Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 10, 2014 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'Elite Data Services, Inc. | ' |
Entity Central Index Key | '0000704366 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Is Entity a Well-known Seasoned Issuer | 'No | ' |
Is Entity a Voluntary Filer | 'No | ' |
Is Entity's Reporting Status Current | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 18,429,108 |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2014 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Current Assets | ' | ' |
Cash | $1,571 | $2,884 |
Total Current Assets | 1,571 | 2,884 |
OTHER ASSETS: | ' | ' |
Intangible assets | 589,041 | ' |
Total Other Assets | 589,041 | ' |
Total Assets | 590,612 | 2,884 |
CURRENT LIABILITIES: | ' | ' |
Accounts payable and accrued liabilities | 433,375 | 313,202 |
Subscriptions repayable | 80,000 | ' |
Loans from a related party | 149,924 | 37,424 |
Line of credit payable | 151,000 | 151,000 |
Contingent consideration payable | 566,212 | 906,574 |
Total Current Liabilities | 1,380,511 | 1,408,200 |
LONG TERM DEBT: | ' | ' |
Note payable to related party | 587,564 | ' |
Total liabilities | 1,968,075 | 1,408,200 |
STOCKHOLDERS' DEFICIT: | ' | ' |
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; issued and outstanding and 0, respectively | ' | ' |
Common stock, $0.0001 par value; 50,000,000 shares authorized; issued and outstanding 18,429,108 and 150,488, respectively | 1,843 | 15 |
Stock subscriptions | 20,000 | 155,000 |
Additional paid-in capital | 5,022,145 | 4,907,380 |
Deficit accumulated | -6,421,451 | -6,467,711 |
Total Stockholders' Deficit | -1,377,463 | -1,405,316 |
Total Liabilities and Stockholders' Deficit | $590,612 | $2,884 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Stockholders' Deficit | ' | ' |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, authorized | 10,000,000 | 10,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, authorized | 50,000,000 | 50,000,000 |
Common stock, issued | 18,429,108 | 150,488 |
Common stock, outstanding | 18,429,108 | 150,488 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Condensed Consolidated Statements Of Operations | ' | ' | ' | ' |
Revenue | $3,192 | ' | $12,621 | ' |
OPERATING EXPENSES | ' | ' | ' | ' |
Consulting services | 6,000 | ' | 38,500 | 70,000 |
Project development costs | ' | ' | 29,000 | ' |
General and administrative | 31,323 | 78,360 | 111,937 | 252,564 |
Total Operating Expenses | 37,323 | 78,360 | 179,437 | 322,564 |
LOSS FROM OPERATIONS | -34,131 | -78,360 | -166,816 | -322,564 |
OTHER INCOME (EXPENSE): | ' | ' | ' | ' |
Gain on extinguishment of debt | 164,999 | ' | 280,246 | ' |
Interest expense - other | -8,418 | -10,679 | -19,743 | -31,482 |
Interest expense - related parties | -21,656 | ' | -47,427 | ' |
Other | ' | ' | ' | -40 |
Total Other Income (Expense) | 134,925 | -10,679 | 213,076 | -31,522 |
NET INCOME (LOSS) | $100,794 | ($89,039) | $46,260 | ($354,086) |
Net income (loss) per common share, basic and diluted | $0 | ($1.41) | $0 | ($5.58) |
Weighted Average Common Shares Outstanding: Basic and diluted | 17,423,673 | 63,468 | 15,582,842 | 63,468 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
OPERATING ACTIVITIES: | ' | ' |
Net income (loss) | $46,260 | ($354,086) |
Adjustments to reconcile net loss to net cash used by operating activities: | ' | ' |
Gain on extinguishment of debt | -280,246 | ' |
Warrants issued for services | ' | 130,000 |
Changes in operating assets and liabilities: | ' | ' |
Prepaid expense | ' | -1,560 |
Accounts payable and accrued expenses | 120,173 | 75,601 |
Income taxes payable | ' | -238 |
Net cash used in operating activities | -113,813 | -150,283 |
FINANCING ACTIVITIES: | ' | ' |
Cash received from shareholder | ' | 100,007 |
Proceeds from loan from related parties | 112,500 | 56,953 |
Net cash provided by financing activities | 112,500 | 156,960 |
NET (DECREASE) INCREASE CASH | -1,313 | 6,677 |
CASH BEGINNING OF THE PERIOD | 2,884 | 592 |
CASH END OF THE PERIOD | 1,571 | 7,269 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ' | ' |
Income taxes paid | ' | ' |
Interest paid | ' | ' |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ' | ' |
Issuance of common stock in connection with the purchase of classifiedride.com | 1,400 | ' |
Issuance of common stock in connection with the purchase of Autoglance, LLC | 77 | ' |
Issuance of common stock for conversion of debt | 340,362 | ' |
Note payable for the purchase of classifiedride.com (Note 3) | $587,564 | ' |
DESCRIPTION_OF_BUSINESS
DESCRIPTION OF BUSINESS | 9 Months Ended |
Sep. 30, 2014 | |
Description Of Business | ' |
1 - DESCRIPTION OF BUSINESS | ' |
Elite Data Services, Inc. (hereinafter the “Company”, “Our”, “We” or “Us”) changed its name from Dynamic Energy Alliance Corporation on November 4, 2013. Prior to that, we were formerly Mammatech Corporation, and were incorporated in the State of Florida on November 23, 1981 under the name Mammathetics Corp. | |
The Company is engaged primarily in the marketing and advertising sector pertaining to the following:www.classifiedride.com (“ClassifiedRide”) and www.autoglance.com ( “Autoglance”). Launched to the public in February 2012, ClassifiedRide’s platform was designed to revolutionize the selling and buying for online automotive markets. Currently, ClassifiedRide provides a classified listing platform where users can list their vehicle, truck, boat (i.e. anything that has a motor) to the Company’s website (either by free or paid listing options). The main premise of the website is to aid the private seller in selling or trading their vehicle. The Company, in turn, then works as the community leader to establish relationships between buyers and sellers using social media platforms and consumer customer support incentives. These relationships are used to generate revenue from private sellers, dealerships, affiliate lead providers, and third party advertisers. | |
Autoglance is a search engine of used cars that prioritizes and compares inventory in individualized markets by displaying the best deals first while hiding listings that are older, more expensive, and have more mileage. Autoglance currently has a provisional patent for this method of organizing and displaying vehicles. More specifically, Autoglance’s invention group’s vehicles of the same make and model in a market location to determine the best price based on the market value of the vehicle. Vehicles that are deemed worse deals are hidden from the user. The user may easily see hidden cars if he/she wishes by the click of a button. |
BASIS_OF_PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2014 | |
Basis Of Presentation | ' |
2 - BASIS OF PRESENTATION | ' |
The accompanying unaudited condensed consolidated financial statements of Elite Data Services, Inc. (the "Company") are presented in accordance with the requirements for Form 10-Q and Regulation S-X. Accordingly, they do not include all of the disclosures required by generally accepted accounting principles. In the opinion of management, all adjustments (all of which were of a normal recurring nature) considered necessary to fairly present the financial position, results of operations, and cash flows of the Company on a consistent basis, have been made. | |
These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended December 31, 2013 filed with the SEC on May 12, 2014. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited consolidated financial statements for the preceding fiscal year, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. Accordingly, footnote disclosure, which would substantially duplicate the disclosure contained in the Company’s consolidated financial statements for the fiscal year ended December 31, 2013, has been omitted. The results of operations for the nine month period ended September 30, 2014 are not necessarily indicative of results for the entire year ending December 31, 2014. | |
Going Concern | |
The Company has a net loss from operation of $166,816 and accumulated deficit of $6,421,451. The Company currently has only limited working capital with which to continue its operating activities. The amount of capital required to sustain operations is subject to future events and uncertainties. The Company must secure additional working capital through loans, sale of equity securities, or a combination, in order to implement its business plans. There can be no assurance that such funding will be available in the future, or available on commercially reasonable terms. These conditions raise substantial doubt about the Company's ability to continue as a going concern. | |
The accompanying unaudited condensed consolidated financial statements have been presented on the basis of the continuation of the Company as a going concern and do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | |
Sep. 30, 2014 | ||
Summary Of Significant Accounting Policies | ' | |
3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | |
Basis of Presentation | ||
The condensed consolidated financial statements have been prepared in accordance with Generally Accepted Accounting Principles (‘GAAP’) and include the accounts of the Company and its subsidiaries, Dynamic Energy Development Corporation and Transformation Consulting, Inc. All intercompany balances and transactions have been eliminated. | ||
Use of Estimates | ||
Preparation of the Company's financial statements in conformity with United States GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as well as the reported amounts of revenues and expenses. Accordingly, actual results could differ from those estimates. | ||
Reclassifications | ||
Certain reclassifications have been made in Statement of Operations during the quarter ended June 30, 2014. These reclassifications impacted the classification of certain items within the Statement ofOperations: relating to classification of consulting expenses and project development costs. The reclassifications had no impact on previously reported total operating expenses, net loss, or stockholders' equity. | ||
Valuation of Intangible Assets and Note Payable to Related Party | ||
The Company’s intangible asset value and note balance to a related party were reduced to the appropriate carrying value of $589,041as of June 30, 2014. The change was done in accordance with GAAP, ASC 805-50-30 which relates to the carrying value of assets and liabilities at the date of transfer by related parties. | ||
Development Costs | ||
Development costs are expensed in the period they are incurred unless they meet specific criteria related to technical, market and financial feasibility, as determined by management, including but not limited to the establishment of a clearly defined future market for the product, and the availability of adequate resources to complete the project. If all criteria are met, the costs are deferred and amortized over the expected useful life, or written off if a product is abandoned. For the period ended September 30, 2014 and 2013, total development costs amounted to $29,000 and $0, respectively. At September 30, 2014 and December 31, 2013, the Company had no deferred product development costs. | ||
Income Taxes | ||
Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted the accounting standards codified in ASC 740, Income Taxes as of its inception. Pursuant to those standards, the Company is required to compute tax asset benefits for net operating losses carried forward. Potential benefit of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not that it will utilize the net operating losses carried forward in future years. | ||
ASC 740-10-25 prescribes recognition thresholds that must be met before a tax position is recognized in the financial statements and provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. An entity may only recognize or continue to recognize tax positions that meet a "more likely than not" threshold. Based on its evaluation, the Company has concluded that there are no significant uncertain tax positions requiring recognition in its financial statements. | ||
The Company does not have any unrecognized tax benefits as of September 30, 2014 and December 31, 2013 that, if recognized, would affect the Company's effective income tax rate. The Company's policy is to recognize interest and penalties related to income tax issues as components of income tax expense. The Company did not recognize or have any accrual for interest and penalties relating to income taxes as of September 30, 2014 and December 31, 2013. | ||
Cash and Cash Equivalents | ||
Cash and cash equivalents, if any, include all highly liquid instruments with an original maturity of three months or less at the date of purchase. At the period ended September 30, 2014, the Company had no cash equivalents. | ||
Fair Value of Financial Instruments | ||
The Company accounts for the fair value of financial instruments in accordance with the FASB ASC Topic 820, Fair Value Measurements and Disclosures ("Topic 820"). Topic 820 defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. | ||
The three levels are defined as follows: | ||
Level 1 | Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. | |
Level 2 | Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. | |
Level 3 | inpuInputs to the valuation methodology are unobservable and significant to the fair measurement. | |
The fair value of the Company's cash and cash equivalents, accrued liabilities and accounts payable approximate carrying value because of the short-term nature of these items. | ||
Revenue Recognition | ||
The Company recognizes revenue in accordance with the FASB ASC Section 605-10-S99, Revenue Recognition, Overall, SEC Materials ("Section 605-10-S99"). Section 605-10-S99 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services rendered; (3) the fee is fixed and determinable; and (4) collectability is reasonably assured. | ||
Net Income (Loss) Per Common Share | ||
Basic income (loss) per common share (“EPS”) is calculated by dividing the income (loss) available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The Company currently has no dilutive securities and as such, basic and diluted income (loss) per share is the same for all periods presented. | ||
Share Purchase Warrants | ||
The Company accounts for common share purchase warrants at fair value in accordance with ASC 815, Derivatives and Hedging. The Black-Scholes option pricing valuation method is used to determine fair value of these warrants. Use of this method requires that the Company make assumptions regarding stock volatility, dividend yields, expected term of the warrants and risk-free interest rates. | ||
Recently Issued Accounting Pronouncements | ||
Recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC during the current reporting period did not, or are not, believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended | |
Sep. 30, 2014 | ||
Related Party Transactions | ' | |
4 - RELATED PARTY TRANSACTIONS | ' | |
a) | Loans payable to related party – Myers - LOC | |
The principle amount due Sarah Myers (director and executive officer of the Company, the related party) at September 30, 2014, was $136,599, represents an unsecured promissory note and addendums (“Myers – LOC”). These amounts are unsecured and bear interest at the rate of 12% per annum. The Myers – LOC is due and payable on April 1, 2015. The accrued interest under the Myers – LOC as of September 30, 2014 was $14,392. | ||
B )Loans payable to related party – Frye | ||
On April 14, 2014, the Company entered into a promissory note with Stephen Frye, an executive officer (President) and director of the Company, for $13,500. The principle amount due Mr. Frye as of September 30, 2014 was $13,325. These amounts are unsecured and bear interest at the rate of 12% per annum.The note is due and payable on April 2015.The accrued interest under the Note as of September 30, 2014 was $718. | ||
c) January 13, 2014 Agreement - ClassifiedRide | ||
On January 13, 2014, the Company entered into an asset purchase agreement with Baker Myers and Associates, LLC (“Baker Myers ”) to acquire certain assets including, www.classifiedride.com, whose platform was designed to revolutionize the selling and buying platform for online automotive markets. Ms. Myers (our Chief Operations Officer and Director, is the managing member and sole owner of Baker Myers. As consideration for the sale, the Company entered into a promissory note for $3,000,000 with an interest rate of 7% per annum and issued 14,000,000 shares of the Company’s common stock. At June 30, 2014, the carrying value of the assets was reduced pursuant to the transaction being made by a related party under GAAP ASC 805-50-30, thereby reducing the value of the asset by $2,412,436 to $587, 564. As a result, the Baker Myers note was restated such that the principal amount was reduced to $587, 564, the interest rate was set at 8% per annum, and interest re-calculated from the contract date based on the reduced principal balance of the note. At September 30, 2014, the note balance and accrued interest was $587,487 and $32,355, respectively. | ||
d) January 15, 2014 Agreement - Autoglance | ||
On January 15, 2014, the Company entered into an Agreement with Baker Myers for 51% of the membership interest of Autoglance, LLC, a Tennessee Limited Liability Company, and with it majority control over all owned assets of Autoglance, LLC, including the website www.autoglance.com (collectively “Autoglance”) for 765,000 shares the Company’s common stock as consideration. |
CAPITAL_STOCK
CAPITAL STOCK | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Capital Stock | ' | ||||||||
5 - CAPITAL STOCK | ' | ||||||||
Authorized Stock | |||||||||
The Company is authorized to issue 10,000,000 shares of preferred stock, having a par value of $0.0001 per share, and 50,000,000 shares of common stock, having a par value of $0.0001 per share. | |||||||||
Issued and Outstanding | |||||||||
Preferred Stock | |||||||||
As of September 30, 2014, the Company had not issued any preferred stock. | |||||||||
Common Stock | |||||||||
At September 30, 2014, the Company had 18,429,108 shares of common stock issued and outstanding. | |||||||||
During the nine months ended September 30, 2014, the Company issued 18,278,620 shares of common stock as follows: | |||||||||
On January 13, 2014, the Company issued 14,000,000 shares of the Company’s Common Stock in conjunction with its asset purchase agreement to acquire www.classifiedride.com.See further discussion at Note 1 and 4. | |||||||||
On January 15, 2014, the Company issued 765,000 shares of the Company’s Common Stock for 51% of the membership interests of Autoglance, LLC, a Tennessee Limited Liability Company. See discussion at Note 1. | |||||||||
On March 14, 2014, the Company entered into a note conversion agreement with Rocky Road Capital, Inc. to convert 12.725% of the note balance, which was due to a former director and subsequently assigned to Rocky Road Capital, Inc., into 1,153,620 shares of Common Stock at $0.10 per share, as partial payment for $115,362, thereby reducing the balance owed to $791,212. The Company recognized a gain of $115,247 on extinguishment of the debt, as a result of this transaction. | |||||||||
On May 22, 2014, the Board of Directors approved three subscription agreements aggregating $55,000 and authorized issuance of 110,000 shares of common stock pursuant to the terms of the subscription agreements. Proceeds of $55,000 were received in November 2013. | |||||||||
On July 11, 2014, the Company entered into a note conversion agreement with Rocky Road Capital, Inc. to convert $100,000 of the balance, which was due and in default as of December 31, 2011, to a former director and subsequently assigned to Rocky Road Capital, Inc., into 1,000,000 shares of Common Stock at $0.10 per share, as partial payment for $100,000, thereby reducing the balance owed to $691,212. The Company recognized a gain of $72,186 on extinguishment of the debt, as a result of this transaction. | |||||||||
On August 18, 2014, the Company entered into a note conversion agreement with Rocky Road Capital, Inc. to convert $50,000 of the note balance, which was due to a former director and subsequently assigned to Rocky Road Capital, Inc., into 500,000 shares of Common Stock at $0.10 per share, as partial payment for $50,000, thereby reducing the balance owed to $641,212. The Company recognized a gain of $36,903 on extinguishment of the debt, as a result of this transaction. | |||||||||
On September 17, 2014, the Company entered into a note conversion agreement with Rocky Road Capital, Inc. to convert $75,000 of the note balance, which was due to a former director and subsequently assigned to Rocky Road Capital, Inc., into 750,000 shares of Common Stock at $0.10 per share, as partial payment for $75,000, thereby reducing the balance owed to $566,212. The Company recognized a gain of $55,910 on extinguishment of the debt, as a result of this transaction. | |||||||||
In September 2013, the Company entered into subscription agreements with Cape Mackinnon, Inc. and EV Tech LLC in exchange for $80,000. The Company agreed to settle this sum, either with common stock at $0.50 per share by September 2014 or repay the sum of $80,000 plus interest at an annual rate of 8%. As of September 30, 2014 the Company had not issued common stock for this subscription and reclassified the full sum to current liabilities. The Company also has accrued interest of $6,609 as of September 30, 2014 related to this agreement. | |||||||||
Below is a summary of the Contingent Consideration Payable at September 30, 2014: | |||||||||
(Unaudited) | (Audited) | ||||||||
As of | As of | ||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Contingent Consideration Due | $ | 2,000,000 | $ | 2,000,000 | |||||
Less payments | (984,638 | ) | (984,638 | ) | |||||
Payment of exercise of warrants | (108,788 | ) | (108,788 | ) | |||||
Conversion of contingent consideration to common stock | (340,362 | ) | - | ||||||
$ | 566,212 | $ | 906,574 | ||||||
The contingent consideration is pursuant to an Agreement between former director, Charles R. Cronin and the Company’s wholly owned subsidiary, Dynamic Energy Development Corporation, dated February 25, 2011 for the purchase of Transformation Consulting Inc. for a total purchase price of $2,000,000. Through December 31, 2012, net refunds, made to Mr. Cronin totaled $984,638, leaving an outstanding balance of $1,015,362 remaining. On September 30, 2013, Cronin entered into an Assignment and Assumption Agreement in which Habanero Properties (“Habanero”) became the holder of the note and subsequently assigned it Rocky Road Capital Inc. |
COMMITMENTS_AND_CONTRACTUAL_OB
COMMITMENTS AND CONTRACTUAL OBLIGATIONS | 9 Months Ended |
Sep. 30, 2014 | |
Commitments And Contractual Obligations | ' |
6 - COMMITMENTS AND CONTRACTUAL OBLIGATIONS | ' |
Birch First Capital Fund, LLC | |
On August 16, 2013 Birch First Capital Fund, LLC (“Birch First”) filed a complaint against the Company in the 15th judicial circuit of Florida (2013 CA 012838) alleging that the Company owes them $168,661. The original balance of the line of credit agreement between Birch First and the Company was for $151,000. The Company filed a response and counterclaim. On November 18, 2013 the Company became aware of litigation by Birch First and Birch First Capital Management, LLC against Mr. Charles Cronin and Dr. Earl Beaver, naming the Company as a nominal defendant. A motion to dismiss was filed by the Company concerning this derivative lawsuit. As of September 30, 2014, the Company has entered into settlement negotiations with Birch First and hopes to resolve this matter by settlement, although there is no guarantee the Company will be able to settle this matter or if the settlement will be on terms deemed favorable to the Company. The disputed liability amount, including accrued interest, as of September 30, 2014 is $195,806. The litigation is pending as the parties reach a settlement agreement. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | |
Sep. 30, 2014 | ||
Summary Of Significant Accounting Policies Policies | ' | |
Basis Of Presentation | ' | |
The condensed consolidated financial statements have been prepared in accordance with Generally Accepted Accounting Principles (‘GAAP’) and include the accounts of the Company and its subsidiaries, Dynamic Energy Development Corporation and Transformation Consulting, Inc. All intercompany balances and transactions have been eliminated. | ||
Use of Estimates | ' | |
Preparation of the Company's financial statements in conformity with United States GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as well as the reported amounts of revenues and expenses. Accordingly, actual results could differ from those estimates. | ||
Reclassifications | ' | |
Certain reclassifications have been made in Statement of Operations during the quarter ended June 30, 2014. These reclassifications impacted the classification of certain items within the Statement ofOperations: relating to classification of consulting expenses and project development costs. The reclassifications had no impact on previously reported total operating expenses, net loss, or stockholders' equity. | ||
Valuation of Intangible Assets and Note Payable to Related Party | ' | |
The Company’s intangible asset value and note balance to a related party were reduced to the appropriate carrying value of $589,041as of June 30, 2014. The change was done in accordance with GAAP, ASC 805-50-30 which relates to the carrying value of assets and liabilities at the date of transfer by related parties. | ||
Development Costs | ' | |
Development costs are expensed in the period they are incurred unless they meet specific criteria related to technical, market and financial feasibility, as determined by management, including but not limited to the establishment of a clearly defined future market for the product, and the availability of adequate resources to complete the project. If all criteria are met, the costs are deferred and amortized over the expected useful life, or written off if a product is abandoned. For the period ended September 30, 2014 and 2013, total development costs amounted to $29,000 and $0, respectively. At September 30, 2014 and December 31, 2013, the Company had no deferred product development costs. | ||
Income Taxes | ' | |
Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted the accounting standards codified in ASC 740, Income Taxes as of its inception. Pursuant to those standards, the Company is required to compute tax asset benefits for net operating losses carried forward. Potential benefit of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not that it will utilize the net operating losses carried forward in future years. | ||
ASC 740-10-25 prescribes recognition thresholds that must be met before a tax position is recognized in the financial statements and provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. An entity may only recognize or continue to recognize tax positions that meet a "more likely than not" threshold. Based on its evaluation, the Company has concluded that there are no significant uncertain tax positions requiring recognition in its financial statements. | ||
The Company does not have any unrecognized tax benefits as of September 30, 2014 and December 31, 2013 that, if recognized, would affect the Company's effective income tax rate. The Company's policy is to recognize interest and penalties related to income tax issues as components of income tax expense. The Company did not recognize or have any accrual for interest and penalties relating to income taxes as of September 30, 2014 and December 31, 2013. | ||
Cash and Cash Equivalents | ' | |
Cash and cash equivalents, if any, include all highly liquid instruments with an original maturity of three months or less at the date of purchase. At the period ended September 30, 2014, the Company had no cash equivalents. | ||
Fair Value of Financial Instruments | ' | |
The Company accounts for the fair value of financial instruments in accordance with the FASB ASC Topic 820, Fair Value Measurements and Disclosures ("Topic 820"). Topic 820 defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. | ||
The three levels are defined as follows: | ||
Level 1 | Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. | |
Level 2 | Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. | |
Level 3 | inpuInputs to the valuation methodology are unobservable and significant to the fair measurement. | |
The fair value of the Company's cash and cash equivalents, accrued liabilities and accounts payable approximate carrying value because of the short-term nature of these items. | ||
Revenue Recognition | ' | |
The Company recognizes revenue in accordance with the FASB ASC Section 605-10-S99, Revenue Recognition, Overall, SEC Materials ("Section 605-10-S99"). Section 605-10-S99 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services rendered; (3) the fee is fixed and determinable; and (4) collectability is reasonably assured. | ||
Net Income (Loss) Per Common Share | ' | |
Basic income (loss) per common share (“EPS”) is calculated by dividing the income (loss) available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The Company currently has no dilutive securities and as such, basic and diluted income (loss) per share is the same for all periods presented. | ||
Share Purchase Warrants | ' | |
The Company accounts for common share purchase warrants at fair value in accordance with ASC 815, Derivatives and Hedging. The Black-Scholes option pricing valuation method is used to determine fair value of these warrants. Use of this method requires that the Company make assumptions regarding stock volatility, dividend yields, expected term of the warrants and risk-free interest rates. | ||
Recently Issued Accounting Pronouncements | ' | |
Recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC during the current reporting period did not, or are not, believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
CAPITAL_STOCK_Tables
CAPITAL STOCK (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Capital Stock Tables | ' | ||||||||
Summary of contingent consideration | ' | ||||||||
(Unaudited) | (Audited) | ||||||||
As of | As of | ||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Contingent Consideration Due | $ | 2,000,000 | $ | 2,000,000 | |||||
Less payments | (984,638 | ) | (984,638 | ) | |||||
Payment of exercise of warrants | (108,788 | ) | (108,788 | ) | |||||
Conversion of contingent consideration to common stock | (340,362 | ) | - | ||||||
$ | 566,212 | $ | 906,574 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Summary Of Significant Accounting Policies Details Narrative | ' | ' |
Development Costs | $29,000 | $0 |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details Narrative) (USD $) | Sep. 30, 2014 |
Accrued interest | $195,806 |
Myers - LOC | ' |
Amounts due to a related party | 136,599 |
Unsecured and bear interest rate | 12.00% |
Accrued interest | 14,392 |
Frye | ' |
Amounts due to a related party | 13,325 |
Unsecured and bear interest rate | 12.00% |
Accrued interest | 718 |
Classified Ride | ' |
Amounts due to a related party | 587,487 |
Accrued interest | $32,355 |
CAPITAL_STOCK_Details
CAPITAL STOCK (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Capital Stock Details | ' | ' |
Contingency consideration due | $2,000,000 | $2,000,000 |
Less payments | -984,638 | -984,638 |
Payment of exercise of warrants | -108,788 | -108,788 |
Conversion of contingent consideration to common stock | -340,362 | ' |
Total | $566,212 | $906,574 |
CAPITAL_STOCK_Details_Narrativ
CAPITAL STOCK (Details Narrative) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | |
Capital Stock Details Narrative | ' | ' |
Common stock issued | 18,429,108 | 150,488 |
Common stock outstanding | 18,429,108 | 150,488 |
Common stock issued | 18,278,620 | ' |
Accrued interest | $6,609 | ' |
COMMITMENTS_AND_CONTRACTUAL_OB1
COMMITMENTS AND CONTRACTUAL OBLIGATIONS (Details Narrative) (USD $) | Sep. 30, 2014 |
Commitments And Contractual Obligations Details Narrative | ' |
Accrued interest | $195,806 |