $ 211,730 $ 223,549 Depreciation expense for the three months ended March 31, 2019 and 2018 was $11,819 and $8,389, respectively. |
Note Payable
Note Payable | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Note Payable | NOTE 6 – NOTE PAYABLE As of March 31, 2019, and December 31, 2018, the Company has a note payable balance of $9,234 and $10,588, respectively. On April 1, 2018, the Company assumed a note payable in connection with the reverse acquisition. The loan is for $34,628 including finance charges and is secured by a vehicle. The Company will make 84 payments of $412 during the term of the loan. The loan term ends on March 10, 2021. The current portion of the loan is $4,534. |
Convertible Note Payable
Convertible Note Payable | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Convertible Note Payable | NOTE 7 – CONVERTIBLE NOTE PAYABLE On April 1, 2018, the Company assumed a convertible promissory note in connection with the reverse acquisition. The funding was in tranches whereby the Company assumed the first tranche of $48,697. The Company received the remaining tranches totaling $57,395 during the year ended December 31, 2018. The Company received total funding of $106,092 as of December 31, 2018. The note had fees of $53,046 which were recorded as a discount to the convertible promissory note and are being amortized over the life of the loan using the effective interest method. The Company recorded interest expense of $25,849 during the three months ended March 31, 2019. The note balance was $106,092 as of March 31, 2019. Derivative liabilities The conversion features embedded in the convertible notes were evaluated to determine if such conversion feature should be bifurcated from its host instrument and accounted for as a freestanding derivative. In the convertible notes with variable conversion terms, the conversion feature was accounted for as a derivative liability. The derivatives associated with the term convertible notes wert recognized as a discount to the debt instrument and the discount is amortized over the expected life of the notes with any excess of the derivative value over the note payable value recognized as additional interest expense at the issuance date. The derivative liability was calculated using the Black-Scholes method over the expected terms of the convertible debt, with a risk-free rate of 2.40% and volatility of 100% as of March 31, 2019. Included in Derivative Income in the accompanying unaudited consolidated statements of operations is expense arising from the change in fair value of the derivatives of $12,452 during the three months ended March 31, 2019. The note is convertible into common stock at a price of 35% of the lowest three trading prices during the ten days prior to conversion. |
Finance Leases
Finance Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Finance Leases | NOTE 8 – FINANCE LEASES On November 17, 2016, the Company obtained one finance lease. Payments are $2,668 per month for three years and the amount of the finance lease obligation has been reduced to $18,678 at March 31, 2019. |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | NOTE 9 – ACCRUED EXPENSES The Company had total accrued expenses of $362,450 and $492,117 as of March 31, 2019 and December 31, 2018. See breakdown below of accrued expenses as follows: March 31, 2019 December 31, 2018 Credit cards payable $ 171,185 $ 197,153 Accrued stock compensation - 131,250 Accrued officer salary 115,000 85,000 Accrued interest 53,046 43,745 Other accrued expenses 23,219 34,969 $ 362,450 $ 492,117 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 10 – RELATED PARTY TRANSACTIONS The majority shareholder, director and officer, is the owner of M & M Real Estate, Inc. (“M & M”). M & M leases the Haltom City, Texas facility to the Company. The monthly lease payment is currently $6,500. The Company incurred lease expense of $19,500 and $19,500, respectively, to M & M for the three months ended March 31, 2019 and 2018, respectively. The Company has accounts payable to M&M of $31,946 and $50,401 as of March 31, 2019 and December 31, 2018, respectively. The accounts payable is for unpaid lease obligations and products the Company purchased from M&M during the three months ended March 31, 2019 and 2018, respectively. The Company purchased approximately $11,425 and $1,919, respectively. M&M marks up their sales to JRP by 10%. The Company has been provided office space by its chief executive officer, Ardell Mees, at no cost. Management has determined that such cost is nominal and did not recognize the rent expense in its financial statements. As of March 31, 2019, the Company owes Ardell Mees, CEO $53,400 from expenses assumed in connection with the reverse acquisition. Employment and Consulting Agreements In April 2018, the Company executed a two-year employment agreement with Ardell D. Mees, the Company’s Chief Executive Officer and Chief Financial Officer. As compensation for services, Mr. Mees is to receive an annual base salary of $60,000. The amount payable to Mr. Mees at March 31, 2019 and December 31, 2018 was $57,500 and $42,500 respectively. In April 2018, the Company executed a two-year employment agreement with Marc Johnson, the Company’s Chief Operating Officer. As compensation for services, Mr. Johnson is to receive an annual base salary of $60,000. The amount payable to Mr. Johnson at March 31, 2019 and December 31, 2018 was $57,500 and $42,500 respectively. On May 1, 2018, the Company entered into a consulting agreement for financial services and business development for a term of one year and agreed to issue 2,250,000 common shares earned on a monthly basis to an officer’s family member. On January 9, 2019, the Company issued the shares of common stock. The Company incurred stock compensation expense of $56,250 for the three months ended March 31, 2019 and $0 as of March 31, 2018. In connection with the issuance of the common stock, the Company has a prepaid expense of $37,500 as of March 31, 2019 and $0 as of March 31, 2018. On February 28, 2019, the Company entered into a consulting agreement for financial services and business development for a term of six months and issued 1,500,000 common shares earned on a monthly basis. On February 28, 2019, the Company issued the shares of common stock. The Company incurred stock compensation expense of $50,000 for the three months ended March 31, 2019 and $0 as of March 31, 2018. In connection with the issuance of the common stock, the Company has a prepaid expense of $100,000 as of March 31, 2019 and $- as of March 31, 2018. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 11 – STOCKHOLDERS’ EQUITY Our Articles of Incorporation authorize the issuance of 800,000,000 shares of common stock and 80,000,000 shares of preferred stock with $0.001 par values per share. There were 131,770,000 and 128,020,000 outstanding shares of common stock at March 31, 2019 and December 31, 2018, respectively. There were 2,000,000 outstanding shares of preferred stock as of March 31, 2019 and December 31, 2018, respectively. Each share of preferred stock has 100 votes per share and is convertible into 10 shares of common stock. The preferred stock pays dividends equal with common stock and has preferential liquidation rights to common stock holders. On May 1, 2018, the Company entered into a consulting agreement for 1 year and agreed to issue 2,250,000 common shares vesting on a monthly basis. On January 9, 2019, the Company issued the shares of common stock. On January 28, 2019, the Company entered into a consulting agreement for 6 months and agreed to issue 1,500,000 common shares vesting on a monthly basis. On February 28, 2019, the Company issued the shares of common stock. |
Concentration of Customer
Concentration of Customer | 3 Months Ended |
Mar. 31, 2019 | |
Risks and Uncertainties [Abstract] | |
Concentration of Customer | NOTE 12 – CONCENTRATION OF CUSTOMER Concentration of Revenue For the three months ended March 31, 2019 and 2018, one customer made up 38% and 39% of revenues, respectively. No customers accounted for more than 10% of accounts receivable as of March 31, 2019 or 2018. |
Lease Liability
Lease Liability | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Lease Liability | NOTE 13 – LEASE LIABILITY Finance Leases Finance leases are included in finance lease right-of-use lease assets and finance lease liability current and long-term debt on the consolidated balance sheets. The associated amortization expense and interest expense are included in depreciation and amortization and interest expense, respectively, on the consolidated income statements. Operating Leases The Company leases office space. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Leases with initial terms in excess of 12 months are recorded as operating or financing leases in our consolidated balance sheet. Lease expense is recognized on a straight-line basis over the term of the lease. For leases beginning in 2018 and later, the Company accounts for lease components separately from the non-lease components. Most leases include one or more options to renew. The exercise of the lease renewal options is at the sole discretion of the Company. The depreciable life of the assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The Company leases approximately 18,000 square feet of space in Haltom City, Texas, pursuant to a lease that will expire on June 1, 2020. This facility serves as our corporate headquarters, manufacturing facility and showroom. The lease is with M & M Real Estate, Inc. (“M & M”), a company owned solely by our majority shareholder and director of the Company. Additionally, the Company has approximately 6,000 square feet of space in Arlington, Texas which serves as an academic showroom, pursuant to a lease that will expire on June 1, 2020. The Company has approximately 6,000 square feet of space in Arlington, Texas which serves as an academic showroom, pursuant to a lease that will expire on June 1, 2020 As of March 31, 2019, the operating lease right-of-use assets and operating lease liabilities were $164,838, respectively. The long-term portion of the operating lease liabilities, $24,319, is included in long-term debt. Operating lease expense during the three-months ended March 31, 2019 was $43,967 and was included as part of operating expenses. As of March 31, 2019, the weighted-average remaining lease term for operating leases was 1.2 years. As of March 31, 2019, the weighted-average discount rate for operating leases was 6.5%. Operating lease future minimum payments together with their present values as of March 31, 2019 are summarized as follows: Facilities Related Party Total 2019 $ 69,096 $ 78,000 $ 147,096 2020 11,516 13,000 24,516 Total lease payments 80,612 91,000 171,612 Less: interest (3,182 ) (3,592 ) (6,774 ) Present value of lease liabilities 77,430 87,408 164,838 Current-portion operating lease liability 66,007 74,512 140,519 Long-term portion operating lease liability $ 11,423 $ 12,896 $ 24,319 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 14 – SUBSEQUENT EVENTS The Company has evaluated subsequent events through the date the financial statements were issued and filed with the Securities and Exchange Commission. The Company has determined that there are no other such events that warrant disclosure or recognition in the financial statements, except as stated herein. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company follows the accrual basis of accounting in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP) and has a year-end of December 31. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented. The unaudited financial statements of the Company for the three month periods ended March 31, 2019 and 2018 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Regulation S-K. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair presentation of the financial position and the results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information as of December 31, 2018 was derived from the audited financial statements included in the Company’s financial statements as of and for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on April 16, 2019. These financial statements should be read in conjunction with that report. |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited consolidated financial statements include all of the accounts of the Company and its wholly-owned subsidiaries, ADM Enterprises and JRP, at March 31, 2019. All significant intercompany balances and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of the Consolidated Financial Statements in accordance with U.S. GAAP requires management to make use of certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Consolidated Financial Statements and the reported amounts of revenue and expenses during the reported periods. The Company bases its estimates on historical experience and on various other assumptions that management believes are reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. Significant estimates are related to allowance for doubtful accounts, the reverse acquisition and deferred tax valuations. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense is recorded in accordance with FASB ASC Topic 718, Compensation – Stock Compensation, for stock and stock options awarded in return for services rendered. The expense is measured at the grant-date fair value of the award and recognized as compensation expense on a straight-line basis over the service period, which is the vesting period. The Company estimates forfeitures that it expects will occur and records expense based upon the number of awards expected to vest. |
Cash Equivalents | Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. At March 31, 2019 and December 31, 2018, the Company had no cash equivalents. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company establishes an allowance for doubtful accounts to ensure trade and notes receivable are not overstated due to non-collectability. The Company’s allowance is based on a variety of factors, including age of the receivable, significant one-time events, historical experience, and other risk considerations. The Company had an allowance at March 31, 2019 and December 31, 2018 of $0. The Company had bad debt expense of $641 and $7,295 for the three months ended March 31, 2019 and 2018, respectively. |
Inventory | Inventory Inventory is valued at the lower of cost or net realizable value. Cost is determined using a weighted-average cost method. The Company decreases the value of inventory for estimated obsolescence equal to the difference between the cost of inventory and the estimated market value, based upon an aging analysis of the inventory on hand, specifically known inventory-related risks, and assumptions about future demand and market conditions. The Company has inventory of $55,832 and $92,646 as of March 31, 2019 and December 31, 2018, respectively. One vendor accounted for approximately 1.3% and 1.0% of inventory purchases in the three months ended March 31, 2019 and 2018, respectively. This same vendor made up 62% and 73% of our accounts payable as of March 31, 2019 and December 31, 2018, respectively. |
Derivative Instruments | Derivative Instruments Derivatives are measured at their fair value on the balance sheet. In determining the appropriate fair value, the Company uses the Black-Scholes-Merton option pricing model. Changes in fair value are recorded in the consolidated statements of operations. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company measures its financial assets and liabilities in accordance with U.S. GAAP. For certain of our financial instruments, including cash, accounts payable, accrued expenses, and short-term loans the carrying amounts approximate fair value due to their short maturities. We follow accounting guidance for financial and non-financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use. The Company adopted the provisions of FASB ASC 820 (the “Fair Value Topic”) which defines fair value, establishes a framework for measuring fair value under U.S. GAAP, and expands disclosures about fair value measurements. The Company had no assets or liabilities other than derivative liabilities measured at fair value on a recurring basis at March 31, 2019 and December 31, 2018. |
Fixed Assets and Finance Lease Right of Use Assets | Fixed Assets and Finance Lease Right of Use Assets Fixed assets and finance lease right of use assets are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method over the assets estimated useful life. Upon the sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in consolidated statements of operations. Classification Estimated Useful Lives Equipment 5 to 7 years Leasehold improvements Shorter of useful life or lease term Furniture and fixtures 4 to 7 years Websites 3 years |
Goodwill | Goodwill Goodwill represents the excess of purchase price and related costs over the value assigned to the net tangible assets of businesses acquired. Goodwill is not amortized, but instead assessed for impairment. The Company performs a qualitative assessment for each of its reporting units to determine if the two-step process for impairment testing is required. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than it’s carrying amount, the Company would then evaluate the recoverability of goodwill using a two-step impairment test approach at the reporting unit level. In the first step, the fair value for the reporting unit is compared to its book value including goodwill. In the case that the fair value of the reporting unit is less than book value, a second step is performed which compares the implied fair value of the reporting unit’s goodwill to the book value of the goodwill. The fair value for the goodwill is determined based on the difference between the fair values of the reporting unit and the net fair values of the identifiable assets and liabilities of such reporting unit. If the implied fair value of the goodwill is less than the book value, the difference is recognized as impairment. |
Impairment of Long-Lived Assets | Impairment of Long-lived Assets The Company follows paragraph 360-10-05-4 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, such as intellectual property, are required to be reviewed for impairment annually, or whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. The Company determined that there were no impairments of long-lived assets at March 31, 2019 and December 31, 2018. |
Revenue Recognition | Revenue Recognition We recognize revenue for merchandise sales, net of expected returns and sales tax, at the time of in-store purchase or delivery of the product to our guest. When merchandise is shipped to our guests, we estimate receipt based on historical experience. Revenue is deferred and a liability is established for sales returns based on historical return rates and sales for the return period. We recognize an asset and corresponding adjustment to cost of sales for our right to recover returned merchandise. At each financial reporting date, we assess our estimates of expected returns, refund liabilities and return assets. For merchandise sold in our stores and online, tender is accepted at the point of sale. When we receive payment before the guest has taken possession of the merchandise, the amount received is recorded as deferred revenue until the transaction is complete. Our performance obligations for unfulfilled merchandise orders are typically satisfied within one week. Shipping and handling fees charged to guests relate to fulfillment activities and are included in net sales with the corresponding costs recorded in cost of sales. We provide consulting services which were minimal for the three months ended March 31, 2019 and 2018, respectively. |
Cost of Sales | Cost of Sales Cost of sales includes the actual cost of merchandise sold and services performed; the cost of transportation of merchandise from vendors to our distribution network, stores, or customers; shipping and handling costs from our stores or distribution network to customers; and the operating cost and depreciation of our sourcing and distribution network and online fulfillment centers. |
Net Income (Loss) Per Share | Net Income (Loss) per Share The Company computes basic and diluted income (loss) per share amounts pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic loss per share is computed by dividing net loss available to common shareholders, by the weighted average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted loss per share is computed by dividing net loss available to common shareholders by the diluted weighted average number of shares of common stock during the period. The diluted weighted average number of common shares outstanding is the basic weighted number of shares adjusted as of the first day of the year for any potentially diluted debt or equity. The dilutive effect of outstanding convertible securities and preferred stock is reflected in diluted earnings per share by application of the if-converted method. The following is a reconciliation of basic and diluted earnings (loss) per common share for the three months ended March 31, 2019 and 2018: For the Three Months Ended March 31, 2019 2018 Basic earnings per common share Numerator: Net earnings (loss) available to common shareholders $ (145,866 ) $ 40,044 Denominator: Weighted average common shares outstanding 130,453,333 - Basic earnings (loss) per common share $ 0.00 $ 0.00 Diluted earnings (loss) per common share Numerator: Net income (loss) available to common shareholders $ (145,866 ) $ 40,044 Add convertible debt interest - - Net income (loss) available to common shareholders $ (145,866 ) $ 40,044 Denominator: Weighted average common shares outstanding 130,453,333 - Preferred shares - 20,000,000 Convertible debt - - Adjusted weighted average common shares outstanding 130,453,333 20,000,000 Diluted earnings (loss) per common share $ 0.00 $ 0.00 |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and loss carry-forwards and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income (loss) in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rules on deferred tax assets and liabilities is recognized in operations in the year of change. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized. Tax benefits of uncertain tax positions are recognized only if it is more likely than not that the Company will be able to sustain a position taken on an income tax return. The Company has no liability for uncertain tax positions as of March 31, 2019 and December 31, 2018. Interest and penalties, if any, related to unrecognized tax benefits would be recognized as interest expense. The Company does not have any accrued interest or penalties associated with unrecognized tax benefits, nor was any significant interest expense recognized during the periods ended March 31, 2019 and 2018. On December 22, 2017, the United States Government passed new tax legislation that, among other provisions, will lower the corporate tax rate from 35% to 21%. In addition to applying the new lower corporate tax rate in 2018 and thereafter to any taxable income we may have, the legislation affects the way we can use and carry forward net operating losses previously accumulated and results in a revaluation of deferred tax assets recorded on our balance sheet. Given that the deferred tax assets are offset by a full valuation allowance, these changes will have no net impact on the Company’s financial position and net loss. However, if and when we become profitable, we will receive a reduced benefit from such deferred tax assets. |
Segment Information | Segment Information In accordance with the provisions of ASC 280-10, “Disclosures about Segments of an Enterprise and Related Information,” the Company is required to report financial and descriptive information about its reportable operating segments. The Company has one operating segment as of March 31, 2019 and December 31, 2018. |
Effect of Recent Accounting Pronouncements | Effect of Recent Accounting Pronouncements Accounting Standards Adopted During the Quarter Ended March 31, 2019 The Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), as of January 1, 2018, using the modified retrospective approach. The modified retrospective approach provides a method for recording existing leases at the application date. In addition, the Company elected the available practical expedients permitted under the transaction guidance within the new standard. The most significant impact from the adoption of the new standard was the recognition of operating lease right-of-use assets and operating lease liabilities. Adoption of the new standard resulted in the recording of additional lease assets and liabilities of $198,566 as of January 1, 2019. The standard did not materially impact the consolidated net income and had no impact on cash flows. Recently Issued Accounting Standards Not Yet Adopted The Company has reviewed all recently issued, but not yet adopted, accounting standards, in order to determine their effects, if any, on its results of operations, financial position or cash flows. Based on that review, the Company believes that no other pronouncements will have a significant effect on its financial statements . |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Life of Assets | Classification Estimated Useful Lives Equipment 5 to 7 years Leasehold improvements Shorter of useful life or lease term Furniture and fixtures 4 to 7 years Websites 3 years |
Schedule of Basic and Diluted Earnings Per Common Share | The following is a reconciliation of basic and diluted earnings (loss) per common share for the three months ended March 31, 2019 and 2018: For the Three Months Ended March 31, 2019 2018 Basic earnings per common share Numerator: Net earnings (loss) available to common shareholders $ (145,866 ) $ 40,044 Denominator: Weighted average common shares outstanding 130,453,333 - Basic earnings (loss) per common share $ 0.00 $ 0.00 Diluted earnings (loss) per common share Numerator: Net income (loss) available to common shareholders $ (145,866 ) $ 40,044 Add convertible debt interest - - Net income (loss) available to common shareholders $ (145,866 ) $ 40,044 Denominator: Weighted average common shares outstanding 130,453,333 - Preferred shares - 20,000,000 Convertible debt - - Adjusted weighted average common shares outstanding 130,453,333 20,000,000 Diluted earnings (loss) per common share $ 0.00 $ 0.00 |
Fixed Assets and Finance Leas_2
Fixed Assets and Finance Lease Right of Use Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Fixed Assets | Fixed assets and finance lease right of use assets, stated at cost, less accumulated depreciation at March 31, 2019 and December 31, 2018 consisted of the following: March 31, 2019 December 31, 2018 Equipment $ 368,869 $ 353,539 Furniture and fixtures 10,489 25,819 Autos and trucks 65,680 65,680 Less: accumulated depreciation (233,308 ) (221,489 ) Property and equipment, net $ 211,730 $ 223,549 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | March 31, 2019 December 31, 2018 Credit cards payable $ 171,185 $ 197,153 Accrued stock compensation - 131,250 Accrued officer salary 115,000 85,000 Accrued interest 53,046 43,745 Other accrued expenses 23,219 34,969 $ 362,450 $ 492,117 |
Lease Liability (Tables)
Lease Liability (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Schedule of Future Minimum Payments of Operating Lease | Operating lease future minimum payments together with their present values as of March 31, 2019 are summarized as follows: Facilities Related Party Total 2019 $ 69,096 $ 78,000 $ 147,096 2020 11,516 13,000 24,516 Total lease payments 80,612 91,000 171,612 Less: interest (3,182 ) (3,592 ) (6,774 ) Present value of lease liabilities 77,430 87,408 164,838 Current-portion operating lease liability 66,007 74,512 140,519 Long-term portion operating lease liability $ 11,423 $ 12,896 $ 24,319 |
Organization and Description _2
Organization and Description of Business (Details Narrative) - $ / shares | Apr. 19, 2018 | Jul. 01, 2008 | Mar. 31, 2019 | Dec. 31, 2018 | May 31, 2013 |
Common stock, shares authorized | 800,000,000 | 800,000,000 | 800,000,000 | ||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||
Preferred stock, shares authorized | 80,000,000 | 80,000,000 | 80,000,000 | ||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||
Preferred stock voting rights description | Each share of preferred stock has 100 votes per share and is convertible into 10 shares of common stock. | ||||
Just Right Products, Inc. [Member] | |||||
Business acquisition, percentage | 100.00% | ||||
Acquisition percentage of voting shares | 61.00% | ||||
Just Right Products, Inc. [Member] | Series A Preferred Stock [Member] | |||||
Issuance of restricted shares | 2,000,000 | ||||
Preferred stock voting rights description | Each share of the Series A preferred stock is convertible into ten shares of common stock and each share has 100 votes on a fully diluted basis. | ||||
ADM Enterprises, Inc [Member] | |||||
Entity incorporation, date of incorporation | Jan. 4, 2001 | ||||
Just Right Products, Inc. [Member] | |||||
Entity incorporation, date of incorporation | Jan. 17, 2010 | ||||
Common Stock [Member] | |||||
Shares issued for assets acquired | 10,000,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019USD ($)Integer | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | Jan. 02, 2019USD ($) | |
Cash equivalents | ||||
Allowance for doubtful accounts receivable | 0 | 0 | ||
Bad debt expenses | 641 | $ 7,295 | ||
Inventory | 55,832 | 92,646 | ||
Impairments of long-lived assets | ||||
Income tax examination, description | On December 22, 2017, the United States Government passed new tax legislation that, among other provisions, will lower the corporate tax rate from 35% to 21%. | |||
Corporate tax rate | 21.00% | |||
Number of reporting segments | Integer | 1 | |||
Adoption of additional lease assets and liabilities | $ 198,566 | |||
Accounts Payable [Member] | ||||
Concentration risk percentage | 62.00% | 73.00% | ||
One Vendor [Member] | ||||
Concentration risk percentage | 1.30% | 1.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Estimated Useful Life of Assets (Details) | 3 Months Ended |
Mar. 31, 2019 | |
Equipment [Member] | Minimum [Member] | |
Fixed assets estimated useful life | 5 years |
Equipment [Member] | Maximum [Member] | |
Fixed assets estimated useful life | 7 years |
Leasehold Improvements [Member] | |
Estimated useful life of asset, description | Shorter of useful life or lease term |
Furniture and Fixtures [Member] | Minimum [Member] | |
Fixed assets estimated useful life | 4 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Fixed assets estimated useful life | 7 years |
Websites [Member] | |
Fixed assets estimated useful life | 3 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Basic and Diluted Earnings Per Common Share (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Accounting Policies [Abstract] | ||
Numerator: Net income (loss) available to common shareholders | $ (145,866) | $ 40,044 |
Numerator: Add convertible debt interest | ||
Numerator: Net income (loss) available to common shareholders | $ (145,866) | $ 40,044 |
Denominator: Weighted average common shares outstanding, Basic | 130,453,333 | |
Denominator: Basic earnings (loss) per common share | $ 0 | $ 0 |
Denominator: Weighted average common shares outstanding, Diluted | 130,453,333 | 2,000,000 |
Denominator: Preferred shares | 20,000,000 | |
Denominator: Convertible debt | ||
Denominator: Adjusted weighted average common shares outstanding, Diluted | 130,453,333 | 20,000,000 |
Denominator: Diluted earnings (loss) per common share | $ 0 | $ 0 |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Net income (loss) | $ 145,866 | $ (40,044) | |
Cash provided by operating activities | 2,121 | $ 48,775 | |
Working capital deficit | 523,175 | ||
Accumulated deficit | $ 419,748 | $ 273,882 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Franchise Agreement [Member] | ||
Lease expiration date | Feb. 29, 2024 | |
Lease renewal term | 5 years | |
Lease description | The Company is obligated to pay 5% of gross revenue for use of systems and manuals. | |
Amount paid under agreement | $ 4,151 | $ 5,216 |
Uniform Supply Agreement [Member] | ||
Lease description | The Company is obligated to provide a 3% donation to the charter school for each school year. The agreement is for each school year ending through May 31, 2019. | |
Amount paid under agreement | $ 0 | $ 22,440 |
Fixed Assets and Finance Leas_3
Fixed Assets and Finance Lease Right of Use Assets (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 11,819 | $ 8,389 |
Fixed Assets and Finance Leas_4
Fixed Assets and Finance Lease Right of Use Assets - Schedule of Fixed Assets (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Less: accumulated depreciation | $ (233,308) | $ (221,489) |
Property and equipment, net | 211,730 | 223,549 |
Equipment [Member] | ||
Property and Equipment, Gross | 368,869 | 353,539 |
Furniture and Equipment [Member] | ||
Property and Equipment, Gross | 10,489 | 25,819 |
Autos and Trucks [Member] | ||
Property and Equipment, Gross | $ 65,680 | $ 65,680 |
Note Payable (Details Narrative
Note Payable (Details Narrative) | Apr. 01, 2018USD ($)Integer | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Note payable | $ 9,234 | $ 10,588 | |
Number of payments | Integer | 84 | ||
Debt instrument, monthly payment | $ 412 | ||
Debt instrument, maturity date | Mar. 10, 2021 | ||
Note payable | $ 4,534 | $ 4,581 | |
Vehicle [Member] | |||
Debt instrument, loan amount | $ 34,628 |
Convertible Note Payable (Detai
Convertible Note Payable (Details Narrative) - USD ($) | Apr. 01, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 |
Proceeds from convertible promissory note payable | $ 106,092 | |||
Note balance | 106,092 | |||
Debt instrument, fee amount | $ 53,046 | |||
Interest expense debt | 25,849 | |||
Change in fair value of derivative liability | $ 12,452 | |||
Common stock lowest percentage | 35.00% | |||
Risk Free Rate [Member] | ||||
Fair value assumptions, measurement input, percentages | 2.40% | |||
Volatility [Member] | ||||
Fair value assumptions, measurement input, percentages | 100.00% | |||
First Tranche [Member] | ||||
Proceeds from convertible promissory note payable | $ 48,697 | |||
Additional Tranche [Member] | ||||
Proceeds from convertible promissory note payable | $ 57,395 |
Finance Leases - (Details Narra
Finance Leases - (Details Narrative) - USD ($) | Nov. 17, 2016 | Mar. 31, 2019 |
Leases [Abstract] | ||
Finance lease payment | $ 2,668 | |
Finance lease payment term | 3 years | |
Finance lease obligation reduced amount | $ 18,678 |
Accrued Expenses (Details Narra
Accrued Expenses (Details Narrative) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accrued expenses | $ 362,450 | $ 492,117 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Credit cards payable | $ 171,185 | $ 197,153 |
Accrued stock compensation | 131,250 | |
Accrued officer salary | 115,000 | 85,000 |
Accrued interest | 53,046 | 43,745 |
Other accrued expenses | 23,219 | 34,969 |
Accrued expenses | $ 362,450 | $ 492,117 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Feb. 28, 2019 | May 01, 2018 | Apr. 30, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 |
Accounts payable | $ 78,563 | $ 92,060 | ||||
Due to related party | 53,400 | 50,000 | ||||
Stock-based compensation | 106,250 | |||||
Prepaid expense | 137,500 | |||||
Consulting Agreement [Member] | 1 Year Term [Member] | ||||||
Term of agreement | 1 year | |||||
Number of shares issued for services, shares | 2,250,000 | |||||
Stock-based compensation | 56,250 | 0 | ||||
Prepaid expense | 37,500 | 0 | ||||
Consulting Agreement [Member] | 6 Months [Member] | ||||||
Term of agreement | 6 months | |||||
Number of shares issued for services, shares | 1,500,000 | |||||
Stock-based compensation | 50,000 | 0 | ||||
Prepaid expense | 100,000 | 0 | ||||
Ardell D. Mees [Member] | ||||||
Due to related party | 53,400 | |||||
Ardell D. Mees [Member] | Employment Agreement [Member] | ||||||
Due to related party | 57,500 | 42,500 | ||||
Term of agreement | 2 years | |||||
Annual base salary | $ 60,000 | |||||
Marc Johnson [Member] | Employment Agreement [Member] | ||||||
Due to related party | 57,500 | 42,500 | ||||
Term of agreement | 2 years | |||||
Annual base salary | $ 60,000 | |||||
M&M Real Estate, Inc [Member] | ||||||
Rent expense | 19,500 | 19,500 | ||||
Accounts payable | 31,946 | $ 50,401 | ||||
Purchases from related party | $ 11,425 | $ 1,919 | ||||
Markup Percentage of sales | 10.00% | |||||
Haltom City [Member] | ||||||
Monthly lease payment | $ 6,500 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - $ / shares | Feb. 28, 2019 | May 01, 2018 | Mar. 31, 2019 | Dec. 31, 2018 | May 31, 2013 |
Common stock, shares authorized | 800,000,000 | 800,000,000 | 800,000,000 | ||
Preferred stock, shares authorized | 80,000,000 | 80,000,000 | 80,000,000 | ||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||
Common stock, shares outstanding | 131,770,000 | 128,020,000 | |||
Preferred stock, shares outstanding | 2,000,000 | 2,000,000 | |||
Preferred stock shares voting rights description | Each share of preferred stock has 100 votes per share and is convertible into 10 shares of common stock. | ||||
Number of preferred stock shares converted | 10 | ||||
Consulting Agreement [Member] | 1 Year Term [Member] | |||||
Term of agreement | 1 year | ||||
Stock issued for services, shares | 2,250,000 | ||||
Consulting Agreement [Member] | 6 Months [Member] | |||||
Term of agreement | 6 months | ||||
Stock issued for services, shares | 1,500,000 |
Concentration of Customer (Deta
Concentration of Customer (Details Narrative) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Accounts Receivable [Member] | ||
Concentration risk percentage | 10.00% | 10.00% |
One Customer [Member] | Revenues [Member] | ||
Concentration risk percentage | 38.00% | 39.00% |
Lease Liability (Details Narrat
Lease Liability (Details Narrative) | 3 Months Ended | |
Mar. 31, 2019USD ($)ft² | Dec. 31, 2018USD ($) | |
Operating lease liabilities | $ 164,838 | |
Long term operating lease | 24,319 | |
Operating lease expense | $ 43,967 | |
Weighted-average remaining lease term | 1 year 2 months 12 days | |
Weighted-average discount rate for operating leases | 6.50% | |
Haltom City [Member] | ||
Office area | ft² | 18,000 | |
Lease expiration date | Jun. 1, 2020 | |
Arlington [Member] | ||
Office area | ft² | 6,000 | |
Lease expiration date | Jun. 1, 2020 |
Lease Liability - Schedule of F
Lease Liability - Schedule of Future Minimum Payments of Operating Lease (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
2019 | $ 147,096 | |
2020 | 24,516 | |
Total lease payments | 171,612 | |
Less: interest | (6,774) | |
Present value of lease liabilities | 164,838 | |
Current-portion operating lease liability | 140,519 | |
Long-term portion operating lease liability | 24,319 | |
Facilities [Member] | ||
2019 | 69,096 | |
2020 | 11,516 | |
Total lease payments | 80,612 | |
Less: interest | (3,182) | |
Present value of lease liabilities | 77,430 | |
Current-portion operating lease liability | 66,007 | |
Long-term portion operating lease liability | 11,423 | |
Related Party [Member] | ||
2019 | 78,000 | |
2020 | 13,000 | |
Total lease payments | 91,000 | |
Less: interest | (3,592) | |
Present value of lease liabilities | 87,408 | |
Current-portion operating lease liability | 74,512 | |
Long-term portion operating lease liability | $ 12,896 |