Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 20, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Veroni Brands Corp. | |
Entity Central Index Key | 0001693690 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 26,801,396 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Current Assets | ||
Cash & equivalents | $ 11,831 | $ 2,999 |
Accounts receivable, net allowance for doubtful accounts of $9,948 and $9,948 respectively | 506,553 | 13,160 |
Contract receivables with recourse | 459,811 | |
Inventory | 756,682 | 208,369 |
Prepaid expenses and other current assets | 17,673 | 106,317 |
Total Current Assets | 1,752,550 | 330,845 |
Total Assets | 1,752,550 | 330,845 |
Current Liabilities | ||
Accounts payable | 497,811 | 43,713 |
Accrued liabilities | 94,768 | 23,921 |
Notes and accounts payable - related parties including interest | 161,191 | 157,059 |
Notes payable - other | 330,000 | |
Contract receivables liability with recourse | 390,839 | |
Total Current Liabilities | 1,474,609 | 224,693 |
STOCKHOLDERS' EQUITY | ||
Preferred Stock, $0.0001 par value; 20,000,000 shares authorized; none outstanding as of March 31, 2019 and December 31, 2018 | ||
Common Stock, $0.0001 par value; 100,000,000 shares authorized; 26,801,397 and 26,568,400 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively | 2,680 | 2,656 |
Additional paid-in capital | 584,407 | 409,683 |
ACCUMULATED DEFICIT | (309,146) | (306,187) |
Total Stockholders' Equity | 277,941 | 106,152 |
Total Liabilities and Stockholders' Equity | $ 1,752,550 | $ 330,845 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 9,948 | $ 9,948 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 26,801,397 | 26,568,400 |
Common stock, shares outstanding | 26,801,397 | 26,568,400 |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | ||
Income Statement [Abstract] | |||
Revenue | $ 1,039,356 | ||
Cost of sales | 888,442 | ||
Gross Profit | 150,914 | ||
Selling and warehouse expenses | 86,377 | ||
General and administrative expenses | 47,829 | 30,157 | |
Total operating expenses | 134,206 | 30,157 | |
Net income (loss) from operations | 16,708 | (30,157) | |
Interest expense | 19,667 | ||
Interest expense - related party | |||
Total other expense | 19,667 | ||
Loss before income taxes | (2,959) | (30,157) | |
Income taxes | |||
Net Loss | $ (2,959) | $ (30,157) | |
Net loss per share: | |||
Basic and diluted | [1] | ||
Weighted average shares outstanding: | |||
Basic and diluted | 26,656,181 | 25,981,844 | |
[1] | less than $.01 |
Statements of Operations (Una_2
Statements of Operations (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | ||
Net loss per share Basic and diluted | [1] | ||
Maximum [Member] | |||
Net loss per share Basic and diluted | $ 0.01 | $ 0.01 | |
[1] | less than $.01 |
Statement of Changes in Equity
Statement of Changes in Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2017 | $ 1,830 | $ 83,826 | $ (47,357) | $ 38,299 |
Balance, shares at Dec. 31, 2017 | 18,300,000 | |||
Issuance of common stock for cash | $ 1,010 | 191,420 | 192,430 | |
Issuance of common stock for cash, shares | 10,096,600 | |||
Net loss for the quarter | (30,157) | (30,157) | ||
Balance at Mar. 31, 2018 | $ 1,830 | 275,246 | (77,514) | 200,572 |
Balance, shares at Mar. 31, 2018 | 28,396,600 | |||
Balance at Dec. 31, 2018 | $ 2,656 | 409,683 | (306,187) | 106,152 |
Balance, shares at Dec. 31, 2018 | 26,568,400 | |||
Issuance of common stock for cash | $ 21 | 152,229 | 152,250 | |
Issuance of common stock for cash, shares | 203,000 | |||
Issuance of common stock for services | $ 3 | 22,495 | 22,498 | |
Issuance of common stock for services, shares | 29,997 | |||
Net loss for the quarter | (2,959) | (2,959) | ||
Balance at Mar. 31, 2019 | $ 2,680 | $ 584,407 | $ (309,146) | $ 277,941 |
Balance, shares at Mar. 31, 2019 | 26,801,397 |
Statements of Cash Flow (Unaudi
Statements of Cash Flow (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flow from operating activities: | ||
Net Loss | $ (2,959) | $ (30,157) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Common stock issued for services | 22,498 | |
Accounts receivable | (493,393) | |
Contract receivables with recourse | (459,811) | |
Inventory | (548,313) | (168,319) |
Prepaid expenses | 88,644 | (5,021) |
Accounts payable | 454,098 | 5,403 |
Accrued liabilities | 70,847 | 7,901 |
Notes and accounts payable - related party including accrued Interest | 4,132 | |
Net cash used in operating activities | (864,257) | (190,193) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 152,250 | 192,640 |
Proceeds from issuance of notes payable | 330,000 | |
Proceeds from contract receivables with recourse | 390,839 | |
Net cash provided by financing activities | 873,089 | 192,640 |
Net change in cash | 8,832 | 2,447 |
Cash at the beginning of the period | 2,999 | 595 |
Cash at the end of the period | 11,831 | 3,042 |
Cash paid for: | ||
Interest | ||
Taxes |
Nature of Operations and Financ
Nature of Operations and Financial Condition | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Financial Condition | Note 1 - Nature of Operations and Financial Condition Veroni Brands Corp. (formerly European CPG Acquisition Corp. or Echo Sound Acquisition Corporation) (the “Company”) was incorporated on December 7, 2016 under the laws of the state of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisition. On August 31, 2017, the Company effected a change in control by the redemption of 19,750,000 shares of the then outstanding 20,000,000 shares of common stock. The then current officers and directors resigned and Igor Gabal was named the sole officer and director of the Company. Pursuant to the change in control, the Company changed its name to European CPG Acquisition Corp. On September I, 2017, the Company issued l0,000,000 shares of its common stock to two shareholders at par value of $0.000l and recorded share compensation of $1,000. On November 1, 2017, the name of the Company was changed to Veroni Brands Corp. The Company has been formed to acquire, operate, develop, grow and import premium European products into the U.S. market. Veroni Brands was created to search out unique, remarkable and desirable premium products across Europe and make them accessible to discerning consumers in the U.S. Veroni Brands strives to import the extraordinary and delight their consumers with experiences that had previously only been attainable in Europe. The Company became an exclusive importer and distributor of “Iron Energy” by Mike Tyson. The beverage became available to consumers in select Chicago area markets in May 2018 in three different flavors such as “Mojito,” “Zero Sugar” and “Original.” The Company will be introducing other flavors of “Iron Energy” in 2019. We take pride in the products we import and are proud to share them with our consumers. The Company expanded into imports and distribution of chocolate and related products sold to U.S. national retailers. Basis of presentation: unaudited interim financial information The accompanying interim condensed financial statements are unaudited. In opinion of management, the accompanying unaudited condensed financial statements contain all of the normal recurring adjustments necessary to present fairly the financial position and results of operations as of and for the periods presented. The interim results are not necessarily indicative of the results to be expected for the full year or any future period. Certain information and footnote disclosures normally included in the condensed financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company believes that the disclosures are adequate to make the interim information presented not misleading. These condensed financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto included in the Company’s Report on Form 10-K filed on April 16, 2019 for the years ended December 31, 2018 and 2017. Going Concern The Company has generated only minimal revenue since inception to date and has a net loss of $2,959 for the three months ending March 31, 2019. As of March 31, 2019, the Company had a cash balance available of approximately $11,831 and an accumulated deficit of $309,146. The Company’s ability to continue as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtaining additional financing from its shareholders or other sources, as may be required. The accompanying unaudited financial statements have been prepared assuming that the Company will continue as a going concern; however, the above condition raises substantial doubt about the Company’s ability to continue as a going concern. The unaudited financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. The Company failed to its meet minimum purchase requirements under its FoodCare Sp. z.o.o. (“FoodCare”) contract and could lose its exclusive rights to distribute in the U.S. Market. The Company is currently re-negotiating the agreement. The Company is evaluating various financing options in order to fund its continued startup of operations and expand the products being offered to its customers. The Company has established a relationship with a manufacturer to import and distribute chocolate and other related products. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Reclassifications Certain reclassifications have been made in the 2018 financial statements to conform to the 2019 presentation. These reclassifications have no effect on net loss for 2018. Advertising The Company’s policy is to expense advertising costs as incurred. Advertising expense for the three months ending March 31, 2019 and 2018 is $22,549 and $0, respectively. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates and assumptions include the carrying amount of inventory and associated reserves, and allowances in regards to revenue. Actual results could differ from those estimates. Revenue Recognition The majority of the Company’s revenue is recognized when it satisfies a single performance obligation by transferring control of its products to a customer. Control is generally transferred when the Company’s products are either shipped or delivered based on the terms contained within the underlying contracts or agreements. Given the startup nature of the Company, some distributors will require that the Company operate under consignment arrangements in the beginning of its contracts or agreements, generally for the first 90 days or until customer demand is established for the product. Under consignment, the Company retains control of the inventory located at the distributor and only records revenues when the distributor sells through to the ultimate retail establishment. The Company’s general payment terms are short-term in duration. The Company does not have significant financing components or payment terms. The Company did not have any material unsatisfied performance obligations as of March 31, 2019. Distribution expenses to transport the Company’s products, where applicable, and warehousing expense is included in selling expenses. Cash and Cash Equivalents Cash and cash equivalents include cash on hand and on deposit at banking institutions as well as all highly liquid short-term investments with original maturities of 90 days or less. Concentration of Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. The Company places its cash with high quality banking institutions. The Company did not have cash balances in excess of the Federal Deposit Insurance Corporation limit as of March 31, 2019 and 2018, respectively. Accounts Receivable and Concentration of Credit Risk Accounts receivable are recorded at the invoiced amounts less an allowance for doubtful accounts. The allowance for doubtful accounts is based on our estimate of the amount of probable credit losses in our accounts receivable. We determine the allowance for doubtful accounts based upon an aging of accounts receivable, historical experience and management judgment. Accounts receivable balances are periodically reviewed for collectability, and balances are charged off against the allowance when we determine that the potential for recovery is remote. An allowance for doubtful accounts of approximately $9,900 is reserved as of March 31, 2019 and December 31, 2018, respectively. We are exposed to credit risk in the normal course of business, primarily related to accounts receivable. To limit credit risk, management periodically reviews and evaluates the financial condition of its customers and maintains an allowance for doubtful accounts. As of March 31, 2019, we had two customers who comprised approximately 95% of our combined accounts and contract receivables and their combined amounts equaled approximately $926,300. During the three months ended March 31, 2019, we had two customers who accounted for approximately 91% of revenue. Distribution Agreements -Supplier Concentration In January 2018, the Company entered into a distributor agreement with FoodCare, which was amended and restated on January 30, 2018. FoodCare is a company organized under the laws of Poland. FoodCare is a manufacturer and supplier of desserts, cereals, energy drinks and other beverage products. FoodCare manufactures the “Iron Energy” drink, a product sponsored by celebrity Mike Tyson. Under the terms of the distribution agreement, the Company became the exclusive distributor of FoodCare products in the United States, Puerto Rico and the U.S. Virgin Islands. FoodCare is the sole supplier of Iron Energy to the Company. The term of the agreement is for ten years and gives the Company exclusive rights to distribute FoodCare products within the U.S. market, so long as the Company purchases the required quantity of product from FoodCare. The distribution agreement is terminable (1) upon mutual consent of the parties; (2) by either party in writing, without justification, if an issue is not amicable resolved within 30 days of such issue by providing 180 days’ notice and, in such case, the distributor shall lose it exclusivity rights; or (3) immediately in the event of notice of an uncured breach in the terms of the agreement. The Company’s only business line in 2018 was the distribution of the “Iron Energy” drink, the cancelation of the distribution agreement will require the Company to secure replacement product(s) to continue operations. The Company failed to meet its minimum purchases in 2018 and is re-negotiating the contract. Income Taxes Under ASC 740, Income Taxes, Loss Per Common Share Basic loss per common share excludes dilution and is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted loss per common share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the entity. As of March 31, 2019 and 2018, there are no outstanding dilutive securities. Fair Value of Financial Instruments The Company follows guidance for accounting for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements on a recurring basis. Additionally, the Company adopted guidance for fair value measurement related to nonfinancial items that are recognized and disclosed at fair value in the financial statements on a nonrecurring basis. The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. The carrying amounts of financial assets such as cash approximate their fair values because of the short maturity of these instruments. The carrying amounts of the Company’s financial instruments, which include cash and cash equivalents and accounts payable approximate their fair values at March 31, 2019 and 2018 due to their short-term nature and management’s belief that their carrying amounts approximate the amount for which the assets could be sold or the liabilities could be settled. Share-Based Compensation The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity–Based Payments to Non-Employees Emerging Growth Company The Company has elected to be an Emerging Growth Company as defined under the Jumpstart Our Business Startups Act of 2012 (“Jobs Act”). Included with this election, the Company has also elected to use the provisions within the Jobs Act that allow companies that go public to continue to use the private company adoption date rules for new accounting policies. Should the Company obtain revenues in excess of $1 billion on an annual basis, have its non-affiliated market capitalization increase to over $700 million as of the last day of its second quarter, or raise in excess of $1 billion in public offerings of its equity or instruments directly convertible into its equity, it will forfeit its status under the Jobs Act as an emerging growth company. New Accounting Pronouncements In 2014, the FASB issued guidance on revenue recognition, with final amendments issued in 2016. The guidance provides for a five-step model to determine the revenue recognized for the transfer of goods or services to customers that reflects the expected entitled consideration in exchange for those goods or services. It also provides clarification for principal versus agent considerations and identifying performance obligations. In addition, the FASB introduced practical expedients related to disclosures of remaining performance obligations, as well as other amendments related to guidance on collectability, non-cash consideration and the presentation of sales and other similar taxes. Financial statement disclosures required under the guidance will enable users to understand the nature, amount, timing, judgments and uncertainty of revenue and cash flows relating to customer contracts. The two permitted transition methods under the guidance are the full retrospective approach or a cumulative effect adjustment to the opening retained earnings in the year of adoption (cumulative effect approach). We will utilize a comprehensive approach to assess the impact of the guidance on our contract portfolio by reviewing our current accounting policies and practices to identify potential differences that would result from applying the new requirements to our revenue contracts, including evaluation of our performance obligations. In 2016, the FASB issued guidance on leases, with amendments issued in 2018. The guidance requires lessees to recognize most leases on the balance sheet but record expenses in the income statement in a manner similar to current accounting. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. The two permitted transition methods under the guidance are the modified retrospective transition approach, which requires application of the guidance for all comparative periods presented, and the cumulative effect adjustment approach, which requires prospective application at the adoption date. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740) which simplifies the presentation of deferred income taxes. This update requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments in this update are effective for annual periods beginning after December 15, 2017. Early adoption is permitted, and the amendments may be applied prospectively or retrospectively for all periods presented. In June 2018, an accounting update was issued to simplify the accounting for nonemployee share-based payment transactions resulting from expanding the scope of ASC Topic 718, Compensation-Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of ASC Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period). The amendments specify that ASC Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that ASC Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under ASC Topic 606, Revenue from Contracts with Customers. The amendments in this accounting update are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, but no earlier than an entity’s adoption date of ASC Topic 606. Under the JOBS Act, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company intends to take advantage of this extended transition period. Since the Company will not be required to comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies, the financial statements may not be comparable to financial statements of companies that comply with public company effective dates. The Company has determined that no other recent accounting pronouncements apply to its operations or could otherwise have a material impact on its consolidated financial statements. |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 3 – Inventory Finished Goods inventory consists of “Iron Energy” drinks, chocolates, and related products imported from Europe and is stated at the lower of actual cost (first-in, first-out method) or market. Cost includes shipping, import fees and handling fees. Inventory is as follows: March 31, 2019 December 31, 2018 Finished goods – in warehouse $ 737,455 $ 192,318 Finished goods - consignment 15,314 16,051 $ 752,769 $ 208,369 |
Prepaid Expenses
Prepaid Expenses | 3 Months Ended |
Mar. 31, 2019 | |
Prepaid Expenses | |
Prepaid Expenses | Note 4 – Prepaid Expenses Prepaid inventory Due to the development stage nature of the Company, our suppliers will generally require that we deposit funds in advance of shipment of inventory to us from Europe. Our current agreement with FoodCare includes provisions in which title for the inventory passes upon FoodCare loading the product onto truck transport for delivery to the seaports in Poland. Amounts transferred to our suppliers to secure delivery, but prior to transfer of title of those shipments, are recorded as prepaid inventory. March 31, 2019 December 31, 2018 Prepaid services $ 8,363 $ 3,674 Prepaid inventory 3,913 102,643 $ 12,276 $ 106,317 |
Notes Payable Other
Notes Payable Other | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable Other | Note 5 – Notes Payable Other On February 6, 2019, the Company issued a promissory note in the amount of $150,000, bearing interest at 4 percent monthly or the equivalent of 48 percent per annum rate and maturing on April 30, 2019. Interest is payable in shares of the Company’s common stock valued at $0.75 per share. The note’s maturity was extended to May 30, 2019. In May 2019, the Company repaid $105,000 of the principal. On February 22, 2019, the Company entered into a promissory note in the amount of $215,000. The note matures on December 31, 2019 and can be converted in shares of the Company’s common stock at $0.75 per share during the term of the note. As of March 31, 2019, $100,000 of the note remains to be funded by the lender. The Company agreed to issue to the lender 150,000 shares of the Company’s common stock on or before December 31, 2019 as a one-time consideration for making the loan in lieu of a cash payment of interest. During May 2019, the lender funded the balance of the note. On March 11, 2019, the Company issued a promissory note in the amount of $65,000, the note accrues interest at 5 percent every 45 days on the unpaid principal balance or the equivalent of 40.6% per annum rate. The loan matures on June 11, 2019. The lender has the option to convert interest due into common shares of the Company’s common stock at $0.75 per share. |
Contract Receivables Liability
Contract Receivables Liability with Recourse | 3 Months Ended |
Mar. 31, 2019 | |
Contract Receivables Liability With Recourse | |
Contract Receivables Liability with Recourse | Note 6 – Contract Receivables Liability with Recourse On February 21, 2019, the Company entered into a factoring agreement with Advance Business Capital d/b/a Interstate Capital for a term of one year. The Company initially factored approximately $459,000 of receivables and received an advance of 85% in the amount of $390,839. The Company bears all credit risk related to the receivables factored. The Company has given a security interest in substantially all of its assets and the Company’s president and a major shareholder have personallyguaranteed the debt. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | Note 7 – Stockholders’ Equity The Company is authorized to issue 100,000,000 shares of common stock and 20,000,000 shares of preferred stock. On December 7, 2016, the Company issued 20,000,000 founders’ common stock to two directors and officers at par for legal services provided to the Company. On August 31, 2017, an aggregate of 19,750,000 was contributed back to the Company pro rata from the then two shareholders. On September 1, 2017, the Company issued 2,800,000 shares of its common stock to Igor Gabal and 7,200,000 shares to GP Michigan, LLC at par value of $0.0001 in connection with the change in control. On December 1, 2017, the Company issued 8,050,000 shares of its common stock at par value of $0.0001. As of December 31, 2018 and 2017, 26,568,400 and 18,300,000 shares of common stock and no preferred stock, respectively, were issued and outstanding. From January 1 to March 31, 2019, the Company issued 232,997 shares of its common stock at $0.75 per share. 203,000 shares of common stock were issued in a private placement for $152,250 and 29,997 shares were issued for services to a consultant. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 8 –Related Party Transactions On May 23, 2017, GP Michigan, LLC entered into a contract with Tiber Creek Corporation for a myriad of services, one of which entails the change in control of the Company. The agreement also provides that Tiber Creek will effect a registration statement under the Securities Act of 1933 for the Company, will advise the Company on its structure and operations in order to effectively enter the public market, will introduce it to the brokerage and financial a community, and will assist it in locating a broker to file a Form 1Sc-211 application with FINRA for the public trading of its securities. GP Michigan agreed to pay Tiber Creek Corporation $80,000 for those services. As March 31, 2019, two significant shareholders of the Company advanced the Company $160,191. The advance was evidenced by two individual notes which are due on August 1, 2019 and have a fixed interest fee for the note term. Interest of $1,000 has been accrued as of March 31, 2019. The notes mature August 2, 2019. |
Office Lease
Office Lease | 3 Months Ended |
Mar. 31, 2019 | |
Office Lease | |
Office Lease | Note 9– Office Lease On February 4, 2019, the Company entered into a sublease for office space located in Bannockburn, IL. The sublease terminates on March 31, 2022. Rent for the three months ending March 31, 2019 and 2018 was $8,645 and $0, respectively. The annual rent per the sublease is as follows: First lease year $ 55,860 Second lease year 57,536 Third lease year 59,262 Final lease year 61,039 The Company paid a security deposit of $9,310. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 10– Commitments and Contingencies The Company’s operations are subject to the Federal Food, Drug and Cosmetic Act; the Bioterrorism Act; and regulations created by the U.S. Food and Drug Administration (“FDA”). The FDA regulates manufacturing and holding requirements for foods, specifies the standards of identity for certain foods and prescribes the format and content of certain information that must appear on food product labels. In addition, the published applicable rules under the Food Safety Modernization Act (“FSMA”) regulates food products imported into the United States and provides the FDA with mandatory recall authority. For the purchase of products harvested or manufactured outside the United States, and for the shipment of products to customers located outside of the United States, the Company is subject to customs laws regarding the import and export of shipments. The Company’s activities, including working with customs brokers and freight forwarders, are subject to regulation by U.S. Customs and Border Protection, part of the Homeland Security. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Reclassifications | Reclassifications Certain reclassifications have been made in the 2018 financial statements to conform to the 2019 presentation. These reclassifications have no effect on net loss for 2018. |
Advertising | Advertising The Company’s policy is to expense advertising costs as incurred. Advertising expense for the three months ending March 31, 2019 and 2018 is $22,549 and $0, respectively. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates and assumptions include the carrying amount of inventory and associated reserves, and allowances in regards to revenue. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition The majority of the Company’s revenue is recognized when it satisfies a single performance obligation by transferring control of its products to a customer. Control is generally transferred when the Company’s products are either shipped or delivered based on the terms contained within the underlying contracts or agreements. Given the startup nature of the Company, some distributors will require that the Company operate under consignment arrangements in the beginning of its contracts or agreements, generally for the first 90 days or until customer demand is established for the product. Under consignment, the Company retains control of the inventory located at the distributor and only records revenues when the distributor sells through to the ultimate retail establishment. The Company’s general payment terms are short-term in duration. The Company does not have significant financing components or payment terms. The Company did not have any material unsatisfied performance obligations as of March 31, 2019. Distribution expenses to transport the Company’s products, where applicable, and warehousing expense is included in selling expenses. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash on hand and on deposit at banking institutions as well as all highly liquid short-term investments with original maturities of 90 days or less. |
Concentration of Risk | Concentration of Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. The Company places its cash with high quality banking institutions. The Company did not have cash balances in excess of the Federal Deposit Insurance Corporation limit as of March 31, 2019 and 2018, respectively. |
Accounts Receivable and Concentration of Credit Risk | Accounts Receivable and Concentration of Credit Risk Accounts receivable are recorded at the invoiced amounts less an allowance for doubtful accounts. The allowance for doubtful accounts is based on our estimate of the amount of probable credit losses in our accounts receivable. We determine the allowance for doubtful accounts based upon an aging of accounts receivable, historical experience and management judgment. Accounts receivable balances are periodically reviewed for collectability, and balances are charged off against the allowance when we determine that the potential for recovery is remote. An allowance for doubtful accounts of approximately $9,900 is reserved as of March 31, 2019 and December 31, 2018, respectively. We are exposed to credit risk in the normal course of business, primarily related to accounts receivable. To limit credit risk, management periodically reviews and evaluates the financial condition of its customers and maintains an allowance for doubtful accounts. As of March 31, 2019, we had two customers who comprised approximately 95% of our combined accounts and contract receivables and their combined amounts equaled approximately $926,300. During the three months ended March 31, 2019, we had two customers who accounted for approximately 91% of revenue. |
Distribution Agreements -supplier Concentration | Distribution Agreements -Supplier Concentration In January 2018, the Company entered into a distributor agreement with FoodCare, which was amended and restated on January 30, 2018. FoodCare is a company organized under the laws of Poland. FoodCare is a manufacturer and supplier of desserts, cereals, energy drinks and other beverage products. FoodCare manufactures the “Iron Energy” drink, a product sponsored by celebrity Mike Tyson. Under the terms of the distribution agreement, the Company became the exclusive distributor of FoodCare products in the United States, Puerto Rico and the U.S. Virgin Islands. FoodCare is the sole supplier of Iron Energy to the Company. The term of the agreement is for ten years and gives the Company exclusive rights to distribute FoodCare products within the U.S. market, so long as the Company purchases the required quantity of product from FoodCare. The distribution agreement is terminable (1) upon mutual consent of the parties; (2) by either party in writing, without justification, if an issue is not amicable resolved within 30 days of such issue by providing 180 days’ notice and, in such case, the distributor shall lose it exclusivity rights; or (3) immediately in the event of notice of an uncured breach in the terms of the agreement. The Company’s only business line in 2018 was the distribution of the “Iron Energy” drink, the cancelation of the distribution agreement will require the Company to secure replacement product(s) to continue operations. The Company failed to meet its minimum purchases in 2018 and is re-negotiating the contract. |
Income Taxes | Income Taxes Under ASC 740, Income Taxes, |
Loss Per Common Share | Loss Per Common Share Basic loss per common share excludes dilution and is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted loss per common share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the entity. As of March 31, 2019 and 2018, there are no outstanding dilutive securities. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company follows guidance for accounting for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements on a recurring basis. Additionally, the Company adopted guidance for fair value measurement related to nonfinancial items that are recognized and disclosed at fair value in the financial statements on a nonrecurring basis. The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. The carrying amounts of financial assets such as cash approximate their fair values because of the short maturity of these instruments. The carrying amounts of the Company’s financial instruments, which include cash and cash equivalents and accounts payable approximate their fair values at March 31, 2019 and 2018 due to their short-term nature and management’s belief that their carrying amounts approximate the amount for which the assets could be sold or the liabilities could be settled. |
Share-Based Compensation | Share-Based Compensation The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity–Based Payments to Non-Employees |
Emerging Growth Company | Emerging Growth Company The Company has elected to be an Emerging Growth Company as defined under the Jumpstart Our Business Startups Act of 2012 (“Jobs Act”). Included with this election, the Company has also elected to use the provisions within the Jobs Act that allow companies that go public to continue to use the private company adoption date rules for new accounting policies. Should the Company obtain revenues in excess of $1 billion on an annual basis, have its non-affiliated market capitalization increase to over $700 million as of the last day of its second quarter, or raise in excess of $1 billion in public offerings of its equity or instruments directly convertible into its equity, it will forfeit its status under the Jobs Act as an emerging growth company. |
New Accounting Pronouncements | New Accounting Pronouncements In 2014, the FASB issued guidance on revenue recognition, with final amendments issued in 2016. The guidance provides for a five-step model to determine the revenue recognized for the transfer of goods or services to customers that reflects the expected entitled consideration in exchange for those goods or services. It also provides clarification for principal versus agent considerations and identifying performance obligations. In addition, the FASB introduced practical expedients related to disclosures of remaining performance obligations, as well as other amendments related to guidance on collectability, non-cash consideration and the presentation of sales and other similar taxes. Financial statement disclosures required under the guidance will enable users to understand the nature, amount, timing, judgments and uncertainty of revenue and cash flows relating to customer contracts. The two permitted transition methods under the guidance are the full retrospective approach or a cumulative effect adjustment to the opening retained earnings in the year of adoption (cumulative effect approach). We will utilize a comprehensive approach to assess the impact of the guidance on our contract portfolio by reviewing our current accounting policies and practices to identify potential differences that would result from applying the new requirements to our revenue contracts, including evaluation of our performance obligations. In 2016, the FASB issued guidance on leases, with amendments issued in 2018. The guidance requires lessees to recognize most leases on the balance sheet but record expenses in the income statement in a manner similar to current accounting. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. The two permitted transition methods under the guidance are the modified retrospective transition approach, which requires application of the guidance for all comparative periods presented, and the cumulative effect adjustment approach, which requires prospective application at the adoption date. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740) which simplifies the presentation of deferred income taxes. This update requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments in this update are effective for annual periods beginning after December 15, 2017. Early adoption is permitted, and the amendments may be applied prospectively or retrospectively for all periods presented. In June 2018, an accounting update was issued to simplify the accounting for nonemployee share-based payment transactions resulting from expanding the scope of ASC Topic 718, Compensation-Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of ASC Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period). The amendments specify that ASC Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that ASC Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under ASC Topic 606, Revenue from Contracts with Customers. The amendments in this accounting update are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, but no earlier than an entity’s adoption date of ASC Topic 606. Under the JOBS Act, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company intends to take advantage of this extended transition period. Since the Company will not be required to comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies, the financial statements may not be comparable to financial statements of companies that comply with public company effective dates. The Company has determined that no other recent accounting pronouncements apply to its operations or could otherwise have a material impact on its consolidated financial statements. |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory is as follows: March 31, 2019 December 31, 2018 Finished goods – in warehouse $ 737,455 $ 192,318 Finished goods - consignment 15,314 16,051 $ 752,769 $ 208,369 |
Prepaid Expenses (Tables)
Prepaid Expenses (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Prepaid Expenses | |
Schedule of Prepaid Expenses | March 31, 2019 December 31, 2018 Prepaid services $ 8,363 $ 3,674 Prepaid inventory 3,913 102,643 $ 12,276 $ 106,317 |
Office Lease (Tables)
Office Lease (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Office Lease Tables Abstract | |
Schedule of Annual Rent per Sublease | The annual rent per the sublease is as follows: First lease year $ 55,860 Second lease year 57,536 Third lease year 59,262 Final lease year 61,039 |
Nature of Operations and Fina_2
Nature of Operations and Financial Condition (Details Narrative) - USD ($) | Dec. 01, 2017 | Sep. 01, 2017 | Aug. 31, 2017 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Redemption of shares | 19,750,000 | 2,020,000 | |||||
Outstanding common stock | 20,000,000 | 26,801,397 | 26,568,400 | 18,300,000 | |||
Number of common stock issued | 8,050,000 | ||||||
Price per share | $ 0.0001 | ||||||
Net loss | $ (2,959) | $ (30,157) | |||||
Cash balance | 11,831 | $ 3,042 | $ 2,999 | $ 595 | |||
Accumulated deficit | $ (309,146) | $ (306,187) | |||||
Two Shareholders [Member] | |||||||
Number of common stock issued | 10,000,000 | ||||||
Price per share | $ 0.0001 | ||||||
Share compensation | $ 1,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) | 3 Months Ended | ||
Mar. 31, 2019USD ($)Customershares | Mar. 31, 2018USD ($)shares | Dec. 31, 2018USD ($) | |
Advertising expense | $ 22,549 | $ 0 | |
Allowance for doubtful accounts | $ 9,900 | $ 9,900 | |
Number of customer | Customer | 2 | ||
Concentration risk percentage | 95.00% | ||
Accounts and contract receivables | $ 926,300 | ||
Valuation allowances description | As of March 31, 2018 and December 31, 2018, there were no net deferred tax assets, as the Company setup a 100% valuation allowance, due to the uncertainty of the realization of net operating loss carryforwards prior to their expiration. | ||
Deferred tax assets | |||
Dilutive securities | shares | |||
Emerging growth company description | The Company has elected to be an Emerging Growth Company as defined under the Jumpstart Our Business Startups Act of 2012 ("Jobs Act"). Included with this election, the Company has also elected to use the provisions within the Jobs Act that allow companies that go public to continue to use the private company adoption date rules for new accounting policies. Should the Company obtain revenues in excess of $1 billion on an annual basis, have its non-affiliated market capitalization increase to over $700 million as of the last day of its second quarter, or raise in excess of $1 billion in public offerings of its equity or instruments directly convertible into its equity, it will forfeit its status under the Jobs Act as an emerging growth company. | ||
Revenue [Member] | |||
Concentration risk percentage | 91.00% |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory [Line Items] | ||
Inventory | $ 756,682 | $ 208,369 |
Finished Goods in Warehouse [Member] | ||
Inventory [Line Items] | ||
Inventory | 737,455 | 192,318 |
Finished Goods Consignment [Member] | ||
Inventory [Line Items] | ||
Inventory | $ 15,314 | $ 16,051 |
Prepaid Expenses - Schedule of
Prepaid Expenses - Schedule of Prepaid Expenses (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Prepaid Expenses | ||
Prepaid services | $ 8,363 | $ 3,674 |
Prepaid inventory | 3,913 | 102,643 |
Total prepaid expenses | $ 17,673 | $ 106,317 |
Notes Payable Other (Details Na
Notes Payable Other (Details Narrative) - USD ($) | Mar. 11, 2019 | Feb. 22, 2019 | Feb. 06, 2019 | Dec. 01, 2017 | Mar. 31, 2019 |
Common stock shares issued | 8,050,000 | ||||
Promissory Note [Member] | |||||
Debt face amount | $ 65,000 | $ 215,000 | $ 150,000 | ||
Debt interest | 5.00% | 4.00% | |||
Effective interest | 40.60% | 48.00% | |||
Debt maturity period | Dec. 31, 2019 | Dec. 31, 2019 | Apr. 30, 2019 | ||
Debt instrument exercise price | $ 0.75 | $ 0.75 | $ 0.75 | ||
Debt maturity period,description | The note's maturity was extended to May 30, 2019 | ||||
Promissory Note [Member] | Lender [Member] | |||||
Debt face amount | $ 100,000 | ||||
Common stock shares issued | 150,000 | ||||
Promissory Note [Member] | May 2019 [Member] | |||||
Repayments for other note payable | $ 105,000 |
Contract Receivables Liabilit_2
Contract Receivables Liability with Recourse (Details Narrative) - Advance Business Capital LLC [Member] | Feb. 21, 2019USD ($) |
Accounts receivable, net | $ 459,000 |
Agreement term | 1 year |
Accounts receivable received in advance, percentage | 85.00% |
Accounts receivable received in advance | $ 390,839 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Dec. 01, 2017 | Sep. 01, 2017 | Sep. 01, 2017 | Aug. 31, 2017 | Dec. 07, 2016 | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Class of Stock [Line Items] | ||||||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | ||||||
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | ||||||
Price per share | $ 0.0001 | |||||||
Common stock issued during period | 8,050,000 | |||||||
Common stock, shares issued | 26,801,397 | 26,568,400 | 18,300,000 | |||||
Common stock, shares outstanding | 20,000,000 | 26,801,397 | 26,568,400 | 18,300,000 | ||||
Preferred stock, shares issued | ||||||||
Preferred stock, shares outstanding | ||||||||
Common stock, shares issued for services, value | $ 22,498 | |||||||
Igor Gabal [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, shares issued for services | 2,800,000 | |||||||
GP Michigan, LLC [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, shares issued for services | 7,200,000 | |||||||
Price per share | $ 0.0001 | $ 0.0001 | ||||||
Two Shareholders [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Price per share | $ 0.0001 | $ 0.0001 | ||||||
Common stock issued during period | 10,000,000 | |||||||
Common Stock [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, shares issued for services | 29,997 | |||||||
Price per share | $ 0.75 | |||||||
Common stock issued during period | 232,997 | |||||||
Common stock, shares issued for services, value | $ 3 | |||||||
Common Stock [Member] | Private Placement [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, shares issued for services | 203,000 | |||||||
Common stock, shares issued for services, value | $ 152,250 | |||||||
Legal Service [Member] | Two Shareholders [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, shares issued for services | 19,750,000 | |||||||
Two Directors and Officers [Member] | Legal Service [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, shares issued for services | 20,000,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | May 23, 2017 | Mar. 31, 2019 | Dec. 31, 2018 |
Related Party Transaction [Line Items] | |||
Due to related party | $ 161,191 | $ 157,059 | |
Two Significant Shareholders [Member] | Two Individual Notes [Member] | |||
Related Party Transaction [Line Items] | |||
Due to related party | 160,191 | ||
Accrued interest | $ 1,000 | ||
Debt instrument maturity date | Aug. 2, 2019 | ||
GP Michigan, LLC [Member] | Tiber Creek Corporation [Member] | |||
Related Party Transaction [Line Items] | |||
Expenses paid by stockholder contributed as capital | $ 80,000 |
Office Lease (Details Narrative
Office Lease (Details Narrative) - USD ($) | Feb. 04, 2019 | Mar. 31, 2019 | Mar. 31, 2018 |
Lease, Cost [Abstract] | |||
Lease termination date | Mar. 31, 2022 | ||
Rent expenses | $ 8,645 | $ 0 | |
Security deposit | $ 9,310 |
Office Lease - Schedule of Annu
Office Lease - Schedule of Annual Rent per Sublease (Details) | Feb. 04, 2019USD ($) |
Lease, Cost [Abstract] | |
First lease year | $ 55,860 |
Second lease year | 57,536 |
Third lease year | 59,262 |
Final lease year | $ 61,039 |