Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 31, 2017 | Mar. 06, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | RC-1, Inc. | ||
Entity Central Index Key | 1,665,598 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 1,244,437 | ||
Entity Common Stock, Shares Outstanding | 8,296,248 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash | $ 49,900 | $ 49,118 |
Accounts receivable - related party | 15,000 | 0 |
Total current assets | 64,900 | 49,118 |
Fixed assets - net | 96,667 | 136,667 |
Total Assets | 161,567 | 185,785 |
Current liabilities | ||
Accounts payable | 27,478 | 0 |
Accrued payables - related parties | 196,302 | 120,000 |
Line of credit | 75,000 | 76,459 |
Due to related parties | 515,811 | 458,277 |
Accrued interest payable | 22,418 | 14,918 |
Accrued interest payable - related party | 85,394 | 50,322 |
Total current liabilities | 922,403 | 719,976 |
Total Liabilities | 922,403 | 719,976 |
Commitments and contingencies | ||
Stockholders' Equity | ||
Preferred stock, $.001 par value; 10,000,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock, $.0001 par value; 190,000,000 shares authorized; 7,929,581 shares issued and outstanding | 792 | 792 |
Additional paid in capital | 2,244,829 | 2,244,829 |
Accumulated deficit | (3,006,457) | (2,779,812) |
Total Stockholders' Deficit | (760,836) | (534,191) |
Total Liabilities and Stockholders' Deficit | $ 161,567 | $ 185,785 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ .0010 | $ 0.0010 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ .0001 | $ 0.0001 |
Common stock, shares authorized | 190,000,000 | 190,000,000 |
Common stock, shares issued | 7,929,581 | 7,929,581 |
Common stock, shares outstanding | 7,929,581 | 7,929,581 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | ||
Revenues | $ 0 | $ 1,000 |
Revenues - related party | 15,000 | 0 |
Cost of sales | 0 | 0 |
Gross profit | 15,000 | 1,000 |
Operating expenses: | ||
Race expenses | 32,305 | 43,118 |
Consulting - related parties | 60,000 | 168,000 |
General and administrative | 43,155 | 41,858 |
Professional fees | 63,613 | 15,500 |
Total operating expenses | 199,073 | 268,476 |
Loss from operations | (184,073) | (267,476) |
Other expenses: | ||
Interest expense | (7,500) | (7,713) |
Interest expense - related parties | (35,072) | (31,768) |
Total other income (expense) | (42,572) | (39,481) |
Loss before income taxes | (226,645) | (306,957) |
Provision for income tax | 0 | 0 |
Net loss | $ (226,645) | $ (306,957) |
Net loss per share (Basic and fully diluted) | $ (.03) | $ (.04) |
Weighted average number of common shares outstanding | 7,929,581 | 7,929,581 |
Statements of Stockholders' Equ
Statements of Stockholders' Equity - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning balance, shares at Dec. 31, 2014 | 7,929,581 | |||
Beginning balance, value at Dec. 31, 2014 | $ 792 | $ 2,244,829 | $ (2,472,855) | $ (227,234) |
Net loss | (306,957) | (306,957) | ||
Ending balance, shares at Dec. 31, 2015 | 7,929,581 | |||
Ending balance, value at Dec. 31, 2015 | $ 792 | 2,244,829 | (2,779,812) | (534,191) |
Net loss | (226,645) | (226,645) | ||
Ending balance, shares at Dec. 31, 2016 | 7,929,581 | |||
Ending balance, value at Dec. 31, 2016 | $ 792 | $ 2,244,829 | $ (3,006,457) | $ (760,836) |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (226,645) | $ (306,957) |
Adjustments to reconcile net loss to net cash used for operating activities: | ||
Depreciation | 40,000 | 40,000 |
Changes in Operating Assets and Liabilities | ||
(Increase) in accounts receivable | (15,000) | 0 |
Increase (decrease) in accounts payable | 27,478 | (14,050) |
Increase in accounts payable - related parties | 76,302 | 60,000 |
Increase in accrued interest | 7,500 | 7,452 |
Increase in accrued interest-related parties | 35,072 | 31,767 |
Net cash used for operating activities | (55,293) | (181,788) |
Cash Flows From Financing Activities: | ||
Line of credit - borrowings | 0 | 2,366 |
Line of credit - payments | 0 | (3,134) |
Proceeds from line of credit to related party | 246,175 | 275,364 |
Repayments on line of credit to related party | (190,100) | (71,416) |
Net cash provided by financing activities | 56,075 | 203,181 |
Net Increase In Cash | 782 | 21,393 |
Cash At The Beginning Of The Period | 49,118 | 27,725 |
Cash At The End Of The Period | 49,900 | 49,118 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Interest | 0 | 0 |
Income tax | 0 | 0 |
Schedule of Non-Cash Investing and Financing Activities | ||
Assumption of debt by related party | $ 1,459 | $ 0 |
1. Organization and Description
1. Organization and Description of Business Operations | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business Operations | RC-1, Inc. (the “Company”), was incorporated in the State of Nevada on May 14, 2009. The Company has generated only limited revenues from its activities in the racing business. R-Course Promotions, LLC was formed in the State of California on October 30, 2007. On June 1, 2009, in a merger classified as a transaction between parties under common control, the sole membership interest owner in R-Course Promotions, LLC exchanged 125,000 membership interests for 1,786 common shares in RC-1, Inc. Subsequent to the consummation of the merger, R-Course Promotions, LLC ceased to exist. The results of operations of RC-1, Inc. and R-Course Promotions, LLC have been combined from October 30, 2007 forward through the date of merger. The Company is a motorsports marketing business focused primary in road racing events in North America utilizing NASCAR type competition equipment. On March 4, 2014, the Company declared a reverse stock split of 1 share for 70 shares outstanding. The authorized number of shares was increased to 200,000,000 and the par value was changed to $.0001 per share. All references to the number of shares have been retroactively restated to reflect the split, to all periods presented. |
2. Summary of Significant Accou
2. Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Basis of presentation The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and cash equivalents The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents. The Company maintains cash with a commercial bank. The deposits are made with a reputable financial institution and the Company does not anticipate realizing any losses from these deposits. Property and equipment Property and equipment are recorded at cost and depreciated under the straight line method over each item's estimated useful life. The Company uses a 5 year life for racecars and equipment, 7 years for furniture and fixtures. Long-Lived Assets In accordance with FASB ASC 360, “Property, Plant, and Equipment” which establishes the accounting for impairment of long-lived tangible and intangible assets other than goodwill, the Company reviews for impairment when facts or circumstances indicate that the carrying value of long-lived assets to be held and used may not be recoverable. If such facts or circumstances are determined to exist, an estimate of the undiscounted future cash flows produced by the long-lived asset, or the appropriate grouping of assets, is compared to the carrying value to determine whether impairment exists. If an asset is determined to be impaired, the loss is measured based on various valuation techniques, including the discounted value of estimated future cash flows. The Company reports impairment cost as a charge to operations at the time it is identified. During the years ended December 31, 2016 and 2015 the Company determined that there was no impairment of long-lived assets. Financial Instruments The Company measures its financial assets and liabilities in accordance with the requirements of FASB ASC 825 “Financial Instruments”. The carrying values of its accounts payable, note payable (current portion), line of credit, accrued expenses, and other current liabilities approximate fair value due to the short-term maturities of these instruments. Revenue recognition The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification The majority of revenues are from consulting services provided at events which range from one day to one week in length. The Company also earns revenues from entering their race cars into events whereby there is a money purse for finishing positions. The revenues from these events are recognized upon completion of the contracted services. In the event that the Company’s revenues are for services provided under contracts greater than one month in length, the contracts will be billed in total at the onset of the contact period, and to the extent that billings exceed revenue earned, the Company will record such amount as deferred revenue until the revenue is earned. Recognize revenue on these contracts in the period the services are provided under the contract. Expenses associated with providing the services are recognized in the period the services are provided which coincides with when the revenue is earned. Income tax The Company accounts for income taxes pursuant to FASB ASC 740, “Income Taxes”. Under FASB ASC 740 deferred income taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The provision for income taxes represents the tax expense for the period, if any, and the change during the period in deferred tax assets and liabilities. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. FASB ASC 740 also provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax positions. Under FASB ASC 740, the impact of an uncertain tax position on the income tax return may only be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. At December 31, 2016 and 2015, there were no unrecognized tax benefits. Net income (loss) per share The Company utilizes FASB ASC 260, “Earnings per Share.” Basic earnings per share is computed by dividing earnings (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include additional common share equivalents available upon exercise of stock options and warrants using the treasury stock method. Dilutive common share equivalents include the dilutive effect of in-the-money share equivalents, which are calculated based on the average share price for each period using the treasury stock method, excluding any common share equivalents if their effect would be anti-dilutive For the years ended December 31, 2016 and 2015, there were no potentially dilutive shares. Products and services, geographic areas and major customers The Company earns revenue from race purses, race event consulting and the occasional sale of racecars, but does not separate sales from different activities into operating segments. Concentrations of debt financing The Company has line of credit agreements with companies owned and operated by the Company’s CEO and majority shareholder. Outstanding principal on these lines of credit account for 87.3% of the Company line of credit balances. See Note 7 for further discussion of line of credit terms and relationships. Stock based compensation The Company accounts for employee and non-employee stock awards under FASB ASC 718, “Compensation – Stock Compensation”, whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to non-employees are recorded based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable. Recent Accounting Pronouncements Management does not believe that any recently issued, but not yet effective, accounting standards, if adopted, will have a material effect on our financial statements. |
3. Going Concern
3. Going Concern | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company's ability to continue as a going concern is contingent upon its ability to achieve and maintain profitable operations, and the Company’s ability to raise additional capital as required. These conditions raise substantial doubt about the Company's ability to continue as a going concern. 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. |
4. Fixed Assets
4. Fixed Assets | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets | Fixed asset values recorded at cost are as follows: December 31, 2016 December 31, 2015 Equipment $ 200,000 $ 200,000 Less: Accumulated depreciation (103,333 ) (63,333 ) Fixed assets, net $ 96,667 $ 136,667 Depreciation expense was $40,000 for each of the years the years ended December 31, 2016 and 2015. |
5. Lines of Credit
5. Lines of Credit | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Lines of Credit | December 31, 2016 December 31, 2015 TVP Investments, LLC $ 75,000 $ 75,000 Wells Fargo – 1,459 75,000 76,459 Less: current portion (75,000 ) (76,459 ) Long-term portion $ – $ – On October 15, 2012, the Company entered into a revolving line of credit agreement with TVP Investments, LLC, a Georgia Limited Liability Company in the amount up to $500,000. The line of credit is unsecured, bears interest of 10% and has a maturity date of October 15, 2017. The Company has a business line of credit up to $3,000 with Well Fargo bank. The line of credit is unsecured with a variable interest rate of approximately 18.0%. As of December 31, 2016, and 2015, the Company had a line of credit balance of $75,000 and $76,459, respectively. As of December 31, 2016 and 2015, the Company had accrued interest on these lines of credit in the amounts of $22,418 and $14,918, respectively. |
6. Stockholders' Equity
6. Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | The Company was incorporated on May 9, 2009 at which time the Company authorized 125,000,000 shares of common stock with $.001 par value. On March 4, 2014, the Company declared a reverse stock split of 1 share for 70 shares outstanding. The authorized number of common shares was increased to 190,000,000 and the par value was changed to $.0001 per share. All references to the number of shares have been restated to reflect the split. There are 10,000,000 shares of preferred stock authorized with a $.001 par value, none of which are outstanding. |
7. Related Party Transactions
7. Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Consulting expense to related parties On January 1, 2012, the Company executed a three (3) year consulting agreement with GPP a company owned and operated by the CEO and majority shareholder to provide consulting services in the motor sports marketing industry. The consulting agreement requires a $5,000 monthly fee and can be terminated by either party pursuant to a 60-day notice. As of December 31, 2016, and 2015, the Company had an accrued payable balance due to this related party of $180,000 and $120,000, respectively. During the years ended December 31, 2016 and 2015, the Company incurred total related party consulting fees of $60,000 and $60,000 respectively. On January 1, 2014, the Company entered into an event services agreement with Carolina Pro Am Drivers, Inc. an event services company that is owned and controlled by an individual who is also the owner and controller of a separate company that became an owner of 16.6% of the Company's issued and outstanding common shares on June 15, 2014. For the year ended December 31, 2016 and 2015 the Company paid $0 and $125,500 in related party consulting services respectively. Accounts payable to related parties During race events, the Company charges various event related expenses to credit cards of the majority shareholder. These expenses are recorded as accounts payable to related parties at the time the charges are made and reimbursed to at the conclusion of the event. As of December 31, 2016, the Company had charged $16,302 of race related expenses which were reimbursed in January 2017. Due to related parties On October 1, 2009, the Company entered into a line of credit agreement for up to $600,000 with a related party owned and operated by the CEO and majority shareholder that also provides motor sports marketing industry consulting services to the Company as needed. Under the agreement, the Company receives operating fund advances and reimbursement for expenses incurred on behalf of the Company. The loan bears interest at eight percent (8%) per annum. Interest for this line of credit has been waived by the lender. As of December 31, 2016, and 2015, the Company owed $183,164 and $155,364 respectively, in operating advances to this related party. As of December 31, 2016, and 2015, the Company had accrued interest on this line of credit in the amounts of $18,354 and $5,532, respectively. On August 5, 2013, the Company entered into a line of credit agreement for up to $300,000 with a related party owned and operated by the CEO and majority shareholder. On January 1, 2016, the line of credit was increased to $500,000. Under the agreement, the Company receives operating fund advances and reimbursement for expenses incurred on behalf of the Company. Starting January 1, 2014, the loan began bearing interest of eight (8%) interest per annum. As of December 31, 2016, and 2015, the Company owed $332,647 and $302,913, respectively, in operating advances to this related party. As of December 31, 2016, and 2015, the Company had accrued interest on this line of credit in the amounts of $67,040 and $44,790, respectively. |
8. Income Taxes
8. Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | The following table presents the current and deferred income tax provision (benefit) for federal and state income taxes: 2016 2015 Current tax provision: Federal $ – $ – Deferred tax provision (benefit): Federal (16,541 ) (46,044 ) Change in valuation allowance 16,541 46,044 Total provision for income tax $ – $ – Current income taxes are based upon the year’s income taxable for federal and state tax reporting purposes. Deferred income taxes (benefits) are provided for certain income and expenses, which are recognized in different periods for tax and financial reporting purposes. Deferred tax assets and liabilities are computed for differences between the financial statements and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the period in which the differences are expected to affect taxable income. The Company’s deferred income taxes arise from the temporary differences between financial statement and income tax recognition of net operating losses. These loss carryovers would be limited under the Internal Revenue Code should a significant change in ownership occur within a three-year period. In 2016 and 2015, the Company’s tax losses were reduced by accrued expenses to related parties which are not recognized for tax purposes until paid and differences in depreciation reported on the financial statements and amounts allowed for tax purposes. At December 31, 2016 and 2015, the Company had net operating loss carryforwards of approximately $1,737,545 and $2,780,000, respectively, which begin to expire in 2029. The deferred tax assets arising from the net operating loss carryforwards are approximately $260,632 and $416,972 as of December 31, 2016, and 2015, respectively. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, the projected future taxable income and tax planning strategies in making this assessment. Based on management’s analysis, they concluded not to retain a deferred tax asset since it is uncertain whether the Company can utilize this asset in future periods. Therefore, they have established a full reserve against this asset. The change in the valuation allowance in 2016 and 2015 was approximately $16,541 and $46,044, respectively. A reconciliation of the expected tax computed at the U.S. statutory federal income tax rate to the total benefit for income taxes at December 31, 2016 and 2015 is as follows: 2016 2015 Expected tax at 15% $ (16,541 ) $ (46,044 ) Change in valuation allowance 16,541 46,044 Provision for income taxes $ – $ – The Company’s continuing practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of December 31, 2016, and 2015, the Company had no accrued interest and penalties related to uncertain tax positions. The Company is subject to taxation in the U.S. The state of Nevada does not impose an income tax on corporations. Tax years for 2009 and forward are subject to examination by tax authorities. The Company is not currently under examination by any tax authority. Management has evaluated tax positions in accordance with FASB ASC 740, and has not identified any tax positions, other than those discussed above, that require disclosure. |
9. Subsequent Events
9. Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | In January 2017, the Company entered into a 36-month warehouse lease with Rick Ware Racing, LLC, payable in 1,200,000 shares of the Company’s common stock. In March of 2017, the Company sold the Ford BOSS Mustang R back to the original seller receiving $125,000 in cash and 833,333 shares of the Company’s common stock which were cancelled. |
2. Summary of Significant Acc16
2. Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
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 reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and cash equivalents | Cash and cash equivalents The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents. The Company maintains cash with a commercial bank. The deposits are made with a reputable financial institution and the Company does not anticipate realizing any losses from these deposits. |
Property and equipment | Property and equipment Property and equipment are recorded at cost and depreciated under the straight line method over each item's estimated useful life. The Company uses a 5 year life for racecars and equipment, 7 years for furniture and fixtures. |
Long-lived assets | Long-Lived Assets In accordance with FASB ASC 360, “Property, Plant, and Equipment” which establishes the accounting for impairment of long-lived tangible and intangible assets other than goodwill, the Company reviews for impairment when facts or circumstances indicate that the carrying value of long-lived assets to be held and used may not be recoverable. If such facts or circumstances are determined to exist, an estimate of the undiscounted future cash flows produced by the long-lived asset, or the appropriate grouping of assets, is compared to the carrying value to determine whether impairment exists. If an asset is determined to be impaired, the loss is measured based on various valuation techniques, including the discounted value of estimated future cash flows. The Company reports impairment cost as a charge to operations at the time it is identified. During the years ended December 31, 2016 and 2015 the Company determined that there was no impairment of long-lived assets. |
Financial Instruments | Financial Instruments The Company measures its financial assets and liabilities in accordance with the requirements of FASB ASC 825 “Financial Instruments”. The carrying values of its accounts payable, note payable (current portion), line of credit, accrued expenses, and other current liabilities approximate fair value due to the short-term maturities of these instruments. |
Revenue recognition | Revenue recognition The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification The majority of revenues are from consulting services provided at events which range from one day to one week in length. The Company also earns revenues from entering their race cars into events whereby there is a money purse for finishing positions. The revenues from these events are recognized upon completion of the contracted services. In the event that the Company’s revenues are for services provided under contracts greater than one month in length, the contracts will be billed in total at the onset of the contact period, and to the extent that billings exceed revenue earned, the Company will record such amount as deferred revenue until the revenue is earned. Recognize revenue on these contracts in the period the services are provided under the contract. Expenses associated with providing the services are recognized in the period the services are provided which coincides with when the revenue is earned. |
Income tax | Income tax The Company accounts for income taxes pursuant to FASB ASC 740, “Income Taxes”. Under FASB ASC 740 deferred income taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The provision for income taxes represents the tax expense for the period, if any, and the change during the period in deferred tax assets and liabilities. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. FASB ASC 740 also provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax positions. Under FASB ASC 740, the impact of an uncertain tax position on the income tax return may only be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. At December 31, 2016 and 2015, there were no unrecognized tax benefits. |
Net income (loss) per share | Net income (loss) per share The Company utilizes FASB ASC 260, “Earnings per Share.” Basic earnings per share is computed by dividing earnings (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include additional common share equivalents available upon exercise of stock options and warrants using the treasury stock method. Dilutive common share equivalents include the dilutive effect of in-the-money share equivalents, which are calculated based on the average share price for each period using the treasury stock method, excluding any common share equivalents if their effect would be anti-dilutive For the years ended December 31, 2016 and 2015, there were no potentially dilutive shares. |
Products and services, geographic areas and major customers | Products and services, geographic areas and major customers The Company earns revenue from race purses, race event consulting and the occasional sale of racecars, but does not separate sales from different activities into operating segments. |
Concentrations of debt financing | Concentrations of debt financing The Company has line of credit agreements with companies owned and operated by the Company’s CEO and majority shareholder. Outstanding principal on these lines of credit account for 87.3% of the Company line of credit balances. See Note 7 for further discussion of line of credit terms and relationships. |
Stock-based compensation | Stock based compensation The Company accounts for employee and non-employee stock awards under FASB ASC 718, “Compensation – Stock Compensation”, whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to non-employees are recorded based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Management does not believe that any recently issued, but not yet effective, accounting standards, if adopted, will have a material effect on our financial statements. |
4. Fixed Assets (Tables)
4. Fixed Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of fixed assets | December 31, 2016 December 31, 2015 Equipment $ 200,000 $ 200,000 Less: Accumulated depreciation (103,333 ) (63,333 ) Fixed assets, net $ 96,667 $ 136,667 |
5. Lines of Credit (Tables)
5. Lines of Credit (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Lines of credit table | December 31, 2016 December 31, 2015 TVP Investments, LLC $ 75,000 $ 75,000 Wells Fargo – 1,459 75,000 76,459 Less: current portion (75,000 ) (76,459 ) Long-term portion $ – $ – |
8. Income Taxes (Tables)
8. Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of provision for income tax | 2016 2015 Current tax provision: Federal $ – $ – Deferred tax provision (benefit): Federal (16,541 ) (46,044 ) Change in valuation allowance 16,541 46,044 Total provision for income tax $ – $ – |
Reconciliation of income tax expense | 2016 2015 Expected tax at 15% $ (16,541 ) $ (46,044 ) Change in valuation allowance 16,541 46,044 Provision for income taxes $ – $ – |
2. Summary of Significant Acc20
2. Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Impairment of long-lived assets | $ 0 | $ 0 |
Unrecognized tax benefits | $ 0 | $ 0 |
Potentially dilutive shares | 0 | 0 |
Racecars and equipment [Member] | ||
Property and equipment useful lives | 5 years | |
Furniture and Fixtures [Member] | ||
Property and equipment useful lives | 7 years |
4. Fixed Assets (Details)
4. Fixed Assets (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Abstract] | ||
Equipment | $ 200,000 | $ 200,000 |
Less: Accumulated depreciation | (103,333) | (63,333) |
Fixed assets, net | $ 96,667 | $ 136,667 |
4. Fixed Assets (Details Narrat
4. Fixed Assets (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 40,000 | $ 40,000 |
5. Lines of Credit (Details)
5. Lines of Credit (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Lines of credit | $ 75,000 | $ 76,459 |
Lines of credit, current portion | (75,000) | (76,459) |
Lines of credit, long-term portion | 0 | 0 |
TVP Investments [Member] | ||
Lines of credit | 75,000 | 75,000 |
Wells Fargo [Member] | ||
Lines of credit | $ 0 | $ 1,459 |
5. Lines of Credit (Details Nar
5. Lines of Credit (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Accrued interest | $ 22,418 | $ 14,918 |
Line of Credit [Member] | ||
Accrued interest | $ 22,418 | $ 14,918 |
TVP Investments [Member] | ||
Line of credit initiation date | Oct. 15, 2012 | |
Line of credit maximum amount | $ 500,000 | |
Line of credit interest rate | 10.00% | |
Line of credit expiration date | Oct. 15, 2017 | |
Wells Fargo [Member] | ||
Line of credit maximum amount | $ 3,000 | |
Line of credit interest rate | 18.00% |
7. Related Party Transactions (
7. Related Party Transactions (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Consulting expense | $ 60,000 | $ 168,000 |
Accounts payable, related party | 196,302 | 120,000 |
Due to related parties | 515,811 | 458,277 |
Major Shareholder [Member] | ||
Accounts payable, related party | 16,302 | |
Carolina Pro Am Drivers [Member] | ||
Consulting expense | 0 | 125,500 |
Consulting Agreements [Member] | ||
Consulting expense | 60,000 | 168,000 |
Credit Line [Member] | Related to CEO [Member] | ||
Due to related parties | $ 183,164 | 155,364 |
Line of credit initiation date | Oct. 1, 2009 | |
Line of credit maximum amount | $ 300,000 | |
Line of credit interest rate | 8.00% | |
Accrued interest | $ 18,354 | 5,532 |
Credit Line 2 [Member] | Related to CEO [Member] | ||
Due to related parties | $ 332,647 | 302,913 |
Line of credit initiation date | Aug. 5, 2013 | |
Line of credit maximum amount | $ 500,000 | |
Line of credit interest rate | 8.00% | |
Accrued interest | $ 67,040 | $ 44,790 |
8. Income Taxes (Details - Tax
8. Income Taxes (Details - Tax provision) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Current tax provision: Federal | $ 0 | $ 0 |
Deferred tax provision (benefit): Federal | (16,541) | (46,044) |
Change in valuation allowance | 16,541 | 46,044 |
Provision for income taxes | $ 0 | $ 0 |
8. Income Taxes (Details - Ta27
8. Income Taxes (Details - Tax reconciliation) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Expected tax at 15% | $ (16,541) | $ (46,044) |
Change in valuation allowance | 16,541 | 46,044 |
Provision for income taxes | $ 0 | $ 0 |
8. Income Taxes (Details Narrat
8. Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforward | $ 1,737,545 | $ 2,780,000 |
NOL beginning expiration date | Dec. 31, 2029 | |
Deferred operating loss carryforwards | $ 260,632 | $ 416,972 |