Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 22, 2017 | Jun. 30, 2016 | |
Document And Entity Information | |||
Entity Registrant Name | H/Cell Energy Corp | ||
Entity Central Index Key | 1,676,580 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 0 | ||
Entity Common Stock, Shares Outstanding | 6,941,579 | ||
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 and Cash Equivalents | $ 292,887 | $ 49,200 |
Prepaid Expenses | 13,329 | |
Costs in Excess of Billings | 247 | |
Total Current Assets | 306,463 | 49,200 |
Other Assets, Website Development Costs | 2,400 | 3,000 |
TOTAL ASSETS | 308,863 | 52,200 |
Current Liabilities | ||
Accounts Payable and Accrued Expenses | 6,000 | 2,400 |
Billings in Excess of Costs | 7,847 | |
Due to Stockholders | 5,420 | |
Total Current Liabilities | 13,847 | 7,820 |
Stockholders' Equity | ||
Common Stock - $0.0001 par value; 25,000,000 shares authorized;3,131,579 and 2,105,263 shares issued and outstanding as of December 31, 2016 and December 31, 2015, respectively | 313 | 211 |
Preferred Stock - $0.0001 par value; 5,000,000 shares authorized;0 shares issued and outstanding | ||
Paid-in-Capital | 778,938 | 49,989 |
Retained Earnings | (484,235) | (5,820) |
Total Stockholders' Equity | 295,016 | 44,380 |
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | $ 308,863 | $ 52,200 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Common stock, shares par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 3,131,579 | 2,105,263 |
Common stock, shares outstanding | 3,131,579 | 2,105,263 |
Preferred stock, shares par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Statement of Operations
Statement of Operations - USD ($) | 4 Months Ended | 12 Months Ended |
Dec. 31, 2015 | Dec. 31, 2016 | |
Revenue | ||
Contracts | $ 8,553 | |
Related Party | 12,374 | |
Total Revenue | 20,927 | |
Cost of Goods Sold | ||
Contracts | 9,882 | |
Related Party | 10,627 | |
Total Cost of Goods Sold | 20,509 | |
Gross Profit | 418 | |
Operating Expenses | ||
Research and Development | 2,400 | 2,000 |
General and Administrative Expenses | 3,420 | 476,833 |
Total Operating Expenses | 5,820 | 478,833 |
Loss from Operations | (5,820) | (478,415) |
Income Tax Provision (Benefit) | ||
Net Loss | $ (5,820) | $ (478,415) |
Loss Per Share | ||
Basic | $ (0.17) | |
Weighted Average Common Shares Outstanding | ||
Basic | 2,001,548 | 2,853,785 |
Statement of Stockholders' Equi
Statement of Stockholders' Equity - USD ($) | Common Stock [Member] | Preferred Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Aug. 16, 2015 | |||||
Balance, shares at Aug. 16, 2015 | |||||
Issuance of Common Stock August 2016 | $ 200 | 200 | |||
Issuance of Common Stock August 2016, shares | 2,000,000 | ||||
Issuance of Common Stock December 2016 | $ 11 | 49,989 | 50,000 | ||
Issuance of Common Stock December 2016, shares | 105,263 | ||||
Net Loss | (5,820) | (5,820) | |||
Balance at Dec. 31, 2015 | $ 211 | 49,989 | (5,820) | 44,380 | |
Balance, shares at Dec. 31, 2015 | 2,105,263 | ||||
Net Loss | 421,364 | ||||
Balance at Sep. 30, 2016 | 352,066 | ||||
Balance at Dec. 31, 2015 | $ 211 | 49,989 | (5,820) | 44,380 | |
Balance, shares at Dec. 31, 2015 | 2,105,263 | ||||
Issuance of Common Stock February 2016 | $ 52 | 199,948 | 200,000 | ||
Issuance of Common Stock February 2016, shares | 526,316 | ||||
Stock Based Compensation March 2016 | 387,450 | 387,450 | |||
Issuance of Common Stock June 2016 | $ 50 | 141,551 | 141,601 | ||
Issuance of Common Stock June 2016, shares | 500,000 | ||||
Net Loss | (478,415) | (478,415) | |||
Balance at Dec. 31, 2016 | $ 313 | $ 778,938 | $ (484,235) | $ 295,016 | |
Balance, shares at Dec. 31, 2016 | 3,131,579 |
Statement of Cash Flows
Statement of Cash Flows - USD ($) | 4 Months Ended | 12 Months Ended |
Dec. 31, 2015 | Dec. 31, 2016 | |
Cash Flows from Operating Activities | ||
Net Loss | $ (5,820) | $ (478,415) |
Depreciation | 600 | |
Stock Based Compensation | 387,450 | |
Changes in Assets and Liabilities | ||
Prepaid Expenses | (13,329) | |
Costs in Excess of Billings | (247) | |
Accounts Payable and Accrued Expenses | 3,600 | |
Billings in Excess of Costs | 2,400 | 7,847 |
Net Cash used in Operating Activities | (3,420) | (92,494) |
Net Cash used in Investing Activities | ||
Payment of Website Development Costs | (3,000) | |
Cash Flows from Financing Activities | ||
Proceeds from Issuance of Common Stock, Net | 50,200 | 341,601 |
Due to Stockholders | 5,420 | (5,420) |
Net Cash provided by Financing Activities | 55,620 | 336,181 |
Net Increase in Cash and Cash Equivalents | 49,200 | 243,687 |
Cash and Cash Equivalents - Beginning | 49,200 | |
Cash and Cash Equivalents - Ending | $ 49,200 | $ 292,887 |
Organization and Line of Busine
Organization and Line of Business | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Line of Business | 1. ORGANIZATION AND LINE OF BUSINESS H/Cell Energy Corporation (the “Company”) was incorporated in the state of Nevada on August 17, 2015. The Company, based in Flemington, N.J., is a start-up company whose principal operations consist of designing and installing hydrogen energy systems. Effective January 31, 2017, the Company acquired The Pride Group (QLD) Pty Ltd, an Australian company (“Pride”) (see Note 8). Founded in 1997, Pride is a provider of security systems integration for a variety of customers in the government and commercial sector and has launched a new clean energy systems division to focus on the high growth renewable energy market in Asia-Pacific. The Company has developed a hydrogen energy system for residential and commercial use designed to create electricity. This unique system uses renewable energy as its source for hydrogen production. It functions as a self-sustaining clean energy system. It can be configured as an off grid solution for all electricity needs or it can be connected to the grid to generate energy credits. Its production of hydrogen is truly eco-friendly, as it is not produced by the use of fossil fuels. It is a revolutionary green-energy concept that is safe, renewable, self-sustaining and cost effective. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, 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. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Revenue Recognition Revenues and related costs on construction contracts are recognized using the “percentage of completion method” of accounting in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 605-35, Accounting for Performance of Construction-Type and Certain Production Type Contracts Revisions in cost and profit estimates during the course of the contract are reflected in the accounting period in which the facts, which require the revision, become known. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions, and final contract settlements may result in revisions to costs and income and are recognized in the period in which the revisions are determined. Cash and Cash Equivalents Cash and cash equivalents includes cash in bank and money market funds as well as other highly liquid investments with an original maturity of three months or less. The Company had no cash equivalents as of December 31, 2016. At times during the year ended December 31, 2016, balances exceeded the FDIC insurance limit of $250,000. Website Development Costs In accordance with FASB ASC 350, Website Development Costs Website development costs which have been capitalized and are being amortized, using the straight-line method, over an estimated useful life of five years. The site launched in January of 2016. Research and Development Costs Research and development costs are expensed as incurred. These costs consist primarily of consulting fees, salaries and direct payroll related costs. Stock-Based Employee Compensation The Company recognizes expense for its stock-based compensation based on the fair value of the awards at the time they are granted. We estimate the value of stock option awards on the date of grant using the Black-Scholes model. The determination of the fair value of stock-based payment awards on the date of grant is affected by our stock price as well as assumptions regarding a number of complex and subjective variables. These variables include our expected stock price volatility over the term of the awards, expected term, risk-free interest rate, expected dividends and expected forfeiture rates. The forfeiture rate is estimated using historical option cancellation information, adjusted for anticipated changes in expected exercise and employment termination behavior. Our outstanding awards do not contain market or performance conditions and all options were granted for past services. Income Taxes The Company uses the asset and liability method of accounting for income taxes pursuant to FASB ASC 740, Income Taxes The determination of the Company’s provision for income taxes requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. Significant judgment is required in assessing the timing and amounts of deductible and taxable items and the probability of sustaining uncertain tax positions. The benefits of uncertain tax positions are recorded in the Company’s financial statements only after determining a more-likely-than-not probability that the uncertain tax positions will withstand challenge, if any, from taxing authorities. When facts and circumstances change, the Company reassesses these probabilities and records any changes in the financial statements as appropriate. Accrued interest and penalties related to income tax matters are classified as a component of income tax expense. The Company recognizes and measures its unrecognized tax benefits in accordance with FASB ASC 740. Under that guidance, management assesses the likelihood that tax positions will be sustained upon examination based on the facts, circumstances and information, including the technical merits of those positions, available at the end of each period. The measurement of unrecognized tax benefits is adjusted when new information is available, or when an event occurs that requires a change. The Company did not identify any material uncertain tax positions. The Company did not recognize any interest or penalties for unrecognized tax benefits. The federal income tax returns of the Company are subject to examination by the IRS, generally for the three years after they are filed. The Company’s 2015 and 2016 are still open for examination by the taxing authorities. There was no provision for income taxes for the twelve months ended December 31, 2016. Fair Value of Financial Instruments The carrying value of cash and cash equivalents, accounts payable and accrued liabilities, and short-term borrowings, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed. Net Income (Loss) Per Common Share The Company computes basic net income (loss) per share by dividing net income (loss) per share available to common stockholders by the weighted average number of common shares outstanding for the period and excludes the effects of any potentially dilutive securities. Diluted earnings per share, if presented, would include the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into common stock using the “treasury stock” and/or “if converted” methods as applicable. The computation of basic and diluted loss per share excludes potentially dilutive securities because their inclusion would be anti-dilutive. Potentially-dilutive securities excluded from the computation of basic and diluted net loss per share for the year ended December 31, 2016 are as follows: December 31, 2016 Options to purchase common stock 1,000,000 Totals 1,000,000 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 3. RELATED PARTY TRANSACTIONS The Company’s current office space consists of approximately 800 square feet, which is donated to it from one of its executive officers. There is no lease agreement and the Company pays no rent. Effective February 4, 2016, the Company sold 526,316 shares of common stock to Reza Enterprises, Inc., an entity beneficially owned by Rezaul Karim. In connection with, and as a condition of closing, the Company agreed to appoint Rezaul Karim to its Board. In June 2016, the Company entered into a contract with Rezaul Karim, one of its directors, for the installation of an HC-1 system. As a result of recent project changes by the customer, the system installation is expected to commence in spring 2017. Revised permits were submitted in October 2016. The project has been pushed back due to design changes from being ground mount solar to a solar carport requested by the customer. The Company intends to subcontract the installation of the system to Renewable Energy Holdings LLC (“REH”), a company owned by Mike Strizki, one of the Company’s executive officers. James Strizki, one of the Company’s executive officers and director, is vice president of operations at REH. Total related party revenue and cost of revenue was $12,734 and $10,627, respectively, during the year ended December 31, 2016. The Company has entered into agreements to indemnify its directors and executive officers, in addition to the indemnification provided for in the Company’s articles of incorporation and bylaws. These agreements, among other things, provide for indemnification of the Company’s directors and executive officers for certain expenses (including attorneys’ fees), judgments, fines and settlement amounts incurred by any such person in any action or proceeding, including any action by or in the right of the Company, arising out of such person’s services as a director or executive officer of the Company, any subsidiary of the Company or any other company or enterprise to which the person provided services at the Company’s request. The Company believes that these provisions and agreements are necessary to attract and retain qualified persons as directors and executive officers. On November 17, 2016, the Company entered into a non-binding letter of intent to purchase The Pride Group (QLD) Pty Ltd, an Australian company (“Pride”). Pride is owned 80% by Turquino Equity, which is owned by Andrew and Matthew Hidalgo, the Company’s Chief Executive Officer and Chief Financial Officer, respectively. The acquisition of Pride was completed in January 2017 (see Note 8). |
Stock Options Awards and Grants
Stock Options Awards and Grants | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Options Awards and Grants | 4. STOCK OPTIONS AWARDS AND GRANTS There is not a viable market for the Company’s common stock to determine its fair value, therefore management is required to estimate the fair value to be utilized in the determining stock-based compensation costs. In estimating the fair value, management considered recent sales of its common stock to independent qualified investors. Considerable management judgment is necessary to estimate the fair value. Accordingly, actual results could vary significantly from management’s estimates On March 10, 2016, the Company’s Board of Directors approved the 2016 Incentive Stock Option Plan (the “2016 Plan”). The Plan provides for the issuance of options to purchase up to 2,500,000 shares of the Company’s common stock to officers, directors, employees and consultants of the Company. Under the terms of the Plan the Company may issue Incentive Stock Options as defined by the Internal Revenue Code to employees of the Company only and non-statutory options. The Board of Directors of the Company determines the exercise price, vesting and expiration period (not to exceed 10 years) of the grants under the Plan. However, the exercise price of an Incentive Stock Option should not be less than 110% of fair value of the common stock at the date of the grant for a 10% or more stockholder and 100% of fair value for a grantee who is not 10% stockholder. The fair value of the common stock is determined based on quoted market price or in absence of such quoted market price, by the Board of Directors in good faith. As of December 31, 2016, the Company granted an aggregate of 1,000,000 non-statutory options to a director and key employees. A summary of the stock option activity and related information for the 2016 Plan from August 17, 2015 (date of inception) to December 31, 2016 is as follows: Weighted- Weighted-Average Average Remaining Aggregate Shares Exercise Price Contractual Term Intrinsic Value Outstanding at August 17, 2015 (date of inception) - Grants - Exercised - Canceled - Outstanding at December 31, 2015 - Grants 1,000,000 $ 0.01 5.00 $ 385,833 Exercised - Canceled - Outstanding at December 31,2016 1,000,000 $ 0.01 4.19 $ 385,833 Vested and expected to vest at December 31, 2016 1,000,000 $ 0.01 4.19 $ 385,833 Exercisable at December 31, 2016 1,000,000 $ 0.01 4.19 $ 385,833 The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based on options with an exercise price less than the Company’s estimated market stock price of $0.3958 as of December 31, 2016, which would have been received by the option holders had those option holders exercised their options as of that date. Option valuation models require the input of highly subjective assumptions. The fair value of stock-based payment awards was estimated using the Black-Scholes option model with a volatility figure derived from an index of historical stock prices of comparable entities until sufficient data exists to estimate the volatility using the Company’s own historical stock prices. Management determined this assumption to be a more accurate indicator of value. The Company accounts for the expected life of options based on the contractual life of options for non-employees and for non-statutory options granted to employees. For incentive options granted to employees, the Company accounts for the expected life in accordance with the “simplified” method, which is used for “plain-vanilla” options, as defined in the accounting standards codification. The risk-free interest rate was determined from the implied yields of U.S. Treasury zero-coupon bonds with a remaining life consistent with the expected term of the options. The fair value of stock-based payment awards during the twelve months ended December 31, 2016 was estimated using the Black-Scholes pricing model. During the twelve months ended December 31, 2016, the Company granted an aggregate of 1,000,000 options to purchase shares of the Company’s common stock in connection with the services rendered at the exercise price of $0.01 per share for a term of five years, vesting immediately, and have approximate fair value of $387,450. The fair value of the granted options for the twelve months ended December 31, 2016 was determined using the Black Scholes option pricing model with the following assumptions: Dividend yield: -0- % Volatility 88.44 % Risk free rate: 1.45 % Expected life: 5 years Estimated fair value of the Company’s common stock $ 0.3958 The following table presents information related to stock options at December 31, 2016: Options Outstanding Options Exercisable Weighted Average Exercisable Exercise Number of Remaining Life Number of Price Options In Years Options $ 0.01 1,000,000 4.19 1,000,000 The fair value of all options vesting during the twelve months ended December 31, 2016 of $387,450 was charged to current period operations. As of December 31, 2016, there was no unrecognized compensation expense. |
Restated Unaudited Interim Fina
Restated Unaudited Interim Financial Data | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
Restated Unaudited Interim Financial Data | 5. RESTATED UNAUDITED INTERIM FINANCIAL DATA Adjustments to additional paid in capital balance and retained earnings are related to a previous error not capitalizing legal costs associated with capital raising activities of the Company. Adjustments to operating expenses are related to a previous error of expensing legal costs that were incurred during the capital raising activities of the company. For the nine months ended as of September 30, 2016 As Previously Reported Adjustments As Restated Assets $ 352,066 $ - $ 352,066 Liabilities - - - Paid-in-Capital 887,337 (108,399 ) 778,938 Retained Earnings (535,484 ) 108,399 (427,085 ) Total Stockholders’ Equity 352,066 - 352,066 Revenue 1,500 - 1,500 Cost of revenue 1,500 - 1,500 Gross profit - - - Operating expenses 529,763 (108,399 ) 421,364 Income from operations (529,763 ) 108,399 421,364 Other income (expense) - - Income before taxes (529,763 ) 108,399 421,364 Tax (expense) benefit - - - Net income $ (529,763 ) $ 108,399 $ 421,364 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 6. INCOME TAXES For the years ended December 31, 2016, and 2015, there was no provision for income taxes, current or deferred. At December 31, 2016, we have a federal net operating loss carry forward of approximately $41,042 available to offset future taxable income through 2036. At December 31, 2016, and 2015, we have state net operating loss carryforwards of approximately $41,042 available to offset future losses through 2036. We established valuation allowances equal to the full amount of the deferred tax assets because of the uncertainty of the utilization of the operating losses in future periods. We periodically assess the likelihood that we will be able to recover the deferred tax assets. We consider all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income. Our deferred tax asset and liability as presented in the accompanying consolidated financial statements consist of the following: 2016 2015 Deferred Income Tax Assets: Net operating losses $ 41,042 $ 2,328 Total deferred income tax asset 41,042 2,328 Valuation allowance (41,042 ) (2,328 ) Deferred Income Tax Assets, net $ 0 $ 0 A reconciliation between taxes computed at the federal statutory rate and the consolidated effective tax rate is as follows: 2016 2015 Federal statutory tax rate 34.0 % 34.0 % State tax rate, net of federal tax benefit 6.0 % 6.0 % Adjustment in valuation allowances (12.5 )% (40.0 )% Stock Based Compensation (27.5 )% (0.0 )% Provision (Benefit) for Income Taxes -0- % -0- % |
Going Concern
Going Concern | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | 7. GOING CONCERN As reflected in the accompanying financial statements, the Company has a net loss of $478,415 and net cash used in operations of $92,494 for the year ended December 31, 2016, and cash of $292,887, stockholders’ equity of $295,016 and an accumulated deficit of $484,235 at December 31, 2016. In addition, the Company is a start up in the renewable energy space and has generated limited revenues to date. Management has evaluated the significance of these conditions and under these circumstances expects that its current cash resources as well as expected lack of operating cash flows would not be sufficient to sustain operations for a period greater than one year from this report issuance date. However, due to the acquisition of Pride, management believes that the substantial doubt is alleviated. The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 8. SUBSEQUENT EVENTS In accordance with FASB ASC 855, Subsequent Events, the Company has evaluated subsequent events through March 24, 2017, the date on which these financial statements were available to be issued. On January 31, 2017, the Company acquired Pride. The Company issued an aggregate of 3,800,000 shares (the “Acquisition Shares”) to the shareholders of Pride to acquire 100% of the total outstanding capital stock of Pride. 10% of the Acquisition Shares, or 380,000 shares, were held in escrow pending the Company conducting an assessment of the net tangible asset value (the “NTAV”) of Pride as of the closing date. The Company had 90 days to complete the NTAV calculation, and if the NTAV is less than AUD $200,000, then the Pride shareholders were required to pay the Company the amount of the shortfall through the return to the Company of such number of Acquisition Shares equal to the shortfall divided by $0.50. If the NTAV was greater than AUD $300,000, the Company would have issued the Pride shareholders such number of additional Acquisition Shares equal to the excess divided by $0.50. On February 22, 2017, the Company and the Pride shareholders agreed to the NTAV, which was between AUD $200,000 and AUD $300,000, and the remaining shares were released from escrow and delivered to the Pride shareholders. On March 10, 2017, the Company entered into amendment agreements (the “Amendments”) with employees and directors who received an aggregate of 1 million stock option grants in March 2016 (the “Granted Options”). All of the Granted Options had vested at the time of issuance. The Amendments provided for vesting schedules of the Granted Options, with the Granted Options now vesting as follows: Number of Granted Options Vesting Date 100,000 April 1, 2017 100,000 April 1, 2018 50,000 June 1, 2018 375,000 January 1, 2019 375,000 January 1, 2020 |
Summary of Significant Accoun15
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, 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. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. |
Revenue Recognition | Revenue Recognition Revenues and related costs on construction contracts are recognized using the “percentage of completion method” of accounting in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 605-35, Accounting for Performance of Construction-Type and Certain Production Type Contracts Revisions in cost and profit estimates during the course of the contract are reflected in the accounting period in which the facts, which require the revision, become known. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions, and final contract settlements may result in revisions to costs and income and are recognized in the period in which the revisions are determined. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents includes cash in bank and money market funds as well as other highly liquid investments with an original maturity of three months or less. The Company had no cash equivalents as of December 31, 2016. At times during the year ended December 31, 2016, balances exceeded the FDIC insurance limit of $250,000. |
Website Development Costs | Website Development Costs In accordance with FASB ASC 350, Website Development Costs Website development costs which have been capitalized and are being amortized, using the straight-line method, over an estimated useful life of five years. The site launched in January of 2016. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred. These costs consist primarily of consulting fees, salaries and direct payroll related costs. |
Stock-Based Employee Compensation | Stock-Based Employee Compensation The Company recognizes expense for its stock-based compensation based on the fair value of the awards at the time they are granted. We estimate the value of stock option awards on the date of grant using the Black-Scholes model. The determination of the fair value of stock-based payment awards on the date of grant is affected by our stock price as well as assumptions regarding a number of complex and subjective variables. These variables include our expected stock price volatility over the term of the awards, expected term, risk-free interest rate, expected dividends and expected forfeiture rates. The forfeiture rate is estimated using historical option cancellation information, adjusted for anticipated changes in expected exercise and employment termination behavior. Our outstanding awards do not contain market or performance conditions and all options were granted for past services. |
Income Taxes | Income Taxes The Company uses the asset and liability method of accounting for income taxes pursuant to FASB ASC 740, Income Taxes The determination of the Company’s provision for income taxes requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. Significant judgment is required in assessing the timing and amounts of deductible and taxable items and the probability of sustaining uncertain tax positions. The benefits of uncertain tax positions are recorded in the Company’s financial statements only after determining a more-likely-than-not probability that the uncertain tax positions will withstand challenge, if any, from taxing authorities. When facts and circumstances change, the Company reassesses these probabilities and records any changes in the financial statements as appropriate. Accrued interest and penalties related to income tax matters are classified as a component of income tax expense. The Company recognizes and measures its unrecognized tax benefits in accordance with FASB ASC 740. Under that guidance, management assesses the likelihood that tax positions will be sustained upon examination based on the facts, circumstances and information, including the technical merits of those positions, available at the end of each period. The measurement of unrecognized tax benefits is adjusted when new information is available, or when an event occurs that requires a change. The Company did not identify any material uncertain tax positions. The Company did not recognize any interest or penalties for unrecognized tax benefits. The federal income tax returns of the Company are subject to examination by the IRS, generally for the three years after they are filed. The Company’s 2015 and 2016 are still open for examination by the taxing authorities. There was no provision for income taxes for the twelve months ended December 31, 2016. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying value of cash and cash equivalents, accounts payable and accrued liabilities, and short-term borrowings, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed. |
Net Income (Loss) Per Common Share | Net Income (Loss) Per Common Share The Company computes basic net income (loss) per share by dividing net income (loss) per share available to common stockholders by the weighted average number of common shares outstanding for the period and excludes the effects of any potentially dilutive securities. Diluted earnings per share, if presented, would include the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into common stock using the “treasury stock” and/or “if converted” methods as applicable. The computation of basic and diluted loss per share excludes potentially dilutive securities because their inclusion would be anti-dilutive. Potentially-dilutive securities excluded from the computation of basic and diluted net loss per share for the year ended December 31, 2016 are as follows: December 31, 2016 Options to purchase common stock 1,000,000 Totals 1,000,000 |
Summary of Significant Accoun16
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Potential Antidilutive Computation of Basic and Diluted Net Loss Per Share | Potentially-dilutive securities excluded from the computation of basic and diluted net loss per share for the year ended December 31, 2016 are as follows: December 31, 2016 Options to purchase common stock 1,000,000 Totals 1,000,000 |
Stock Options Awards and Gran17
Stock Options Awards and Grants (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Option Activity | A summary of the stock option activity and related information for the 2016 Plan from August 17, 2015 (date of inception) to December 31, 2016 is as follows: Weighted- Weighted-Average Average Remaining Aggregate Shares Exercise Price Contractual Term Intrinsic Value Outstanding at August 17, 2015 (date of inception) - Grants - Exercised - Canceled - Outstanding at December 31, 2015 - Grants 1,000,000 $ 0.01 5.00 $ 385,833 Exercised - Canceled - Outstanding at December 31,2016 1,000,000 $ 0.01 4.19 $ 385,833 Vested and expected to vest at December 31, 2016 1,000,000 $ 0.01 4.19 $ 385,833 Exercisable at December 31, 2016 1,000,000 $ 0.01 4.19 $ 385,833 |
Schedule of Fair Value Granted Options by Using Black Scholes Option Pricing Model | The fair value of the granted options for the twelve months ended December 31, 2016 was determined using the Black Scholes option pricing model with the following assumptions: Dividend yield: -0- % Volatility 88.44 % Risk free rate: 1.45 % Expected life: 5 years Estimated fair value of the Company’s common stock $ 0.3958 |
Schedule of Stock Option Outstanding | The following table presents information related to stock options at December 31, 2016: Options Outstanding Options Exercisable Weighted Average Exercisable Exercise Number of Remaining Life Number of Price Options In Years Options $ 0.01 1,000,000 4.19 1,000,000 |
Restated Unaudited Interim Fi18
Restated Unaudited Interim Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments | For the nine months ended as of September 30, 2016 As Previously Reported Adjustments As Restated Assets $ 352,066 $ - $ 352,066 Liabilities - - - Paid-in-Capital 887,337 (108,399 ) 778,938 Retained Earnings (535,484 ) 108,399 (427,085 ) Total Stockholders’ Equity 352,066 - 352,066 Revenue 1,500 - 1,500 Cost of revenue 1,500 - 1,500 Gross profit - - - Operating expenses 529,763 (108,399 ) 421,364 Income from operations (529,763 ) 108,399 421,364 Other income (expense) - - Income before taxes (529,763 ) 108,399 421,364 Tax (expense) benefit - - - Net income $ (529,763 ) $ 108,399 $ 421,364 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes Tables | |
Schedule of Deferred Tax Asset and Liability | Our deferred tax asset and liability as presented in the accompanying consolidated financial statements consist of the following: 2016 2015 Deferred Income Tax Assets: Net operating losses $ 41,042 $ 2,328 Total deferred income tax asset 41,042 2,328 Valuation allowance (41,042 ) (2,328 ) Deferred Income Tax Assets, net $ 0 $ 0 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation between taxes computed at the federal statutory rate and the consolidated effective tax rate is as follows: 2016 2015 Federal statutory tax rate 34.0 % 34.0 % State tax rate, net of federal tax benefit 6.0 % 6.0 % Adjustment in valuation allowances (12.5 )% (40.0 )% Stock Based Compensation (27.5 )% (0.0 )% Provision (Benefit) for Income Taxes -0- % -0- % |
Subsequent Events (Tables)
Subsequent Events (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Schedule of Granted Options Vesting | The Amendments provided for vesting schedules of the Granted Options, with the Granted Options now vesting as follows: Number of Granted Options Vesting Date 100,000 April 1, 2017 100,000 April 1, 2018 50,000 June 1, 2018 375,000 January 1, 2019 375,000 January 1, 2020 |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Details Narrative) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
FDIC insured limit amount | $ 250,000 |
Website Development Costs [Member] | |
Estimated useful life | 5 years |
Summary of Significant Accoun22
Summary of Significant Accounting Policies - Schedule of Potential Antidilutive Computation of Basic and Diluted Net Loss Per Share (Details) | 12 Months Ended |
Dec. 31, 2016shares | |
Totals | 1,000,000 |
Options To Purchase Common Stock [Member] | |
Totals | 1,000,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) | 4 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2015USD ($)shares | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)ft²shares | Nov. 17, 2016 | Feb. 04, 2016shares | |
Number of common shares issued | shares | 2,105,263 | 3,131,579 | |||
Related party revenue | $ | $ 12,374 | ||||
Cost of revenue | $ | $ 1,500 | $ 10,627 | |||
Pride [Member] | |||||
Equity ownership percentage | 80.00% | ||||
Executive Officers [Member] | |||||
Area of office | ft² | 800 | ||||
Reza Enterprises, Inc [Member] | |||||
Number of common shares issued | shares | 526,316 |
Stock Options Awards and Gran24
Stock Options Awards and Grants (Details Narrative) - USD ($) | Mar. 10, 2016 | Dec. 31, 2015 | Dec. 31, 2016 |
Number of options granted | 1,000,000 | ||
Market stock price | $ 0.3958 | ||
Exercise price | $ 0.01 | ||
Fair value of option vested | $ 387,450 | ||
Unrecognized compensation expense | |||
2016 Incentive Stock Option Plan [Member] | |||
Maximum number of shares to be issued | 2,500,000 | ||
Description of exercise price | The exercise price of an Incentive Stock Option should not be less than 110% of fair value of the common stock at the date of the grant for a 10% or more stockholder and 100% of fair value for a grantee who is not 10% stockholder. | ||
2016 Incentive Stock Option Plan [Member] | Maximum [Member] | |||
Award vesting period | 10 years | ||
Non Statutory Options [Member] | Director and Key Employees [Member] | |||
Number of options granted | 1,000,000 | ||
Exercise price | $ 0.01 |
Stock Options Awards and Gran25
Stock Options Awards and Grants - Schedule of Stock Option Activity (Details) - USD ($) | 4 Months Ended | 12 Months Ended |
Dec. 31, 2015 | Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Number of Shares Outstanding at beginning | ||
Number of Shares, Grants | 1,000,000 | |
Number of Shares, Exercised | ||
Number of Shares, Cancelled | ||
Number of Shares, Outstanding at end | 1,000,000 | |
Number of Shares, Vested and expected to vest at end | 1,000,000 | |
Number of Shares, Exercisable at end | 1,000,000 | |
Weighted-Average Exercise Price Outstanding at beginning | ||
Weighted-Average Exercise Price Grants | 0.01 | |
Weighted-Average Exercise Price Outstanding at end | 0.01 | |
Weighted-Average Exercise Price Vested and expected to vest at end | 0.01 | |
Weighted-Average Exercise Price Exercisable at end | $ 0.01 | |
Weighted-Average Remaining Contractual Term Grants | 5 years | |
Weighted-Average Remaining Contractual Term Outstanding at end | 4 years 2 months 9 days | |
Weighted-Average Remaining Contractual Term Vested and expected to vest at end | 4 years 2 months 9 days | |
Weighted-Average Remaining Contractual Term Exercisable at end | 4 years 2 months 9 days | |
Aggregate Intrinsic Value Grants | $ 385,833 | |
Aggregate Intrinsic Value Outstanding at end | $ 385,833 | |
Aggregate Intrinsic Value Vested and expected to vest at end | 385,833 | |
Aggregate Intrinsic Value Exercisable at end | $ 385,833 |
Stock Options Awards and Gran26
Stock Options Awards and Grants - Schedule of Fair Value Granted Options by Using Black Scholes Option Pricing Model (Details) | 12 Months Ended |
Dec. 31, 2016$ / shares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Dividend yield: | 0.00% |
Volatility | 88.44% |
Risk free rate: | 1.45% |
Expected life: | 5 years |
Estimated fair value of the Company's common stock | $ 0.3958 |
Stock Options Awards and Gran27
Stock Options Awards and Grants - Schedule of Stock Option Outstanding (Details) - Exercise Price $0.01 [Member] | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Number of Option Exercise Price | $ / shares | $ 0.01 |
Number of Options, Outstanding | 1,000,000 |
Weighted Average Remaining Life | 4 years 2 months 9 days |
Exercisable Number of Options | 1,000,000 |
Restated Unaudited Interim Fi28
Restated Unaudited Interim Financial Data - Schedule of Error Corrections and Prior Period Adjustments (Details) - USD ($) | 4 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2015 | Sep. 30, 2016 | Dec. 31, 2016 | Aug. 16, 2015 | |
Assets | $ 52,200 | $ 352,066 | $ 308,863 | |
Liabilities | ||||
Paid-in-Capital | 49,989 | 778,938 | 778,938 | |
Retained Earnings | (5,820) | (427,185) | (484,235) | |
Total Stockholders’ Equity | 44,380 | 352,066 | 295,016 | |
Revenue | 1,500 | 20,927 | ||
Cost of revenue | 1,500 | 10,627 | ||
Gross profit | 418 | |||
Operating expenses | 5,820 | 421,364 | 478,833 | |
Income from operations | (5,820) | 421,364 | (478,415) | |
Other income (expense) | ||||
Income before taxes | 421,364 | |||
Tax (expense) benefit | ||||
Net income | $ (5,820) | 421,364 | $ (478,415) | |
As Previously Reported [Member] | ||||
Assets | 352,066 | |||
Liabilities | ||||
Paid-in-Capital | 887,337 | |||
Retained Earnings | (535,484) | |||
Total Stockholders’ Equity | 352,066 | |||
Revenue | 1,500 | |||
Cost of revenue | 1,500 | |||
Gross profit | ||||
Operating expenses | 529,763 | |||
Income from operations | (529,763) | |||
Other income (expense) | ||||
Income before taxes | (529,763) | |||
Tax (expense) benefit | ||||
Net income | (529,763) | |||
Adjustment [Member] | ||||
Assets | ||||
Liabilities | ||||
Paid-in-Capital | (108,399) | |||
Retained Earnings | 108,399 | |||
Total Stockholders’ Equity | ||||
Revenue | ||||
Cost of revenue | ||||
Gross profit | ||||
Operating expenses | (108,399) | |||
Income from operations | 108,399 | |||
Other income (expense) | ||||
Income before taxes | 108,399 | |||
Tax (expense) benefit | ||||
Net income | $ 108,399 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Federal [Member] | ||
Operating loss carry forward, net | $ 41,042 | |
Operating loss carryforwards, expiration date, description | Future taxable income through 2036 | |
State [Member] | ||
Operating loss carry forward, net | $ 41,042 | $ 41,042 |
Operating loss carryforwards, expiration date, description | Future losses through 2036 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Asset and Liability (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Income Taxes - Schedule Of Deferred Tax Asset And Liability Details | ||
Net operating losses | $ 41,042 | $ 2,328 |
Total deferred income tax asset | 41,042 | 2,328 |
Valuation allowance | (41,042) | (2,328) |
Deferred Income Tax Assets, net | $ 0 | $ 0 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes - Schedule Of Effective Income Tax Rate Reconciliation Details | ||
Federal statutory tax rate | 34.00% | 34.00% |
State tax rate, net of federal tax benefit | 6.00% | 6.00% |
Adjustment in valuation allowances | (12.50%) | (40.00%) |
Stock Based Compensation | (27.50%) | (0.00%) |
Provision (Benefit) for Income Taxes | 0.00% | 0.00% |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 4 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2015 | Sep. 30, 2016 | Dec. 31, 2016 | Aug. 16, 2015 | |
Going Concern Details Narrative | ||||
Net loss | $ 5,820 | $ (421,364) | $ 478,415 | |
Net cash used in operations | 3,420 | 92,494 | ||
Cash and cash equivalents | 49,200 | 292,887 | ||
Stockholders' equity | 44,380 | 352,066 | 295,016 | |
Accumulated deficit | $ 5,820 | $ 427,185 | $ 484,235 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Mar. 10, 2017shares | Jan. 31, 2017$ / sharesshares | Dec. 31, 2015shares | Dec. 31, 2016shares | Feb. 22, 2017AUD | Jan. 31, 2017AUD |
Number of options granted | 1,000,000 | |||||
Subsequent Event [Member] | ||||||
Stock issued during period, shares, acquisitions | 3,800,000 | |||||
Acquisition, percentage | 100.00% | |||||
Acquisition shares assessment description | 10% of the Acquisition Shares, or 380,000 shares, were held in escrow pending the Company conducting an assessment of the net tangible asset value (the NTAV) of Pride as of the closing date. | |||||
Acquisitions per share price | $ / shares | $ 0.50 | |||||
Subsequent Event [Member] | Employees and Directors [Member] | ||||||
Number of options granted | 1,000,000 | |||||
Subsequent Event [Member] | Australia, Dollars [Member] | Maximum [Member] | ||||||
Net tangible asset value | AUD | AUD 300,000 | AUD 200,000 | ||||
Subsequent Event [Member] | Australia, Dollars [Member] | Minimum [Member] | ||||||
Net tangible asset value | AUD | AUD 200,000 | AUD 300,000 |
Subsequent Events - Schedule of
Subsequent Events - Schedule of Granted Options Vesting (Details) - shares | 4 Months Ended | 12 Months Ended |
Dec. 31, 2015 | Dec. 31, 2016 | |
Number of Granted Options | 1,000,000 | |
Subsequent Event [Member] | April 1, 2017 [Member] | ||
Number of Granted Options | 100,000 | |
Subsequent Event [Member] | April 1, 2018 [Member] | ||
Number of Granted Options | 100,000 | |
Subsequent Event [Member] | June 1, 2018 [Member] | ||
Number of Granted Options | 50,000 | |
Subsequent Event [Member] | January 1, 2019 [Member] | ||
Number of Granted Options | 375,000 | |
Subsequent Event [Member] | January 1, 2020 [Member] | ||
Number of Granted Options | 375,000 |