Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Jun. 10, 2019 | |
Registrant Name | AMERICAN REBEL HOLDINGS INC | |
Registrant CIK | 0001648087 | |
SEC Form | 10-Q | |
Period End date | Mar. 31, 2019 | |
Fiscal Year End | --12-31 | |
Tax Identification Number (TIN) | 47-3892903 | |
Number of common stock shares outstanding | 30,312,058 | |
Filer Category | Non-accelerated Filer | |
Current with reporting | Yes | |
Shell Company | false | |
Small Business | true | |
Emerging Growth Company | true | |
Ex Transition Period | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 000-55728 | |
Entity Incorporation, State or Country Code | NV | |
Entity Interactive Data Current | No | |
Address of principal executive offices | ||
Entity Address, Address Description | Address of principal executive offices | |
Entity Address, Address Line One | 718 Thompson Lane, Suite 108-199 | |
Entity Address, City or Town | Nashville | |
Entity Address, State or Province | TN | |
Entity Address, Postal Zip Code | 37204 | |
Phone Fax Number Description | Registrant’s telephone number, including area code | |
City Area Code | 833 | |
Local Phone Number | 267-3235 | |
Copies of communications to | ||
Contact Personnel Name | Anthony N. DeMint, Esq. | |
Entity Address, Address Line One | DeMint Law, PLLC | |
Entity Address, Address Line Two | 3753 Howard Hughes Parkway | |
Entity Address, Address Line Three | Second Floor, Suite 314 | |
Entity Address, City or Town | Las Vegas | |
Entity Address, State or Province | NV | |
Entity Address, Postal Zip Code | 89169 | |
Phone Fax Number Description | Copies of communications to | |
City Area Code | 702 | |
Local Phone Number | 714-0889 |
Consolidated Balance Sheets (Ma
Consolidated Balance Sheets (March 31, 2019 unaudited) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 80,483 | $ 19,631 |
Accounts Receivable | 0 | 682 |
Prepaid expense | 170,195 | 117,300 |
Inventory | 718,467 | 520,154 |
Inventory deposits | 111,650 | 248,729 |
Total Current Assets | 1,080,795 | 906,496 |
Property and Equipment, net | 113,511 | 129,018 |
OTHER ASSETS: | ||
Lease Deposit | 6,841 | 6,841 |
Total Other Assets | 6,841 | 6,841 |
TOTAL ASSETS | 1,201,147 | 1,042,355 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expense | 324,552 | 319,623 |
Accrued Interest - Convertible Debenture - Related Party | 221,049 | 171,786 |
Loan - Officer - Related party | 16,588 | 16,588 |
Loan - Working Capital, net of discounts of $45,666 and $0 | 1,681,749 | 1,165,787 |
Loans - Nonrelated parties | 111,808 | 120,993 |
Total Current Liabilities | 2,355,746 | 1,794,777 |
Convertible Debenture -Related party, net of discounts of $204,610 and $227,110 | 140,390 | 117,890 |
TOTAL LIABILITIES | 2,496,136 | 1,912,667 |
STOCKHOLDERS' EQUITY (DEFICIT): | ||
Preferred Stock, Value | 0 | 0 |
Common Stock, Value | 30,312 | 29,912 |
Additional paid in capital | 6,720,881 | 6,387,335 |
Accumulated deficit | (8,046,182) | (7,287,559) |
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | (1,294,989) | (870,312) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ 1,201,147 | $ 1,042,355 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (March 31, 2019 unaudited) - Parenthetical - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Details | ||
Debt Instrument, Unamortized Discount, Current | $ 45,666 | $ 0 |
Debt Instrument, Unamortized Discount, Noncurrent | $ 204,610 | $ 227,110 |
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 1,000,000 | 1,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares, Issued | 30,312,058 | 29,912,058 |
Common Stock, Shares, Outstanding | 30,312,058 | 29,912,058 |
Consolidated Statements of Oper
Consolidated Statements of Operations (unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Details | ||
Revenue | $ 70,015 | $ 28,316 |
Cost of goods sold | 28,299 | 11,605 |
Gross margin | 41,716 | 16,711 |
Expenses: | ||
Consulting - business development | 248,037 | 129,882 |
Product development costs | 41,133 | 7,936 |
Marketing and brand development costs | 179,160 | 223,154 |
Administrative and other | 95,333 | 181,097 |
Depreciation expense | 15,507 | 15,507 |
Operating income (loss) | (537,454) | (540,866) |
Other Income (Expense) | ||
Interest expense | (221,169) | (86,491) |
Net income (loss) before income tax provision | (758,623) | (627,357) |
Provision for income tax | 0 | 0 |
Net income (loss) | $ (758,623) | $ (627,357) |
Basic and diluted income (loss) per share | $ (0.03) | $ (0.03) |
Weighted average common shares outstanding - basic and diluted | 30,208,000 | 24,160,000 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Deficit (unaudited) - USD ($) | Common Stock | Additional Paid-in Capital | Retained Earnings | Total |
Equity Balance, Starting at Dec. 31, 2017 | $ 23,771 | $ 3,022,947 | $ (5,285,855) | $ (2,239,137) |
Shares Outstanding, Starting at Dec. 31, 2017 | 23,771,000 | |||
Shares Granted, Value, Share-based Payment Arrangement, after Forfeiture | $ 467 | 262,867 | 0 | 263,334 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 466,667 | |||
Net Income (Loss) | $ 0 | 0 | (627,357) | (627,357) |
Shares Outstanding, Ending at Mar. 31, 2018 | 24,237,667 | |||
Equity Balance, Ending at Mar. 31, 2018 | $ 24,238 | 3,285,814 | (5,913,212) | (2,603,160) |
Equity Balance, Starting at Dec. 31, 2018 | $ 29,912 | 6,387,335 | (7,287,559) | (870,312) |
Shares Outstanding, Starting at Dec. 31, 2018 | 29,912,058 | |||
Shares Granted, Value, Share-based Payment Arrangement, after Forfeiture | $ 400 | 232,100 | 0 | 232,500 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 400,000 | |||
Net Income (Loss) | $ 0 | 0 | (758,623) | (758,623) |
Convertible Debenture Discount | $ 0 | 101,446 | 0 | 101,446 |
Shares Outstanding, Ending at Mar. 31, 2019 | 30,312,058 | |||
Equity Balance, Ending at Mar. 31, 2019 | $ 30,312 | $ 6,720,881 | $ (8,046,182) | $ (1,294,989) |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows (unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CASH FLOW FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ (758,623) | $ (627,357) |
Depreciation | 15,507 | 16,340 |
Compensation paid through issuance of common stock | 80,000 | 157,483 |
Amortization of loan discount | 153,280 | 5,000 |
Adjustments to reconcile net loss to cash (used in) operating activities: | ||
Change in accounts receivable | 682 | 0 |
Change in prepaid expenses | 27,105 | 75,086 |
Change in inventory | (198,313) | 6,928 |
Change in inventory deposits | 137,079 | (100,000) |
Change in accounts payable and accrued expense | 54,192 | 176,025 |
Net Cash (Used in) Operating Activities | (489,091) | (290,495) |
CASH FLOW FROM INVESTING ACTIVITIES: | ||
Property and equipment purchased | 0 | 0 |
Net Cash (Used in) Investing Activities | 0 | 0 |
CASH FLOW FROM FINANCING ACTIVITIES: | ||
Proceeds (repayments) of loans - officer - related party | 0 | (6,430) |
Proceeds of convertible debentures | 0 | 25,000 |
Proceeds of exercise of Warrants | 2,500 | 0 |
Proceeds of working capital loan | 612,000 | 250,000 |
Repayment of loans - nonrelated party | (64,556) | (28,383) |
Net Cash Provided by Financing Activities | 549,944 | 240,187 |
CHANGE IN CASH | 60,853 | (50,308) |
Cash and Cash Equivalents, at Carrying Value, Beginning Balance | 19,631 | 70,798 |
Cash and Cash Equivalents, at Carrying Value, Ending Balance | 80,483 | 20,490 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Interest | 18,626 | 18,047 |
Income taxes | 0 | 0 |
Non-cash investing and financing activities: | ||
Investment eliminated through merger and consolidation | $ 0 | $ 0 |
Note 1 - Summary of Significant
Note 1 - Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Notes | |
Note 1 - Summary of Significant Accounting Policies | NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization The “Company” was incorporated on December 15, 2014 (date of inception) under the laws of the State of Nevada, as CubeScape, Inc. Effective January 5, 2017, the Company amended its articles of incorporation and changed its name to American Rebel Holdings, Inc. The Company completed a business combination with its majority stockholder, American Rebel, Inc. on June 19, 2017. As a result, American Rebel, Inc. became a wholly owned subsidiary of the Company. The acquisition of American Rebel, Inc. was accounted for as a reverse merger. The Company issued 17,421,000 shares of its common stock and issued warrants to purchase 500,000 shares of common stock to shareholders of American Rebel, Inc. and cancelled 9,000,000 shares of common stock owned by American Rebel, Inc. The Company filed a registration statement on Form S-1 which was declared effective by the U.S. Securities and Exchange Commission on October 14, 2015. Twenty six (26) investors invested at a price of $0.01 per share for a total of $60,000. The direct public offering closed on December 11, 2015. Nature of operations The Company is developing branded products in the self-defense and patriotic product areas that are promoted and sold using personal appearance, music, Internet and television avenues. The Company’s products will be under the American Rebel Brand and imprinted. Interim Financial Statements and Basis of Presentation The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) set forth in Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by the U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These financial statements should be read along with the Annual Report filed on Form 10-K of the Company for the period ended December 31, 2018 and notes thereto contained. Principles of Consolidation The Consolidated Financial Statements include the accounts of the Company and its majority-owned subsidiary. All significant intercompany accounts and transactions have been eliminated. Year end The Company’s year-end is December 31. Cash and cash equivalents For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value. Inventory and Inventory Deposits Inventory consists of backpacks, jackets and accessories manufactured to our design and held for resale and are carried at the lower of cost (First-in, First-out Method) or market value. The Company determines the estimate for the reserve for slow moving or obsolete inventories by regularly evaluating individual inventory levels, projected sales and current economic conditions. The Company also makes deposit payments on inventory to be manufactured that are carried separately until the goods are received into inventory. Fixed assets and depreciation Property and equipment is stated at cost net of accumulated depreciation. Additions and improvements are capitalized while ordinary maintenance and repair expenditures are charged to expense as incurred. Depreciation is recorded by the straight-line method over the estimated useful life of the asset, which ranges from five to seven years. Revenue recognition We recognize revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the product or service has been provided to the consumer; (3) the amount of fees to be paid by the consumer is fixed or determinable; and (4) the collection of our fees or product revenue is probable. The Company will record revenue when it is realizable and earned and product has been shipped to the consumers or that our service has been rendered to the consumer. License income will be reported as income when the Company has completed any responsibility to earn the income and when any earned royalties are received. Advertising costs Advertising costs are expensed as incurred; Marketing costs incurred were $179,160 and $223,154 for the three-month periods ended March 31, 2019 and 2018, respectively. Fair Value of Financial Instruments Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of March 31, 2019 and December 31, 2018, respectively. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand. Level 1: Level 2: FASB acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. To deal with this shortage of direct data, the board provided a second level of inputs that can be applied in three situations. Level 3: If inputs from levels 1 and 2 are not available, the Financial Accounting Standards Board (the “FASB”) acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date”. Earlier in the standard, FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants. Stock-based compensation The Company records stock based compensation in accordance with the guidance in ASC Topic 505 and 718 which requires the Company to recognize expense related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award. The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718-10 and the conclusions reached by the FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50. In January 2018, the Company agreed to issue and subsequently issued a total of 500,000 shares of common stock as compensation for professional services to be performed during 2018. The common stock was valued at a price of $0.50 per share consistent with earlier sales of common stock by American Rebel, Inc. as well as the present conversion price of the Company’s convertible debentures. In January, 2018, the Company issued 300,000 shares of common stock as compensation in settlement of professional services billed at $180,000. During January 2018, the Company recorded $157,483 in compensation expense, increased prepaid expense $31,251, and reduced Accrued expense $74,600 with the issuance of 466,667 shares of common stock. The common stock was valued at prices of $0.50 and $0.60 per share consistent with earlier sales of common stock by American Rebel, Inc. as well as the present conversion price of the Company’s convertible debentures and negotiation with a vendor. During January 2019, the Company recorded $178,505 in compensation expense, increased prepaid expense $80,000, and increased Discount on debt $57,467 with the issuance of 400,000 shares of common stock and 175,000 warrants to purchase common stock. The common stock was valued at prices of $0.65 to $0.76 per share consistent with market prices at the date of the transaction. Earnings per share The Company follows ASC Topic 260 to account for earnings per share. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation. Income taxes The Company follows ASC Topic 740 for recording provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expense or benefit is based on the changes in the asset or liability for each period. If available evidence suggests that it is more likely than not that some portion or the entire deferred tax asset will not be realized, a valuation allowance is required to reduce the deferred tax asset to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income tax in the period of change. Deferred income tax may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. The Company applies a more-likely-than-not recognition threshold for all tax uncertainties. ASC Topic 740 only allows the recognition of tax benefits that have a greater than fifty percent likelihood of being sustained upon examination by taxing authorities. As of March 31, 2019 and December 31, 2018, the Company reviewed its tax positions and determined there were no outstanding, or retroactive tax positions with less than a 50% likelihood of being sustained upon examination by the taxing authorities, therefore this standard has not had a material effect on the Company. The Company does not anticipate any significant changes to its total unrecognized tax benefits within the next 12 months. The Company classifies tax-related penalties and net interest as income tax expense. For the three month period ended March 31, 2019 and 2018, respectively, no income tax expense has been recorded. Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates. Recent pronouncements The Company evaluated recent accounting pronouncements through March 31, 2019 and believes that none have a material effect on the Company’s financial statements except for the following. In August 2015, FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of Effective Date Revenue from Contracts with Customers, In September 2015, the FASB issued ASU 2015-16, Business Combinations: Simplifying the Accounting for Measurement-Period Adjustments In February 2016, the FASB issued ASU No. 2016-02, Leases In August 2016, the FASB issued ASU 2016-15, Clarification on Classification of Certain Cash Receipts and Cash Payments on the Statement of Cash Flows In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows - Restricted Cash (Topic 230), In May 2017, the FASB issued ASU 2017-09, Stock Compensation (Topic 718)-Scope of Modification Accounting In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260)-Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815)-Targeted Improvements to Accounting for Hedging Activities. Amendments clarifying guidance in Topic 205, Risks and Uncertainties, are applicable to entities that have not commenced planned principal operations, which we have commenced recently. |
Note 2 - Going Concern
Note 2 - Going Concern | 3 Months Ended |
Mar. 31, 2019 | |
Notes | |
Note 2 - Going Concern | NOTE 2 – GOING CONCERN The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. As noted above, the Company is in the development stage and, accordingly, has not yet generated significant revenues from operations. Since inception, the Company has been engaged in financing activities and executing its business plan of operations and incurring costs and expenses related to developing products and market identity, obtaining inventory and preparing for public product launch. As a result, the Company incurred net income (losses) for the three months ended March 31, 2019 and 2018 of ($758,623) and ($627,357), respectively. The Company’s accumulated deficit was ($8,046,182) as of March 31, 2019 and ($7,287,559) as of December 31, 2018. The Company’s working capital deficit was ($1,274,951) as of March 31, 2019 and a deficit of ($888,280) as of December 31, 2018. In addition, the Company’s development activities since inception have been sustained through equity and debt financing and the deferral of payments on accounts payable and other expenses. The ability of the Company to continue as a going concern is dependent upon its ability to raise capital from the sale of its equity and, ultimately, the achievement of operating revenues. Management believes holders of its warrants will execute their outstanding warrants generating investment capital for the Company. Management is also in discussion with several investment banks and broker dealers regarding the initiation of a capital campaign. Management believes sufficient funding can be secured through the obtaining of loans, as well as future offerings of its preferred and common stock to institutional and other financial sources. However, no assurance can be given that the Company will obtain this additional working capital, or if obtained, that such funding will not cause substantial dilution its stockholders. If the Company is unable to secure such additional funds from these sources, it may be forced to change or delay its business plan rollout. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty. |
Note3 - Inventory and Deposits
Note3 - Inventory and Deposits | 3 Months Ended |
Mar. 31, 2019 | |
Notes | |
Note3 - Inventory and Deposits | NOTE 3- INVENTORY AND DEPOSITS Inventory and deposits includes the following: March 31, 2019 (unaudited) December 31, 2018 (audited) Inventory - Finished goods $ 718,467 $ 520,154 Inventory deposits 111,650 248,729 830,117 768,883 Less: Reserve for excess and obsolete - - Net inventory and deposits $ 830,117 $ 768,883 |
Note 4 - Property and Equipment
Note 4 - Property and Equipment | 3 Months Ended |
Mar. 31, 2019 | |
Notes | |
Note 4 - Property and Equipment | NOTE 4 – PROPERTY AND EQUIPMENT Property and equipment includes the following: March 31, 2019 (unaudited) December 31, 2018 (audited) Marketing equipment $ 32,261 $ 32,261 Vehicles 277,886 277,886 310,147 310,147 Less: Accumulated depreciation (196,636) (181,129) Net property and equipment $ 113,511 $ 129,018 For the three months ended March 31, 2019 and 2018 we recognized $15,507 and $15,507 in depreciation expense, respectively. We depreciate these assets over a period of sixty (60) months which has been deemed their useful life. In January, 2016 we acquired three vehicles from related parties and assumed the debt secured by the vehicles as described at Note 7 – Notes Payable. Accordingly, the recorded cost of each vehicle is the amount of debt assumed under each related loan, or a total of $277,886. |
Note 5 - Related Party Note Pay
Note 5 - Related Party Note Payable and Related Party Transactions | 3 Months Ended |
Mar. 31, 2019 | |
Notes | |
Note 5 - Related Party Note Payable and Related Party Transactions | NOTE 5 –RELATED PARTY NOTE PAYABLE AND RELATED PARTY TRANSACTIONS For the year ended December 31, 2016, the Company received loans from its sole officer and director totaling $221,155. The balance at December 31, 2018 was $16,588. During the three months ended March 31, 2019, the company repaid $0 of these loans resulting in a balance at March 31, 2019 of $16,588. These loans are due on demand and carry no interest. During the year ended December 31, 2018, the Company entered into several convertible debt instruments with stockholders in the amount of $270,000, for a total of $345,000. The Company accrued interest expense on this convertible debt of $137,714, for a total of $40,698 at March 31, 2019. Since public trading of the Company’s common stock began in 2018, the Company determined a Beneficial Conversion Discount of $270,000 applied to the 2018 sales the Convertible Debentures. The discount reduced the liability balance of the debentures to $0 when the debentures were issued and recorded the proceeds of the sale as Additional paid in Capital. The discount will be amortized over the three year term of the debentures. The discounted balance of the convertible debentures at March 31, 2019 was $140,390. During the year ended December 31, 2018, holders of convertible debentures exercised their rights to convert the debt of $2,060,000 and accrued interest of $280,529 to 4,681,058 shares of common stock. Of the total amount borrowed under the convertible debt and exercise of warrants, $2,664,787 was loaned to American Rebel, Inc., the Company’s former majority stockholder and now the Company’s wholly owned subsidiary, as a working capital loan to pay its operating expenses including legal, accounting, product development, brand expansion, and marketing costs. This loan is eliminated in consolidation. Charles A. Ross, Jr. serves as the Company’s sole officer and director. Compensation for Mr. Ross was $53,500 and $50,000, respectively for the three months ended March 31, 2019 and 2018. |
NOTE 6 - NOTES PAYABLE - NONREL
NOTE 6 - NOTES PAYABLE - NONRELATED PARTIES | 3 Months Ended |
Mar. 31, 2019 | |
Notes | |
NOTE 6 - NOTES PAYABLE - NONRELATED PARTIES | NOTE 6 – NOTES PAYABLE – NONRELATED PARTIES Effective January 1, 2016, the Company acquired three vehicles from various related parties in exchange for the assumption of the liabilities related to those vehicles. The liabilities assumed are as follows at March 31, 2019 and December 31, 2018. March 31, 2019 (unaudited) December 31, 2018 (audited) Loan secured by a tour bus, payable in monthly payments of $2,710 including interest at 12% per annum through June 2020. $ 43,764 $ 52,929 Loan secured by a promotional vehicle. Loan is past due, payments are made at irregular intervals and interest expense accrues at 3% per month until paid in full. 68,044 68,044 Total recorded as current liability $ 111,808 $ 120,993 Current and long-term portion. Total loan balance is reported as current because loans are past due, become due within one year or are expected to be repaid within one year. |
Note 8 - Notes Payable - Workin
Note 8 - Notes Payable - Working Capital | 3 Months Ended |
Mar. 31, 2019 | |
Notes | |
Note 8 - Notes Payable - Working Capital | NOTE 7 – NOTES PAYABLE – WORKING CAPITAL On July 6, 2017, the Company’s wholly-owned operating subsidiary completed the sale of a secured promissory note in the principal amount of $250,000 with an interest rate of 12% per annum to a private investor, and current stockholder. In April, 2018 the Company’s wholly-owned operating subsidiary completed the sale of additional notes under similar terms in the additional principal amount totaling $250,000. In July, 2018 the Company’s wholly-owned operating subsidiary completed the sale of additional notes under similar terms in the additional principal amount totaling $300,000. In October and December, 2018 the Company’s wholly-owned operating subsidiary completed the sale of additional notes under similar terms in the additional principal amount totaling $425,000. The notes are secured by a pledge of certain of the Company’s current inventory and the chief executive officer’s personal guaranty. These working capital notes require payments equal to 75-100% of current sales of that specific secured inventory and mature in 180 days. In connection with the original note, the Company issued 250,000 shares of its common stock to the note holder valued at $0.50 per share for a total of $125,000. The fair value of the common stock issued was recorded as a discount to the note payable and the discount was amortized over the term of that agreement to interest expense using the straight-line method that approximates the effective interest method. During the three months ending March 31, 2019, the Company and the Company’s wholly-owned operating subsidiary completed the sale of additional short term notes under similar terms in the additional principal amount totaling $612,000. The notes are secured by a pledge of certain of the Company’s current inventory and the chief executive officer’s personal guaranty. These short term working capital notes mature in 30-120 days. In connection with these notes, the Company issued 100,000 shares of its common stock, warrants to purchase 75,000 shares of its common stock and a conversion feature for 300,000 shares at $0.50 per share. The fair value of these share incentives was calculated to be $171,446. The fair value of the share incentives was recorded as a discount to the note payable and the discount was amortized over the term of those agreements to interest expense using the straight-line method that approximates the effective interest method. Interest expense recorded as a result of amortization of discount for the three months ended March 31, 2019 is $125,781. As of March 31, 2019 and December 31, 2018, the outstanding balance due on the working capital notes was $1,681,749 and $1,165,787, respectively. |
Note 8 - Convertible Debenture,
Note 8 - Convertible Debenture, Related Party | 3 Months Ended |
Mar. 31, 2019 | |
Notes | |
Note 8 - Convertible Debenture, Related Party | NOTE 8- CONVERTIBLE DEBENTURE – RELATED PARTY Since September 16, 2016, the Company sold convertible debentures in the amount of $2,405,000 in the form of 12% three-year convertible term notes. Interest is accrued at an annual rate of 12% and is payable in common stock at maturity. Both principal and interest may be converted into common stock at a price of $0.50 per share after the passage of 181 days. The Company may redeem the debenture at its option or force conversion after common stock trades at a price in excess of $1.00 per share for five days. The Holder may force redemption after the Company raises $3 million dollars in equity. The holders of the convertible debentures were issued three year warrants to purchase 2,405,000 shares of the Company’s common stock at $1.00 per share. As of December 31, 2018, the Company received $2,405,000 under this convertible debenture. In April and November, 2018, debentures with face value of $2,060,000 plus accrued interest of $280,529 were converted into 4,681,058 shares of common stock. As of December 31, 2018, the Company had a face value of $345,000 due under this convertible debenture. The convertible debenture holder, based on its agreement, with maturities beginning September 16, 2019 has the option to convert their principal and interest into 690,000 (plus 81,388 for accrued interest) shares of common stock. The fair value of the embedded beneficial conversion feature resulted in no discount to the convertible debenture – related party at December 31, 2018 and a discount of $204,610 at March 31, 2019. During the year ended December 31, 2018, the Company sold convertible debt instruments in the amount of $270,000. Since public trading of the Company’s common stock began in 2018, the Company determined a beneficial conversion discount of $270,000 applied to the 2018 sales the convertible debt instruments. The discount reduced the liability balance of the debentures to $0 when the debentures were issued and recorded the proceeds of the sale as Additional paid in Capital. The discount will be amortized over the three year term of the debentures. The discounted balance of the convertible debentures at March 31, 2019 was $140,390. The Company analyzed the conversion option for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and fair value measurement under ASC 820 and determined that the beneficial conversion feature under the convertible debenture should be recorded as a discount to debt if market was more than the conversion feature. The convertible debenture - related party is measured at fair value at the end of each reporting period or termination of the debenture agreement with the change in fair value recorded to earnings. The fair value of the embedded beneficial conversion feature did not result in a discount to the convertible debenture - related party. The discount if and when we have one will be amortized over the term of agreement or modification to the agreement to interest expense using the straight-line method that approximates the effective interest method. The Company used the eight steps to determine fair value under ASC 820. (1) Identify the item to be valued and the unit of account. (2) Determine the principal or most advantageous market and the relevant market participants. (3) Select the valuation premise to be used for asset measurements. (4) Consider the risk assumptions applicable to liability measurements. (5) Identify available inputs. (6) Select the appropriate valuation technique(s). (7) Make the measurement. (8) Determine amounts to be recognized and information to be disclosed. Fair value was determined by the market price of the Company’s publicly traded stock with no discount allowed. This was determined as of the effective date of the agreement entered convertible debenture - related party. The conversion price was then compared to fair value, determined by market price and the difference between the two multiplied by the number of shares that would be issued upon conversion. Since public trading of the common stock began in 2018, market price of the Company’s traded stock has ranged from $0.15 to $2.50 per share. As of March 31, 2019, the outstanding balance due the convertible debentures holders was $345,000, including $0 in original issue discount or interest. |
Note 9 - Embedded Derivatives -
Note 9 - Embedded Derivatives - Financial Instruments | 3 Months Ended |
Mar. 31, 2019 | |
Notes | |
Note 9 - Embedded Derivatives - Financial Instruments | NOTE 9 – EMBEDDED DERIVATIVES – FINANCIAL INSTRUMENTS Since September 2016 the Company entered into a financial instrument, which consists of a convertible debenture, containing a conversion feature. Generally financial instruments are convertible into shares of the Company’s common stock; at prices that are either marked to the volume weighted average price of the Company’s publicly traded stock or a static price determinative from each financial instrument agreement. These prices may be at a significant discount to market as determined overall by the volume weighted average price of the Company’s publicly traded common stock. The Company for all intent and purposes considers these discounts to be fair market value as would be determined in an arm’s length transaction with a willing buyer and the restrictive nature of the common stock issued, unless issued pursuant to a registration or some other registered shares with the SEC. The Company accounts for the fair value of the conversion feature in accordance with ASC 815-15, Derivatives and Hedging; Embedded Derivatives The fair value of the conversion feature of the financial instrument as of March 31, 2019 was $0. The Company did not record any expense associated with the embedded derivatives at March 31, 2019. No embedded derivative expense was realized as there was no change in the conversion price. |
Note 10 - Income Taxes
Note 10 - Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Notes | |
Note 10 - Income Taxes | NOTE 10 – INCOME TAXES At March 31, 2019 and December 31, 2018, the Company had a net operating loss carryforward of $8,046,182and $7,287,559, respectively, which begins to expire in 2034. Components of net deferred tax asset, including a valuation allowance, are as follows: March 31, 2019 (unaudited) December 31, 2018 (audited) Deferred tax asset: Net operating loss carryforward $ 1,689,698 $ 1,530,387 Total deferred tax asset 1,689,698 1,530,387 Less: Valuation allowance (1,689,698) (1,530,387) Net deferred tax asset $ - $ - Valuation allowance for deferred tax assets as of March 31, 2019 and December 31, 2018 was $1,689,698and $1,530,387, respectively. In assessing the recovery of the deferred tax asset, management considers whether it is more likely than not that some portion or the entire deferred tax asset will not be realized. The ultimate realization of the deferred tax asset is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax assets, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not deferred tax assets will not be realized as of March 31, 2019 and December 31, 2018 and recognized 100% valuation allowance for each period. Reconciliation between the statutory rate and the effective tax rate for both periods and as of December 31, 2018: Federal statutory rate (21.0) % State taxes, net of federal benefit (0.0) % Change in valuation allowance 21.0 % Effective tax rate 0.0 % |
Note 11 - Share Capital
Note 11 - Share Capital | 3 Months Ended |
Mar. 31, 2019 | |
Notes | |
Note 11 - Share Capital | NOTE 11 – SHARE CAPITAL The Company is authorized to issue 100,000,000 shares of its $0.001 par value common stock and 1,000,000 shares of its $0.001 par value preferred stock. Common stock In January 2018, the Company issued 467,667 shares of its common stock to pay professional and consulting fees and recorded an expense based on fair market value of $0.50 and $0.60 per share for a total expense of $263,334. In January 2019, the Company issued a 30 day warrant to purchase 250,000 shares of its common stock at a price of $0.01 per share to pay consulting fees. Total fair value of $160,000 was recorded as an expense of $80,000 at March 31, 2019 and prepaid expense of $80,000 for the remaining three months of the consulting agreement. The warrants were exercised and 250,000 shares of common stock were issued. In January 2019, the Company’s wholly-owned operating subsidiary completed the sale of a secured promissory note in the principal amount of $300,000 with an interest rate of 16.66% per annum to a private investor. The note is secured by a pledge of all of the Company’s current inventory and the chief executive officer’s personal guaranty. This working capital note matures in 120 days. In connection with this note, the Company issued 100,000 shares of its common stock to the note holder. In May 2019, the Company identified 50,000 shares of common stock in its subsidiary that had been awarded at date of incorporation but not recorded by the Company. The share count was corrected to include these shares valued at Par value of $0.001. At March 31, 2019 and December 31, 2018, there were 30,312,058 and 29,912,058 shares of common stock issued and outstanding, respectively. |
Note 12 - Warrants and Options
Note 12 - Warrants and Options | 3 Months Ended |
Mar. 31, 2019 | |
Notes | |
Note 12 - Warrants and Options | NOTE 12 – WARRANTS AND OPTIONS In January 2019, the Company issued three-year and five-year warrants to purchase 75,000 shares of the Company’s common stock at $1.00 per share in conjunction with working capital loans totaling $75,000. As of March 31, 2019, there were 2,320,000 warrants issued and outstanding. As of December 31, 2018, there were 2,245,000 warrants outstanding to acquire additional shares of common stock. The Company evaluates outstanding warrants as derivative liabilities and will recognize any changes in the fair value through earnings. The Company determined that the Warrants have an immaterial fair value at March 31, 2019. The warrants do not trade in a highly active securities market, and as such, the Company estimated the fair value of these common stock equivalents using Black-Scholes and the following assumptions: Expected volatility was based primarily on historical volatility. Historical volatility was computed using daily pricing observations for recent periods. The Company’s common stock has not traded so the volatility computation was based on other similarly situated companies. The Company believes this method produced an estimate that was representative of the Company’s expectations of future volatility over the expected term which due to their maturity period as expiry, it was three years. The Company had no reason to believe future volatility over the expected remaining life of these common stock equivalents was likely to differ materially from historical volatility. Expected life was based on three years due to the expiry of maturity. The risk-free rate was based on the U.S. Treasury rate that corresponded to the expected term of the common stock equivalents. March 31, 2019 (unaudited) December 31, 2018 (audited) Stock Price $ .76 $ .70 Exercise Price $ 1.00 $ 1.00 Term (expected in years) 3.00 3.00 Volatility 266.9% 163.0% Annual Rate of Dividends 0.0% 0.0% Risk Free Rate 2.51% 2.69% Stock Purchase Warrant The following table summarizes all warrant activity for the year ended December 31, 2018 and the three months ended March 31, 2019. Shares Weighted-Average Exercise Price Per Share Remaining term Intrinsic value Outstanding, December 31, 2017 2,635,000 $0.91 1.69 years - Granted 270,000 $1.00 1.35 years - Exercised 660,000 $0.50 - - Expired - - - - Outstanding and Exercisable at December 31, 2018 2,245,000 $0.58 0.93 years - Granted 325,000 $0.24 1.06 years - Exercised 250,000 $0.01 - - Expired - - - - Outstanding and Exercisable at March 31, 2019 2,320,000 $0.59 1.00 years - |
Note 13 - Subsequent Events
Note 13 - Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Notes | |
Note 13 - Subsequent Events | NOTE 13 – SUBSEQUENT EVENTS The Company evaluated all events that occurred after the balance sheet date of March 31, 2019 through the date the financial statements were issued and determined that there were the following subsequent events: Subsequent to March 31, 2019, the Company received an additional $425,000 under a $450,000 working capital loan secured by inventory dated May 1, 2019 that will mature on May 1, 2020 . Subsequent to March 31, 2019, the Company repaid a $25,000 loan that matured on April 15, 2019 and entered into a new loan on May 10, 2019 with the same investor for $50,000 that will mature on August 8, 2019. Subsequent to March 31, 2019, the Company repaid a $50,000 loan that matured on April 2, 2019 and entered into a new loan on April 29, 2019 with the same investor for $50,000 that will mature on October 29, 2019. Subsequent to March 31, 2019, the Company is in negotiations to extend a $130,000 loan that matured on April 5, 2019 and a $55,000 loan that matured March 15, 2019. The Company terminated a social media marketing agreement as of April 1, 2019 and is interviewing other social media marketing companies to potentially engage their assistance with the Company’s social media marketing. |
Note 1 - Summary of Significa_2
Note 1 - Summary of Significant Accounting Policies: Nature of operations (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Policies | |
Nature of operations | Nature of operations The Company is developing branded products in the self-defense and patriotic product areas that are promoted and sold using personal appearance, music, Internet and television avenues. The CompanyÂ’s products will be under the American Rebel Brand and imprinted. |
Note 1 - Summary of Significa_3
Note 1 - Summary of Significant Accounting Policies: Interim Financial Statements and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Policies | |
Interim Financial Statements and Basis of Presentation | Interim Financial Statements and Basis of Presentation The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) set forth in Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by the U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These financial statements should be read along with the Annual Report filed on Form 10-K of the Company for the period ended December 31, 2018 and notes thereto contained. |
Note 1 - Summary of Significa_4
Note 1 - Summary of Significant Accounting Policies: Principles of Consolidation (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Policies | |
Principles of Consolidation | Principles of Consolidation The Consolidated Financial Statements include the accounts of the Company and its majority-owned subsidiary. All significant intercompany accounts and transactions have been eliminated. |
Note 1 - Summary of Significa_5
Note 1 - Summary of Significant Accounting Policies: Year end (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Policies | |
Year end | Year end The CompanyÂ’s year-end is December 31. |
Note 1 - Summary of Significa_6
Note 1 - Summary of Significant Accounting Policies: Cash and cash equivalents (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Policies | |
Cash and cash equivalents | Cash and cash equivalents For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value. |
Note 1 - Summary of Significa_7
Note 1 - Summary of Significant Accounting Policies: Inventory and Inventory Deposits (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Policies | |
Inventory and Inventory Deposits | Inventory and Inventory Deposits Inventory consists of backpacks, jackets and accessories manufactured to our design and held for resale and are carried at the lower of cost (First-in, First-out Method) or market value. The Company determines the estimate for the reserve for slow moving or obsolete inventories by regularly evaluating individual inventory levels, projected sales and current economic conditions. The Company also makes deposit payments on inventory to be manufactured that are carried separately until the goods are received into inventory. |
Note 1 - Summary of Significa_8
Note 1 - Summary of Significant Accounting Policies: Fixed assets and depreciation (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Policies | |
Fixed assets and depreciation | Fixed assets and depreciation Property and equipment is stated at cost net of accumulated depreciation. Additions and improvements are capitalized while ordinary maintenance and repair expenditures are charged to expense as incurred. Depreciation is recorded by the straight-line method over the estimated useful life of the asset, which ranges from five to seven years. |
Note 1 - Summary of Significa_9
Note 1 - Summary of Significant Accounting Policies: Revenue recognition (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Policies | |
Revenue recognition | Revenue recognition We recognize revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the product or service has been provided to the consumer; (3) the amount of fees to be paid by the consumer is fixed or determinable; and (4) the collection of our fees or product revenue is probable. The Company will record revenue when it is realizable and earned and product has been shipped to the consumers or that our service has been rendered to the consumer. License income will be reported as income when the Company has completed any responsibility to earn the income and when any earned royalties are received. |
Note 1 - Summary of Signific_10
Note 1 - Summary of Significant Accounting Policies: Advertising costs (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Policies | |
Advertising costs | Advertising costs Advertising costs are expensed as incurred; Marketing costs incurred were $179,160 and $223,154 for the three-month periods ended March 31, 2019 and 2018, respectively. |
Note 1 - Summary of Signific_11
Note 1 - Summary of Significant Accounting Policies: Fair Value of Financial Instruments (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Policies | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of March 31, 2019 and December 31, 2018, respectively. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand. Level 1: Level 2: FASB acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. To deal with this shortage of direct data, the board provided a second level of inputs that can be applied in three situations. Level 3: If inputs from levels 1 and 2 are not available, the Financial Accounting Standards Board (the “FASB”) acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date”. Earlier in the standard, FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants. |
Note 1 - Summary of Signific_12
Note 1 - Summary of Significant Accounting Policies: Stock-based compensation (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Policies | |
Stock-based compensation | Stock-based compensation The Company records stock based compensation in accordance with the guidance in ASC Topic 505 and 718 which requires the Company to recognize expense related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award. The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718-10 and the conclusions reached by the FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50. In January 2018, the Company agreed to issue and subsequently issued a total of 500,000 shares of common stock as compensation for professional services to be performed during 2018. The common stock was valued at a price of $0.50 per share consistent with earlier sales of common stock by American Rebel, Inc. as well as the present conversion price of the CompanyÂ’s convertible debentures. In January, 2018, the Company issued 300,000 shares of common stock as compensation in settlement of professional services billed at $180,000. During January 2018, the Company recorded $157,483 in compensation expense, increased prepaid expense $31,251, and reduced Accrued expense $74,600 with the issuance of 466,667 shares of common stock. The common stock was valued at prices of $0.50 and $0.60 per share consistent with earlier sales of common stock by American Rebel, Inc. as well as the present conversion price of the CompanyÂ’s convertible debentures and negotiation with a vendor. During January 2019, the Company recorded $178,505 in compensation expense, increased prepaid expense $80,000, and increased Discount on debt $57,467 with the issuance of 400,000 shares of common stock and 175,000 warrants to purchase common stock. The common stock was valued at prices of $0.65 to $0.76 per share consistent with market prices at the date of the transaction. |
Note 1 - Summary of Signific_13
Note 1 - Summary of Significant Accounting Policies: Earnings per share (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Policies | |
Earnings per share | Earnings per share The Company follows ASC Topic 260 to account for earnings per share. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation. |
Note 1 - Summary of Signific_14
Note 1 - Summary of Significant Accounting Policies: Income taxes (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Policies | |
Income taxes | Income taxes The Company follows ASC Topic 740 for recording provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expense or benefit is based on the changes in the asset or liability for each period. If available evidence suggests that it is more likely than not that some portion or the entire deferred tax asset will not be realized, a valuation allowance is required to reduce the deferred tax asset to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income tax in the period of change. Deferred income tax may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. The Company applies a more-likely-than-not recognition threshold for all tax uncertainties. ASC Topic 740 only allows the recognition of tax benefits that have a greater than fifty percent likelihood of being sustained upon examination by taxing authorities. As of March 31, 2019 and December 31, 2018, the Company reviewed its tax positions and determined there were no outstanding, or retroactive tax positions with less than a 50% likelihood of being sustained upon examination by the taxing authorities, therefore this standard has not had a material effect on the Company. The Company does not anticipate any significant changes to its total unrecognized tax benefits within the next 12 months. The Company classifies tax-related penalties and net interest as income tax expense. For the three month period ended March 31, 2019 and 2018, respectively, no income tax expense has been recorded. |
Note 1 - Summary of Signific_15
Note 1 - Summary of Significant Accounting Policies: Use of estimates (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Policies | |
Use of estimates | Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates. |
Note 1 - Summary of Signific_16
Note 1 - Summary of Significant Accounting Policies: Recent pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Policies | |
Recent pronouncements | Recent pronouncements The Company evaluated recent accounting pronouncements through March 31, 2019 and believes that none have a material effect on the CompanyÂ’s financial statements except for the following. In August 2015, FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of Effective Date Revenue from Contracts with Customers, In September 2015, the FASB issued ASU 2015-16, Business Combinations: Simplifying the Accounting for Measurement-Period Adjustments In February 2016, the FASB issued ASU No. 2016-02, Leases In August 2016, the FASB issued ASU 2016-15, Clarification on Classification of Certain Cash Receipts and Cash Payments on the Statement of Cash Flows In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows - Restricted Cash (Topic 230), In May 2017, the FASB issued ASU 2017-09, Stock Compensation (Topic 718)-Scope of Modification Accounting In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260)-Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815)-Targeted Improvements to Accounting for Hedging Activities. Amendments clarifying guidance in Topic 205, Risks and Uncertainties, are applicable to entities that have not commenced planned principal operations, which we have commenced recently. |
Note3 - Inventory and Deposits_
Note3 - Inventory and Deposits: Schedule of Inventory (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Tables/Schedules | |
Schedule of Inventory | March 31, 2019 (unaudited) December 31, 2018 (audited) Inventory - Finished goods $ 718,467 $ 520,154 Inventory deposits 111,650 248,729 830,117 768,883 Less: Reserve for excess and obsolete - - Net inventory and deposits $ 830,117 $ 768,883 |
Note 4 - Property and Equipme_2
Note 4 - Property and Equipment: Schedule of Property, Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Tables/Schedules | |
Schedule of Property, Plant and Equipment | March 31, 2019 (unaudited) December 31, 2018 (audited) Marketing equipment $ 32,261 $ 32,261 Vehicles 277,886 277,886 310,147 310,147 Less: Accumulated depreciation (196,636) (181,129) Net property and equipment $ 113,511 $ 129,018 |
NOTE 6 - NOTES PAYABLE - NONR_2
NOTE 6 - NOTES PAYABLE - NONRELATED PARTIES: Schedule of Notes Payable to Non-Related Parties (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Tables/Schedules | |
Schedule of Notes Payable to Non-Related Parties | March 31, 2019 (unaudited) December 31, 2018 (audited) Loan secured by a tour bus, payable in monthly payments of $2,710 including interest at 12% per annum through June 2020. $ 43,764 $ 52,929 Loan secured by a promotional vehicle. Loan is past due, payments are made at irregular intervals and interest expense accrues at 3% per month until paid in full. 68,044 68,044 Total recorded as current liability $ 111,808 $ 120,993 |
Note 10 - Income Taxes_ Schedul
Note 10 - Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Tables/Schedules | |
Schedule of Deferred Tax Assets and Liabilities | March 31, 2019 (unaudited) December 31, 2018 (audited) Deferred tax asset: Net operating loss carryforward $ 1,689,698 $ 1,530,387 Total deferred tax asset 1,689,698 1,530,387 Less: Valuation allowance (1,689,698) (1,530,387) Net deferred tax asset $ - $ - |
Note 10 - Income Taxes_ Sched_2
Note 10 - Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Tables/Schedules | |
Schedule of Effective Income Tax Rate Reconciliation | Federal statutory rate (21.0) % State taxes, net of federal benefit (0.0) % Change in valuation allowance 21.0 % Effective tax rate 0.0 % |
Note 12 - Warrants and Options_
Note 12 - Warrants and Options: Schedule of Fair Value Measurement (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Tables/Schedules | |
Schedule of Fair Value Measurement | March 31, 2019 (unaudited) December 31, 2018 (audited) Stock Price $ .76 $ .70 Exercise Price $ 1.00 $ 1.00 Term (expected in years) 3.00 3.00 Volatility 266.9% 163.0% Annual Rate of Dividends 0.0% 0.0% Risk Free Rate 2.51% 2.69% |
Note 12 - Warrants and Option_2
Note 12 - Warrants and Options: Schedule of Warrant Activity (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Tables/Schedules | |
Schedule of Warrant Activity | Shares Weighted-Average Exercise Price Per Share Remaining term Intrinsic value Outstanding, December 31, 2017 2,635,000 $0.91 1.69 years - Granted 270,000 $1.00 1.35 years - Exercised 660,000 $0.50 - - Expired - - - - Outstanding and Exercisable at December 31, 2018 2,245,000 $0.58 0.93 years - Granted 325,000 $0.24 1.06 years - Exercised 250,000 $0.01 - - Expired - - - - Outstanding and Exercisable at March 31, 2019 2,320,000 $0.59 1.00 years - |
Note 1 - Summary of Signific_17
Note 1 - Summary of Significant Accounting Policies (Details) | 3 Months Ended |
Mar. 31, 2019 | |
Details | |
Entity Incorporation, Date of Incorporation | Dec. 15, 2014 |
Entity Incorporation, State or Country Code | NV |
Note 2 - Going Concern (Details
Note 2 - Going Concern (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Details | |||
Net income (loss) | $ (758,623) | $ (627,357) | |
Accumulated deficit | (8,046,182) | $ (7,287,559) | |
Working Capital Deficit | $ 1,274,951 | $ 888,280 |
Note3 - Inventory and Deposit_2
Note3 - Inventory and Deposits: Schedule of Inventory (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Details | ||
Inventory - Finished goods | $ 718,467 | $ 520,154 |
Inventory deposits | 111,650 | 248,729 |
Less: Reserve for excess and obsolete | 0 | 0 |
Net inventory and deposits | $ 830,117 | $ 768,883 |
Note 4 - Property and Equipme_3
Note 4 - Property and Equipment: Schedule of Property, Plant and Equipment (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Details | ||
Marketing equipment | $ 32,261 | $ 32,261 |
Vehicles | 277,886 | 277,886 |
Less: Accumulated depreciation | (196,636) | (181,129) |
Net property and equipment | $ 113,511 | $ 129,018 |
Note 4 - Property and Equipme_4
Note 4 - Property and Equipment (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Details | ||
Depreciation Expense | $ 15,507 | $ 15,507 |
Note 5 - Related Party Note P_2
Note 5 - Related Party Note Payable and Related Party Transactions (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Interest Expense | $ 221,169 | $ 86,491 |
Year ended December 31, 2016 | ||
Debt Instrument, Description | Company received loans from its sole officer and director | |
Debt Instrument, Face Amount | $ 16,588 | |
Repayments of Debt | 0 | |
Long-term Debt | $ 16,588 | |
Debt Instrument, Payment Terms | due on demand | |
Debt Instrument, Interest Rate, Stated Percentage | 0.00% | |
Year ended December 31, 2018 | ||
Debt Instrument, Description | Company entered into several convertible debt instruments with stockholders | |
Debt Instrument, Face Amount | $ 345,000 | |
Long-term Debt | 140,390 | |
Interest Expense | 137,714 | |
Interest accrued on debt | 40,698 | |
Debt instrument, Beneficial discount | $ 270,000 | |
During the year ended December 31, 2018 | ||
Debt Instrument, Description | holders of convertible debentures exercised their rights to convert the debt | |
Interest accrued on debt | $ 280,529 | |
Convertible Debenture - Related Party, converted | $ 2,060,000 | |
Conversion of Stock, Shares Issued | 4,681,058 | |
Loan to subsidiary | $ 2,664,787 | |
Charles A. Ross, Jr | ||
Salary and Wage, Officer, Excluding Cost of Good and Service Sold | $ 53,500 | $ 50,000 |
NOTE 6 - NOTES PAYABLE - NONR_3
NOTE 6 - NOTES PAYABLE - NONRELATED PARTIES: Schedule of Notes Payable to Non-Related Parties (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Loan #1 | ||
Total recorded as current liability | $ 43,764 | $ 52,929 |
Debt Instrument, Collateral | a tour bus | |
Monthly payment | $ 2,710 | |
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | |
Loan #2 | ||
Total recorded as current liability | $ 68,044 | 68,044 |
Debt Instrument, Collateral | a promotional vehicle | |
Debt Instrument, Interest Rate, Stated Percentage | 3.00% | |
Debt Instrument, Payment Terms | payments are made at irregular intervals and interest expense accrues at 3% per month until paid in full | |
Total recorded as current liability | $ 111,808 | $ 120,993 |
Note 8 - Notes Payable - Work_2
Note 8 - Notes Payable - Working Capital (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Common Stock, Shares, Issued | 30,312,058 | 29,912,058 | |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | |
Interest Expense | $ 221,169 | $ 86,491 | |
On July 6, 2017 | |||
Debt Instrument, Issuance Date | Jul. 6, 2017 | ||
Debt Instrument, Issuer | Company’s wholly-owned operating subsidiary | ||
Debt Instrument, Description | secured promissory note | ||
Debt Instrument, Face Amount | $ 250,000 | ||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | ||
Common Stock, Shares, Issued | 250,000 | ||
Common Stock, Par or Stated Value Per Share | $ 0.50 | ||
Common Stock, Value, Subscriptions | $ 125,000 | ||
In April, 2018 | |||
Debt Instrument, Description | sale of additional notes under similar terms | ||
Debt Instrument, Face Amount | $ 250,000 | ||
In July, 2018 | |||
Debt Instrument, Issuer | Company’s wholly-owned operating subsidiary completed the sale of additional notes under similar terms | ||
Debt Instrument, Face Amount | $ 300,000 | ||
Debt Instrument, Collateral | The notes are secured by a pledge of certain of the Company’s current inventory and the chief executive officer’s personal guaranty | ||
Debt Instrument, Payment Terms | payments equal to 75-100% of current sales | ||
In October and December, 2018 | |||
Debt Instrument, Issuer | Company’s wholly-owned operating subsidiary | ||
Debt Instrument, Description | additional notes | ||
Debt Instrument, Face Amount | $ 425,000 | ||
Three months ending March 31, 2019 | |||
Debt Instrument, Issuer | Company and the Company’s wholly-owned operating subsidiary | ||
Debt Instrument, Description | additional short term notes | ||
Debt Instrument, Face Amount | $ 612,000 | ||
Debt Instrument, Collateral | secured by a pledge of certain of the Company’s current inventory and the chief executive officer’s personal guaranty | ||
Interest Expense | $ 125,781 | ||
Secured Debt | $ 1,681,749 | $ 1,165,787 |
Note 8 - Convertible Debentur_2
Note 8 - Convertible Debenture, Related Party (Details) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Convertible Debenture 1 | |
Debt Instrument, Issuer | Company |
Debt Instrument, Description | convertible debentures |
Debt Instrument, Face Amount | $ 2,405,000 |
Debt Instrument, Interest Rate, Stated Percentage | 12.00% |
Debt Instrument, Payment Terms | payable in common stock at maturity |
Debt Instrument, Convertible, Terms of Conversion Feature | may be converted into common stock at a price of $0.50 per share after the passage of 181 days |
Proceeds from Loans | $ 2,405,000 |
Long-term Debt | $ 345,000 |
Convertible Debenture 2 | |
Debt Instrument, Issuer | Company |
Debt Instrument, Description | convertible debt instruments |
Debt Instrument, Face Amount | $ 270,000 |
Note 10 - Income Taxes_ Sched_3
Note 10 - Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Deferred tax asset: | ||
Net operating loss carryforward | $ 1,689,698 | $ 1,530,387 |
Total deferred tax asset | 1,689,698 | 1,530,387 |
Less: Valuation allowance | (1,689,698) | (1,530,387) |
Net deferred tax asset | $ 0 | $ 0 |
Note 10 - Income Taxes_ Sched_4
Note 10 - Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Details) | 3 Months Ended |
Mar. 31, 2019 | |
Details | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | (21.00%) |
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Percent | (0.00%) |
Change in valuation allowance | 21.00% |
Effective Income Tax Rate Reconciliation, Percent | 0.00% |
Note 11 - Share Capital (Detail
Note 11 - Share Capital (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 1,000,000 | 1,000,000 |
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares, Outstanding | 30,312,058 | 29,912,058 |
In January 2018 | ||
Sale of Stock, Description of Transaction | Company issued 467,667 shares of its common stock to pay professional and consulting fees | |
Shares, Issued | 467,667 | |
Stock Issued | $ 263,334 | |
In January 2018 | Minimum | ||
Sale of Stock, Price Per Share | $ 0.50 | |
In January 2018 | Maximum | ||
Sale of Stock, Price Per Share | $ 0.60 | |
In January 2019 | ||
Sale of Stock, Description of Transaction | Company issued a 30 day warrant to purchase 250,000 shares of its common stock | |
January 2019 | ||
Sale of Stock, Description of Transaction | Company’s wholly-owned operating subsidiary completed the sale of a secured promissory note in the principal amount of $300,000 | |
In May 2019 | ||
Common Stock, Par or Stated Value Per Share | $ 0.001 | |
Sale of Stock, Description of Transaction | share count was corrected |
Note 12 - Warrants and Options
Note 12 - Warrants and Options (Details) - shares | Mar. 31, 2019 | Dec. 31, 2018 |
Details | ||
Class of Warrant or Right, Outstanding | 2,320,000 | 2,245,000 |
Note 12 - Warrants and Option_3
Note 12 - Warrants and Options: Schedule of Fair Value Measurement (Details) | 3 Months Ended | |
Mar. 31, 2019$ / shares | Mar. 31, 2018$ / shares | |
Details | ||
Stock Price | $ 0.76 | $ 0.70 |
Exercise Price | $ 1 | $ 1 |
Term (expected in years) | 3 years | 3 years |
Volatility | 2.6690 | 1.6300 |
Annual Rate of Dividends | 0 | 0 |
Risk Free Rate | 0.0251 | 0.0269 |
Note 12 - Warrants and Option_4
Note 12 - Warrants and Options: Schedule of Warrant Activity (Details) - USD ($) | Dec. 31, 2017 | Mar. 31, 2019 | Dec. 31, 2018 |
Details | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance | 2,245,000 | 2,635,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Beginning Balance | $ 0.58 | $ 0.91 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 1 year 8 months 8 days | 1 year | 11 months 5 days |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 0 | $ 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 325,000 | 270,000 | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 0.24 | $ 1 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 250,000 | 660,000 | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ 0.01 | $ 0.50 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 0 | $ 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period | 0 | 0 | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Expirations in Period, Weighted Average Exercise Price | $ 0 | $ 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance | 2,635,000 | 2,320,000 | 2,245,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending Balance | $ 0.91 | $ 0.59 | $ 0.58 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 0 | $ 0 | $ 0 |
Note 13 - Subsequent Events (De
Note 13 - Subsequent Events (Details) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Event 1 | |
Subsequent Event, Description | Company received an additional $425,000 under a $450,000 working capital loan |
Debt Instrument, Issuer | Company |
Proceeds from Loans | $ 425,000 |
Debt Instrument, Face Amount | $ 450,000 |
Debt Instrument, Description | working capital loan |
Debt Instrument, Issuance Date | May 1, 2019 |
Debt Instrument, Maturity Date | May 1, 2020 |
Event 2 | |
Subsequent Event, Description | Company repaid a $25,000 loan |
Debt Instrument, Issuer | Company |
Proceeds from Loans | $ 50,000 |
Debt Instrument, Face Amount | $ 50,000 |
Debt Instrument, Description | loan |
Debt Instrument, Issuance Date | May 10, 2019 |
Debt Instrument, Maturity Date | Aug. 8, 2019 |
Event 3 | |
Subsequent Event, Description | Company repaid a $50,000 loan |
Debt Instrument, Issuer | Company |
Proceeds from Loans | $ 50,000 |
Debt Instrument, Face Amount | $ 50,000 |
Debt Instrument, Description | loan |
Debt Instrument, Issuance Date | Apr. 29, 2019 |
Debt Instrument, Maturity Date | Oct. 29, 2019 |
Event 4 | |
Subsequent Event, Description | Company is in negotiations to extend a $130,000 loan that matured on April 5, 2019 and a $55,000 loan that matured March 15, 2019 |
Debt Instrument, Issuer | Company |
Event 5 | |
Subsequent Event, Description | Company terminated a social media marketing agreement |
Subsequent Event, Date | Apr. 1, 2019 |