DOCUMENT_AND_ENTITY_INFORMATIO
DOCUMENT AND ENTITY INFORMATION | 3 Months Ended | |
Mar. 31, 2014 | 15-May-14 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'BRAVO ENTERPRISES LTD. | ' |
Entity Central Index Key | '0000746631 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Mar-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 | ' | 71,076,030 |
Document Fiscal Period Focus | 'Q1 | ' |
Document Fiscal Year Focus | '2014 | ' |
CONDENSED_BALANCE_SHEETS
CONDENSED BALANCE SHEETS (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
CURRENT ASSETS | ' | ' |
Cash | $15,280 | $14,206 |
Prepaid expenses | 4,200 | 23,400 |
Inventory | 13,111 | ' |
TOTAL CURRENT ASSETS | 32,591 | 37,606 |
AVAILABLE FOR SALE SECURITIES - related parties | 69,474 | 36,795 |
INTANGIBLE ASSETS - net of impairment of $224,247 and amortization of of $93,296 (2013) | ' | 234,613 |
TOTAL OTHER ASSETS | 69,474 | 271,408 |
TOTAL ASSETS | 102,065 | 309,014 |
CURRENT LIABILITIES | ' | ' |
Accounts payable and accrued liabilities | 484,687 | 498,935 |
Due to related parties | 131,176 | 56,129 |
TOTAL CURRENT LIABILITIES | 615,863 | 555,064 |
COMMITMENTS AND CONTINGENCIES | 45,533 | 45,533 |
STOCKHOLDERS' EQUITY | ' | ' |
Convertible preferred stock: - Class A voting stock, $0.001 par value, 5,000,000 shares authorized | ' | ' |
Convertible preferred stock: - Class B voting stock, $0.001 par value, 5,000,000 shares authorized | ' | ' |
Common stock, $.001 par value, 500,000,000 shares authorized 65,076,030 (December 31, 2013 - 152,476,030) shares issued and outstanding | 65,076 | 152,476 |
Additional paid-in capital | 25,685,316 | 26,413,116 |
Deferred compensation | -352,000 | -26,932 |
Deficit accumulated during the development stage | -21,565,435 | -21,230,076 |
Deficit accumulated prior to the development stage | -4,460,633 | -4,460,633 |
Accumulated other comprehensive income | 68,345 | 35,666 |
TOTAL STOCKHOLDERS' EQUITY | -559,331 | -291,583 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $102,065 | $309,014 |
CONDENSED_BALANCE_SHEETS_Paren
CONDENSED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
CURRENT ASSETS | ' | ' |
Net of impairment and amortization | $224,247 | $93,296 |
STOCKHOLDERS' (DEFICIT) | ' | ' |
Convertible preferred stock: Class A voting stock, par value | $0.00 | $0.00 |
Convertible preferred stock: Class A voting stock, authorized | 5,000,000 | 5,000,000 |
Convertible preferred stock: Class B voting stock, par value | $0.00 | $0.00 |
Convertible preferred stock: Class B voting stock, authorized | 5,000,000 | 5,000,000 |
Common stock, par value | $0.00 | $0.00 |
Common stock, authorized | 500,000,000 | 500,000,000 |
Common stock, issued | 65,076,030 | 152,476,030 |
Common stock, outstanding | 65,076,030 | 152,476,030 |
CONDENSED_STATEMENTS_OF_OPERAT
CONDENSED STATEMENTS OF OPERATIONS (Unaudited) (USD $) | 3 Months Ended | 219 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | |
Condensed Statements Of Operations | ' | ' | ' |
Water Unit Sales - related party | $32,000 | ' | $67,773 |
Water Unit Sales - other | ' | 4,104 | 4,703 |
TOTAL REVENUES | 32,000 | 4,104 | 72,476 |
COST OF GOODS SOLD | 19,200 | 2,365 | 44,965 |
GROSS PROFIT | 12,800 | 1,739 | 27,511 |
GENERAL AND ADMINISTRATIVE EXPENSES | ' | ' | ' |
Litigation settlement | ' | ' | 2,291,070 |
Management and consulting fees | 66,977 | 116,718 | 5,292,343 |
Consulting fees - stock based compensation | ' | ' | 1,989,869 |
Exploration costs | ' | ' | 113,678 |
Loss on settlement of debt | ' | ' | 718,784 |
General and administrative | 35,522 | 32,830 | 3,081,140 |
Professional fees | 11,047 | 10,386 | 1,274,845 |
Amortization | 10,366 | 20,333 | 93,296 |
Interest expense | ' | ' | 143,815 |
Research and development costs | ' | ' | 285,231 |
Software development costs | ' | ' | 737,300 |
TOTAL GENERAL & ADMIN. EXPENSES | 123,912 | 180,267 | 16,021,371 |
OTHER (INCOME) EXPENSES | ' | ' | ' |
Interest, Royalty and Other Income | ' | ' | -82,138 |
(Gain)/loss on sale of securities - related party | ' | ' | -21,541 |
Property option income | ' | ' | -130,000 |
Write-down of securities - Legacy Platinum Group | ' | ' | 258,580 |
Write-down of securities - Golden Star Enterprises | ' | ' | 15,768 |
Write-down of interest in ACGT Corporation | ' | ' | 1,406,000 |
Write-down of interest in oil and gas properties | ' | ' | 3,815,659 |
Write-down of exclusive license agreement | 224,247 | ' | 224,247 |
Loss on Iceberg Drive Inn investment | ' | ' | 85,000 |
TOTAL OTHER (INCOME) EXPENSES | 224,247 | ' | 5,571,575 |
Loss before income taxes | -335,359 | -178,528 | -21,565,435 |
Income tax provision | ' | ' | ' |
NET LOSS | ($335,359) | ($178,528) | ($21,565,435) |
BASIC NET LOSS PER SHARE | ($0.01) | $0 | ' |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | 108,342,697 | 147,335,613 | ' |
CONDENSED_STATEMENTS_OF_CASH_F
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 3 Months Ended | 219 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ' | ' | ' |
Net loss for the period | ($335,359) | ($178,528) | ($21,565,435) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' | ' |
- amortization | 10,366 | ' | 93,296 |
- fees and services paid for with common shares | 34,932 | 16,182 | 3,672,678 |
- non cash research and development | ' | ' | 105,000 |
- other stock based compensation | ' | ' | 1,989,468 |
- interest paid for with common shares | ' | ' | 80,872 |
- loss on settlement of debt | ' | ' | 718,784 |
- software development costs paid for with common shares | ' | ' | 600,000 |
- non cash exploration costs | ' | ' | 110,000 |
- write-down of interest in oil and gas properties | ' | ' | 2,970,722 |
- write-down of equities in Legacy Platinum Group Inc. | ' | ' | 258,580 |
- write-down of equities in Golden Star Enterprises Ltd. | ' | ' | 15,768 |
- write-down of interest in ACGT Corporation | ' | ' | 2,250,937 |
- Write-down of exclusive license agreement | 224,247 | ' | 224,247 |
- loss on Iceberg Drive Inn investment | ' | ' | 85,000 |
- (Gain)/loss on sale of securities held for resale - related parties | ' | ' | -21,816 |
- non cash option income received in shares | ' | ' | -130,000 |
- interest accrued on promissory notes receivable | ' | ' | -63,136 |
- other non-cash expenses | ' | ' | 2,557,382 |
- net changes in working capital items | 4,952 | -7,958 | 247,318 |
- inventory | -13,111 | ' | -13,111 |
CASH FLOWS USED IN OPERATING ACTIVITIES | -73,973 | -169,934 | -5,813,446 |
CASH FLOWS FROM INVESTING ACTIVITIES | ' | ' | ' |
Interest received on promissory notes receivable | ' | ' | 63,136 |
Investment in Iceberg Acquisition Corporation | ' | ' | -120,000 |
Proceeds from sale of securities - related party | ' | ' | 136,790 |
Interest in oil and gas properties, net of finders fees | ' | ' | -1,522,804 |
CASH FLOWS USED IN INVESTING ACTIVITIES | ' | ' | -1,442,878 |
CASH FLOWS FROM FINANCING ACTIVITIES | ' | ' | ' |
Net proceeds on sale of common stock | ' | 80,000 | 5,391,025 |
Net advances (to) from related parties | 75,047 | 8,904 | 1,460,579 |
Advances receivable | ' | ' | 420,000 |
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES | 75,047 | 88,904 | 7,271,604 |
NET INCREASE (DECREASE) IN CASH | 1,074 | -81,030 | 15,280 |
CASH, BEGINNING OF PERIOD | 14,206 | 86,781 | ' |
CASH, END OF PERIOD | $15,280 | $5,751 | $15,280 |
CONDENSED_STATEMENTS_OF_OTHER_
CONDENSED STATEMENTS OF OTHER COMPREHENSIVE (LOSS) (Unaudited) (USD $) | 3 Months Ended | 219 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | |
Condensed Statements Of Other Comprehensive Loss | ' | ' | ' |
NET LOSS | ($335,359) | ($178,528) | ($21,565,435) |
Unrealized gains (losses) on related party securities | 32,679 | 41,303 | 68,345 |
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), net of tax | 32,679 | 41,303 | 68,345 |
COMPREHENSIVE INCOME (LOSS) | ($302,680) | ($137,225) | ($21,497,090) |
NATURE_OF_OPERATIONS
NATURE OF OPERATIONS | 3 Months Ended |
Mar. 31, 2014 | |
Notes to Financial Statements | ' |
NOTE 1 - NATURE OF OPERATIONS | ' |
The Company was incorporated as Venture Investments Inc. under the Laws of the State of Nevada on November 29, 1983. The Company underwent a name change to Asdar Group on December 10, 1987, a name change to Precise Life Sciences Ltd. on April 30, 2002, a name change to Iceberg Brands Corporation on February 18, 2003, a name change to Avalon Gold Corporation on August 28, 2003, a name change to Avalon Energy Corporation on March 22, 2005, a name change to Shotgun Energy Corporation on September 25,2007 and a name change to Organa Gardens International Inc. on February 26, 2009 and a name change to Bravo Enterprises Ltd. on June 1, 2012. The Company was dormant from1991 to 1996 and currently has no revenue generating operations. The Company was considered a development stage company since January 1, 1996 and as a result of changing its business focus to air to water harvesting units is considered to be a development stage company. Expected operations will consist of manufacturing and distributing air to water harvesting units worldwide. | |
GOING CONCERN | |
The financial statements have been prepared on the basis of a going concern which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has generated revenues of $72,476 to date and has incurred losses of $26,026,068 since inception. The Company will depend on sales generated from the air to water harvester units, shareholder loans and on outside capital through the issuance of common shares to finance ongoing operating losses and to fund the manufacture and distribution of the air to water harvesting units. The ability of the Company to continue as a going concern is dependent on raising additional capital and ultimately on generating future profitable operations. There can be no assurance that the Company will be able to raise the necessary funds when needed to finance its ongoing costs. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The accompanying financial statements do not include any adjustments relative to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of this uncertainty. |
BASIS_OF_PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||
NOTE 2 - BASIS OF PRESENTATION | ' | ||||||||||||||||
The unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Regulation S-X Article 8 “Financial Statements of Smaller Reporting Companies” as promulgated by the Securities and Exchange Commission ("SEC"). Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles for complete financial statements. These unaudited interim financial statements should be read in conjunction with the audited financial statements for the period ended December 31, 2012 indexed in Form 10-K. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented. | |||||||||||||||||
The preparation of financial statements in accordance with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company's financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions that could have a material effect on the reported amounts of the Company's financial position and results of operations. Operating results for the three month period ended March 31, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. | |||||||||||||||||
Concentration of Credit Risk | |||||||||||||||||
Cash in bank accounts is at risk to the extent that it exceeds U.S.Federal Deposit Insurance Corporation and Canadian Deposit Insurance Corporation insured amounts. To minimize risk, the Company places its cash with high credit quality institutions. All cash is deposited in one prominent Canadian financial institution. | |||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||
The Company’s financial instruments include cash, receivables, prepaid expenses, available-for-sale securities and due to related parties. Management believes the fair values of these financial instruments approximate their carrying values due to their short-term nature. The Company adopted ASC Topic 820-10 for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). Topic 820-10 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements Topic 820-10 defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of nonperformance risk including our own credit risk. In addition to defining fair value, Topic 820-10 expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are: | |||||||||||||||||
* Level 1 – inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. | |||||||||||||||||
* Level 2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |||||||||||||||||
* Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. | |||||||||||||||||
In general, and where applicable, we use quoted prices in an active market for identical derivative assets and liabilities that are traded on exchanges. These derivative assets and liabilities are included in Level 1.The application of the three levels of the fair value hierarchy under Topic 820-10-35 to our assets and liabilities are described below: | |||||||||||||||||
Fair Value Measurements | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total Fair Value | ||||||||||||||
Assets | |||||||||||||||||
Cash | $ | 15,280 | $ | - | $ | - | $ | 15,280 | |||||||||
Prepaid Expenses | 4,200 | 4,200 | |||||||||||||||
Inventory | 13,111 | - | - | 13,111 | |||||||||||||
Total | $ | 32,591 | $ | - | $ | - | $ | 32,591 | |||||||||
Liabilities | |||||||||||||||||
Current and related party | $ | 615,864 | $ | - | $ | - | $ | 615,864 | |||||||||
Total | $ | 615,864 | $ | - | $ | - | $ | 615,864 | |||||||||
Foreign Currency Translation | |||||||||||||||||
The financial statements are presented in United States dollars. In accordance with ASC Topic 830 “Foreign Currency Matters”, foreign denominated monetary assets and liabilities are translated to their United States dollar equivalents using foreign exchange rates that prevailed at the balance sheet date. Non-monetary assets and liabilities are translated at exchange rates prevailing at the transaction date. Revenue and expenses are translated at average rates of exchange during the year. Related translation adjustments are reported as a separate component of stockholders’ equity, whereas gains or losses resulting from foreign currency transactions are included in results of operations. | |||||||||||||||||
Available For Sale Securities – related parties | |||||||||||||||||
The Company holds marketable equity securities which are available-for-sale and as such, their carrying value is adjusted to market at the end of each reporting period. As required by ASC Topic 220 (formerly SFAS 130),, unrealized gains and losses on these investments are recorded as a component of accumulated other comprehensive income (loss) and are recorded as a component of net income (loss) when realized. However, if there is a permanent decline in the market value of available-for-sale securities, this permanent market value adjustment is taken into income in the period. | |||||||||||||||||
Stock-Based Compensation | |||||||||||||||||
On January 1, 2006, the Company adopted the fair value recognition provisions of ASC Topic 718 & 505. Prior to January 1, 2006, the Company accounted for share-based payments under the recognition and measurement provisions of ASC Topic 718. In accordance with ASC Topic 718 no compensation cost was required to be recognized for options granted that had an exercise price equal to the market value of the underlying common stock on the date of grant. . The Company uses the Black-Scholes pricing model to calculate the fair value of options and warrants issued to both employees and non-employees. Stock issued for compensation is valued using the market price of the stock on the date of the related agreement. In addition, deferred stock compensation related to non-vested options is required to be eliminated against additional paid-in capital. The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with ASC Topic 718 & 505. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. | |||||||||||||||||
Intangible Assets | |||||||||||||||||
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350 , “Intangibles-Goodwill and Other” requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead tested for impairment at least annually in accordance with the provisions of ASC 350. This standard also requires that intangible assets with definite useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment. The Company's intangible assets consist of the acquisition of the license to import and distribute wine & liquor products and various brands and labels. The Company determined that the intangibles have an estimated useful life of 18 years and will be reviewed annually for impairment. Amortization will be recorded over the estimated useful life of the assets using the straight-line method for financial statement purposes. The Company will commence amortization when the economic benefits of the assets begin to be consumed in January, 2013. Other intangibles are carried at acquisition cost less accumulated amortization. Amortization is provided over the estimated useful lives of the assets on straight line basis per annum. | |||||||||||||||||
Definite life intangible assets are tested for recoverability whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. These tests involve the use of estimates and assumptions appropriate in the circumstances. In assessing fair value, valuation models are used that include discounted cash flows. The models use assumptions that include levels of growth in assets under management from net sales and market, pricing and margin changes, synergies achieved on acquisition, discount rates, and observable data for comparable transactions. In February 2014, the Company’s intangible assets were terminated by mutual agreement and the exclusive license agreement was written down to $Nil. | |||||||||||||||||
Income Taxes | |||||||||||||||||
The Company follows the liability method of accounting for income taxes as set forth in ASC Topic 740-10. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax balances. Deferred tax assets and liabilities are measured using enacted or substantially enacted tax rates expected to apply to the taxable income in the years in which those differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment. A valuation allowance is provided for deferred tax assets if it is more likely than not that the Company will not realize the future benefit, or if the future deductibility is uncertain. In accordance with ASC 740-10. This interpretation introduces a new approach that changes how enterprises recognize and measure tax benefits associated with tax positions and how enterprises disclose uncertainties related to income tax positions in their financial statements. | |||||||||||||||||
Inventory | |||||||||||||||||
Inventories consist of merchandise held for sale in the ordinary course of business, including cost of freight and other miscellaneous acquisition costs, and are stated at the lower of cost, or market determined on the first-in-first-out basis. The Company records a write-down for inventories, which have become obsolete or are in excess of anticipated demand or net realizable value. The Company performs a detailed review of inventory each period that considers multiple factors including demand forecasts, market conditions, product life cycle status, product development plans and current sales levels. If future demand or market conditions for the Companys products are less favorable than forecasted or if unforeseen changes negatively affect the utility of the Companys inventory, it may be required to record additional write-downs, which would negatively affect gross margins in the period when the write-downs are recorded. If actual market conditions are more favorable, the Company may have higher gross margins when products incorporating inventory that were previously written down are sold. | |||||||||||||||||
Revenue Recognition | |||||||||||||||||
Sales are recognized upon purchase by customers at our product facility. All sales at our product facility are final, allowing for no sales returns. As at March 31, 2014, $Nil (2012 - $Nil) is in accounts receivable from the sale of water units. | |||||||||||||||||
Recent Accounting Pronouncements | |||||||||||||||||
There have been no recent accounting pronouncements not yet adopted by the Company which would have a material impact on our financial statements. |
AVAILABLEFORSALE_SECURITIES_RE
AVAILABLE-FOR-SALE SECURITIES - RELATED PARTIES | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Notes to Financial Statements | ' | ||||||||
NOTE 3 - AVAILABLE-FOR-SALE SECURITIES - RELATED PARTIES | ' | ||||||||
Golden Star Enterprises Ltd. | |||||||||
During 2004, the Company received 111,111 restricted Rule 144 shares of Golden Star Corporation (“Golden Star”), a public company with directors and significant shareholders in common. The restricted shares were received as non-refundable consideration pursuant to agreements with Golden Star dated November 10, 2004 and December 10, 2004 to acquire certain mineral property interests from the Company. These agreements were subsequently terminated. | |||||||||
Effective December 31, 2004 the Company recorded, as other comprehensive loss for the year, a $10,000 unrealized loss in the carrying value of its shares of Golden Star. During the years ended December 31, 2005 and 2006 the Company recorded additional unrealized losses in the carrying value of its shares of Golden Star totalling $90,000 and $8,889 respectively, which were recorded as other comprehensive loss for those years. During the year ended December 31, 2007, the Company sold 2,500 shares resulting in a realized gain of $165 and recorded an additional unrealized loss of $473 in 2007. During the year ended December 31, 2008, the Company sold 10,000 shares resulting in a realized loss of $800 and recorded an additional unrealized loss of $15,026 to December 31, 2008. As a result, the carrying value of the available for sale shares of Golden Star is $2,712 as at December 31, 2008. | |||||||||
During the year ended December 31, 2009, the Company recorded an unrealized gain of $1,232. As a result, the carrying value of the available for sale shares of Golden Star is $3,945 as at December 31, 2009. | |||||||||
During the year ended December 31, 2010, the Company sold Nil Golden Star shares and recorded an unrealized gain of $11,774. As a result, the carrying value of the available for sale shares of Golden Star is $2,860 as at December 31, 2010. Effective December 31, 2010, the Company recorded a $12,859 write-down of its investment in Golden due to an other-than-temporary decline in the value of the shares. | |||||||||
During the year ended December 31, 2011, the Company sold Nil Golden Star shares and recorded an unrealized loss of $2,623. As a result, the carrying value of the available for sale shares of Golden Star is $237 as at December 31, 2011. Effective December 31, 2011, the Company recorded a $2,909 write-down of its investment in Golden due to an other-than-temporary decline in the value of the shares. | |||||||||
During the year ended December 31, 2012, the Company sold Nil Golden Star shares and recorded an unrealized loss of $148. As a result, the carrying value of the available for sale shares of Golden Star is $89 as at December 31, 2012. | |||||||||
During the year ended December 31, 2013, the Company sold Nil Golden Star shares and recorded an unrealized loss of $57. As a result, the carrying value of the available for sale shares of Golden Star is $32 as at December 31, 2013. In July of 2013, the Golden Star shares held were subject to a 1:40 reverse split. | |||||||||
During the three month period ended March 31, 2014, the Company sold Nil Golden Star shares and recorded an additional unrealized gain of $Nil to March 31, 2014. As a result, the carrying value of the available for sale shares of Golden Star is $32 as at March 31, 2014. | |||||||||
Legacy Platinum Group Inc. | |||||||||
During 2003 the Company settled an outstanding debt receivable of $122,988 from Legacy Platinum Group Inc.. (“Legacy”) for the issue of 1,229,880 restricted shares of Legacy representing a then 9.8% interest in Legacy. During 2004, the Company wrote this investment down to $1 because management determined that it was not recoverable within a reasonable period of time. | |||||||||
Effective December 31, 2007, the Company recorded, as other comprehensive income for the year, a $604,440 unrealized gain in the carrying value of its shares of Legacy. | |||||||||
During the year ended December 31, 2008, the Company sold 150,000 Legacy shares resulting in a realized gain of $26,100 and recorded an additional unrealized gain of $270,562 to December 31, 2008. As a result, the carrying value of the available for sale shares of Legacy was $885,502 as at December 31, 2008. | |||||||||
During the year ended December 31, 2009, the Company sold 30,985 Legacy shares resulting in a realized loss of $2,987 (net of commissions of $595) and recorded an additional unrealized loss of $797,161 to December 31, 2009. As a result, the carrying value of the available for sale shares of Legacy is $ 62,934 as at December 31, 2009. | |||||||||
During the year ended December 31, 2010, the Company the Company received 2,627,440 restricted shares of Legacy valued to $131,372 pursuant to a debt settlement and sold Nil Legacy shares. The Company recorded an unrealized gain in the carrying value of its available-for-sale securities totaling $35,021, which was recorded as other comprehensive income (loss). As a result, the carrying value of the available for sale shares of Legacy is $58,822 as at December 31, 2010. Effective December 31, 2010, the Company recorded a $78,823 write-down of its investment in Legacy due to an other-than-temporary decline in the value of the shares. | |||||||||
During the year ended December 31, 2011, the Company sold Nil Legacy shares and recorded an unrealized loss of $52,939. As a result, the carrying value of the available for sale shares of Legacy is $5,882 as at December 31, 2011. Effective December 31, 2011, the Company recorded a $51,469 write-down of its investment in Legacy due to an other-than-temporary decline in the value of the shares. | |||||||||
During the year ended December 31, 2012, the Company sold Nil Legacy shares and recorded an unrealized loss of $2,941. As a result, the carrying value of the available for sale shares of Legacy is $2,941 as at December 31, 2012. | |||||||||
During the year ended December 31, 2013, the Company sold Nil Legacy shares and recorded an unrealized gain of $33,822. As a result, the carrying value of the available for sale shares of Legacy is $36,763 as at December 31, 2013. In November of 2013, the Legacy shares held were subject to a 1:9 reverse split. | |||||||||
During the three month period ended March 31, 2014, the Company sold Nil Legacy shares and recorded an additional unrealized gain of $32,679 to March 31, 2014. As a result, the carrying value of the available for sale shares of Legacy is $69,351 as at March 31, 2014. | |||||||||
Available for sale securities – related parties include the following: | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
408,402 (2012-408,402) shares of Legacy Platinum Group Inc. | $ | 69,442 | $ | 36,763 | |||||
2,465 (2012- 2,465) shares of Golden Star Enterprises Ltd. | 32 | 32 | |||||||
$ | 69,474 | $ | 36,795 |
INTANGIBLE_ASSETS
INTANGIBLE ASSETS | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Notes to Financial Statements | ' | ||||||||
NOTE 4 - INTANGIBLE ASSETS | ' | ||||||||
On November 23, 2012, the Company signed an Exclusive Licensing Agreement with Water-For-The-World-Manufacturing Inc. of Wellpinit, Washington with respect to its commercial atmospheric water harvester system. | |||||||||
Water-For-The-World-Manufacturing Inc. is a leader in the design, manufacture and distribution of water from air systems known as Air-to-Water Harvesters that extracts moisture from the air through a dehumidification process then filters and purifies the water for consumption. The company has developed a unique air drive system that will enable the machine not only to be powered through a conventional power source but also in emergency situations the machine can be powered directly from an engine using its patented drive system. The atmospheric water harvester can produce up to 3000 gallons of drinking water under optimum conditions. | |||||||||
Water-For-The-World-Manufacturing Inc. has appointed Bravo Enterprises Ltd. as its exclusive worldwide manufacturing and sales representative for the consideration of 120,000,000 restricted common shares of Bravo Enterprises Ltd. The company has proven concept and developed a production model exclusively for the generation of water for human consumption. | |||||||||
A portion of the 120,000,000 restricted common share consideration is being received by certain shareholders that also owned shares in Bravo Enterprises Ltd. prior to the November 23, 2012 agreement. The value of these shares considered a related party portion is $67,257 and as such, this amount has been eliminated from the transaction. | |||||||||
Intangible assets include the following: | |||||||||
March 31, | December 31, | ||||||||
Description | 2014 | 2013 | |||||||
18 year general license to manufacture and distribute water units | $ | 1,560,000 | $ | 1,560,000 | |||||
Less: related party portion of consideration for license | (67,257 | ) | (67,257 | ) | |||||
Less: accumulated amortization | (93,296 | ) | (82,930 | ) | |||||
Balance | $ | 1,399,447 | $ | 1,409,813 | |||||
Less: value of shares cancelled and returned to treasury | (1,175,200 | ) | (1,175,200 | ) | |||||
Less: write-down of exclusive license | (224,247 | ) | - | ||||||
Balance | $ | Nil | $ | 1,472,010 | |||||
In February, 2014, the Company and Water For The World Manufacturing Inc. formally terminated the exclusive licensing agreement dated November 23, 2012 with certain provisions. Specifically, in consideration for the goodwill generated during the period of the exclusive license agreement between Water For The World Manufacturing Inc. and Bravo Enterprises Ltd., certain private transactions involving the beneficial owners of some of the 120,000,000 restricted common shares issued will be honored. These private transactions transpired prior to the cancellation of the above mentioned exclusive license agreement. As such 90,400,000 restricted common shares valued at $1,175,200 were cancelled and returned to treasury and the license was written down to $Nil. | |||||||||
Related Agreement: | |||||||||
On August 12, 2013, the Company signed a marketing and sales agreement with Splash Water Solutions Canada Ltd., a privately owned Company based in British Columbia, Canada. The agreement calls for Splash Canada to set up at least one showroom store to market Bravo’s Atmospheric Water Harvesting Machines, the AIRMAX 3000 and the AIRWELL 3000. Under the terms of the agreement, Splash Canada must meet minimum purchase order requirements from Bravo of the AIRMAX 3000 and AIRWELL 3000 and branded accessories in order to maintain its exclusive marketing rights for Canada annually and non-exclusive rights for the rest of the world. | |||||||||
DEFERRED_COMPENSATION
DEFERRED COMPENSATION | 3 Months Ended |
Mar. 31, 2014 | |
Notes to Financial Statements | ' |
NOTE 5 - DEFERRED COMPENSATION | ' |
On July 16, 2012 the Company entered into an agreement with Palisades Financial Ltd. (“Palisades”), a private company controlled by a significant shareholder, with a two year term, whereby Palisades provides investor relations services to the Company (valued at $27,625) in exchange for 1,250,000 restricted shares of the Company’s common stock. | |
On July 16, 2012, the Company entered into an agreement with 1063244 Alberta Ltd. (“1063244”), a private company controlled by a significant shareholder, with a two-year term, whereby 1063244 provides investment-banking services to the Company (valued at $33,150) in exchange for 1,500,000 restricted shares of the Company’s common stock. | |
On July 16, 2012, the Company entered into agreements with two consultants, for a two year term, whereby the consultants provide consulting services to the Company (valued at $38,675) in exchange for 1,750,000 shares of the Company’s common stock. | |
On February 15, 2014, the Company entered into a consulting agreement with Charlton Investments Ltd. (“Charlton”), a private company controlled by a significant shareholder, with a two-year term, whereby Charlton provides consulting services to the Company regarding its new line of air to water harvesting units (valued at $180,000) in exchange for 1,500,000 restricted shares of the Company’s common stock. | |
On February 15, 2014, the Company entered into a consulting agreement with Compte De Sierge Accomodative Corp. Limited (“Compte”), a private Hong Kong corporation, with a two-year term, whereby Compte provides consulting services to the Company regarding its new line of air to water harvesting units (valued at $180,000) in exchange for 1,500,000 restricted shares of the Company’s common stock. | |
The Company amortizes the costs of these services over the respective terms of the contracts. During the three months ended March 31, 2014 and 2013, the Company recorded amortization of deferred compensation totaling $34,932 and $16,182 respectively. As of March 31, 2014 the unamortized portion of the deferred compensation totaled $352,000 (December 31, 2013 - $26,932). |
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Notes to Financial Statements | ' | ||||||||||||
NOTE 6 - STOCKHOLDERS' EQUITY | ' | ||||||||||||
(1) 2014 Stock Transactions- During the three months ended March 31, 2014 the Company: | |||||||||||||
(a) cancelled 90,400,000 restricted common shares valued at $1,175,200 pursuant to the termination of the exclusive licensing agreement dated November 23, 2012. | |||||||||||||
(b) issued 3,000,000 restricted common shares valued at $360,000 to two shareholders pursuant to deferred compensation agreements dated February 15, 2014. | |||||||||||||
(2) 2013 Stock Transactions- During the three months ended March 31, 2013 the Company: | |||||||||||||
(a) issued 80,000 restricted common shares valued at $8,000 to a consultant for her services earned in 2012. | |||||||||||||
(b) issued 800,000 restricted common shares for cash in the amount of $80,000 pursuant to a private placement subscription agreements. | |||||||||||||
(c) issued 62,500 restricted common shares for cash received in 2012 in the amount of $5,000 pursuant to a private placement subscription agreement. | |||||||||||||
(3) 2014 Stock Options | |||||||||||||
The Company’s stock option activity is as follows: | |||||||||||||
Weighted Average Remaining Contractual Life | |||||||||||||
(in years) | |||||||||||||
Number of options | Weighted Average Exercise Price | ||||||||||||
Balance, December 31, 2012 | 7,000,000 | 0.013 | 5 | ||||||||||
Granted during the period | - | - | - | ||||||||||
Exercised during the period | - | - | - | ||||||||||
Balance, December 31, 2013 | 7,000,000 | 0.013 | 5 | ||||||||||
Granted during the period | - | - | - | ||||||||||
Exercised during the period | - | - | - | ||||||||||
Balance March 31,2014 | 7,000,000 | 0.013 | 5 | ||||||||||
(4) 2013 Stock Options | |||||||||||||
The Company’s stock option activity is as follows: | |||||||||||||
Weighted Average Remaining Contractual Life | |||||||||||||
(in years) | |||||||||||||
Weighted Average Exercise Price | |||||||||||||
Number of options | |||||||||||||
Balance, December 31, 2011 | - | - | - | ||||||||||
Granted during 2012 | 26,000,000 | 0.013 | 5 | ||||||||||
Exercised during 2012 | (19,000,000 | ) | 0.013 | ||||||||||
Balance, December 31, 2012 | 7,000,000 | 0.013 | 5 | ||||||||||
Granted during the period | - | - | - | ||||||||||
Exercised during the period | - | - | - | ||||||||||
Balance March 31,2013 | 7,000,000 | 0.013 | 5 | ||||||||||
On December 7, 2012 the Company filed Registration Statements on Form S-8 to register 26,000,000 to be issue pursuant to the Company’s 2012 Stock. Incentive and Option Plan. All 26,000,000 shares have been granted and 19,000,000 have been exercised under the December 2012 Stock Option Plan. In 2012, the Company recognized stock-based compensation of $70,000 in accordance with SFAS 123R which represented the fair value of stock options granted to consultants in exchange for services rendered to the Company. |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Notes to Financial Statements | ' | ||||||||
NOTE 7- RELATED PARTY TRANSACTIONS | ' | ||||||||
During the three months ended March 31, 2014, the Company incurred $3,600 (2013 -$5,000) in fees to directors. | |||||||||
During the three months ended March 31, 2014, the Company incurred $22,750 (2013 -$97,750) in consulting and management fees to shareholders or companies controlled by shareholders. | |||||||||
During the three months ended March 31, 2014, the Company incurred $7,828 (2013 - $8,688) in rent and office expenses to a private company controlled by a shareholder. | |||||||||
During the three months ended March 31, 2014, companies controlled by significant shareholders earned $18,846 (2013 - $7,596) pursuant to the expired portion of deferred compensation agreements (see Note 5). | |||||||||
The following amounts are due to related parties at: | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Significant shareholders | $ | 131,177 | $ | 56,129 |
SUPPLEMENTAL_CASH_FLOW_INFORMA
SUPPLEMENTAL CASH FLOW INFORMATION | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Notes to Financial Statements | ' | ||||||||
NOTE 8 - SUPPLEMENTAL CASH FLOW INFORMATION | ' | ||||||||
Three months | |||||||||
ended March 31, | |||||||||
2014 | 2013 | ||||||||
Cash paid during the period for: | |||||||||
Interest | $ | - | $ | - | |||||
Income taxes | $ | - | $ | - | |||||
During the three months ended March 31, 2014 the Company: | |||||||||
(a) cancelled 90,400,000 restricted common shares valued at $1,175,200 pursuant to the termination of the exclusive licensing agreement dated November 23, 2012. | |||||||||
(b) issued 3,000,000 restricted common shares valued at $360,000 to two shareholders pursuant to deferred compensation agreements dated February 15, 2014. | |||||||||
During the three months ended March 31, 2013 the Company: | |||||||||
(a) issued 80,000 restricted common shares valued at $8,000 to a consultant for her services earned in 2012. | |||||||||
(b) issued 800,000 restricted common shares for cash in the amount of $80,000 pursuant to private placement subscription agreements. | |||||||||
(c) issued 62,500 restricted common shares for cash received in 2012 in the amount of $5,000 pursuant to a private placement subscription agreement. |
INCOME_TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2014 | |
Notes to Financial Statements | ' |
NOTE 9 - INCOME TAXES | ' |
As of March 31, 2014, the Company had net operating loss carryforwards of approximately $26,000,000 that may be available to reduce future years' taxable income and will expire between the years 2014 - 2034. Availability of tax losses is subject to change of ownership limitations under Internal Revenue Code 382. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carryforwards. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||
NOTE 10- COMMITMENTS AND CONTINGENCIES | ' | ||||||||||||||||
On February 21, 2002, the Company issued 350,000 shares valued at $119,000 to Empire Sterling Corporation for services to be rendered with respect to the acquisition of ACGT Corporation (“ACGT”). The shares were to be held in trust and not sold until all necessary financing was in place to complete the ACGT acquisition. Empire Sterling Corporation breached the trust agreement and the Company placed a stop transfer on these shares and requested they be returned to the Company. Empire Sterling Corporation failed to return the share certificate and as such, the Company commenced court proceedings against the principals of Empire Sterling Corporation. The Company argued for an interim injunction against all parties and was successful. On May 9, 2002, the Court ordered Empire Sterling Corporation to deposit the shares with the Court pending judicial disposition. The Company continued to file legal process claiming ownership of the shares and breach of trust inter alia. The Company was successful and has now applied to have the share certificates released and subsequently cancelled. As of March 31, 2014, the Company is still in the process of having the certificates released. | |||||||||||||||||
In February, 2008, the Company received a demand notice from CGG Veritas for failure to pay an outstanding balance of $317,380 pursuant to a Master Agreement and Job Supplement for the Shotgun Draw 2D Seismic Program in Utah. In accordance with Section 15.3 of the Master Agreement and Job Supplement dated March 21, 2007, CGG has demanded payment by April 25, 2008. If CGG Veritas is forced to proceed with litigation of this matter, it will seek reimbursement of its attorneys’ fees and expenses related to the litigation. The Company is currently examining various alternatives to resolve this matter. CGG Veritas has not proceeded with litigation as of March 31, 2014. | |||||||||||||||||
The Company conducts busines in Canada and the Goods and Services Tax is defined in law at Part IX of the Excise Tax Act. GST is levied on supplies of goods or services purchased in Canada and includes most products, except certain politically sensitive essentials such as groceries, residential rent, and medical services, and services such as financial services. Businesses that purchase goods and services that are consumed, used or supplied in the course of their "commercial activities" can claim "input tax credits" subject to prescribed documentation requirements (i.e., when they remit to the Canada Revenue Agency the GST they have collected in any given period of time, they are allowed to deduct the amount of GST they paid during that period). In 2013, the Company received a demand from Canada Revenue Agency to file outstanding corporate income tax returns for the years 2000-2012 as required under GST rules. The Company filed these returns and all of the returns had $Nil tax payable. However, Canada Revenue Agency imposed late filing penalties and interest totalling $45,533 for the corporate tax returns. The Company has filed notices of objection for all the years 2000-2012 and will dispute the penalties and interest. The Company has had no response from Canada Revenue Agency as at March 31, 2014. | |||||||||||||||||
As of August 1, 2012, the Company has leased 1250 sq. ft of office space from Holm Investments Ltd. at $2,500 per month for a period of 3 years with a renewal option. | |||||||||||||||||
Payments | 2014 | 2015 | 2016 | TOTAL | |||||||||||||
Office Rent | $ | 30,000 | $ | 30,000 | $ | 30,000 | $ | 90,000 |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2014 | |
Notes to Financial Statements | ' |
NOTE 11 - SUBSEQUENT EVENTS | ' |
The Company issued 6,000,000 restricted common shares valued at $180,000 to two shareholders pursuant to deferred compensation marketing agreements dated May 1, 2014. |
BASIS_OF_PRESENTATION_Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Basis Of Presentation Policies | ' | ||||||||||||||||
Concentration of Credit Risk | ' | ||||||||||||||||
Cash in bank accounts is at risk to the extent that it exceeds U.S.Federal Deposit Insurance Corporation and Canadian Deposit Insurance Corporation insured amounts. To minimize risk, the Company places its cash with high credit quality institutions. All cash is deposited in one prominent Canadian financial institution. | |||||||||||||||||
Fair Value of Financial Instruments | ' | ||||||||||||||||
The Company’s financial instruments include cash, receivables, prepaid expenses, available-for-sale securities and due to related parties. Management believes the fair values of these financial instruments approximate their carrying values due to their short-term nature. The Company adopted ASC Topic 820-10 for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). Topic 820-10 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements Topic 820-10 defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of nonperformance risk including our own credit risk. In addition to defining fair value, Topic 820-10 expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are: | |||||||||||||||||
* Level 1 – inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. | |||||||||||||||||
* Level 2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |||||||||||||||||
* Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. | |||||||||||||||||
In general, and where applicable, we use quoted prices in an active market for identical derivative assets and liabilities that are traded on exchanges. These derivative assets and liabilities are included in Level 1.The application of the three levels of the fair value hierarchy under Topic 820-10-35 to our assets and liabilities are described below: | |||||||||||||||||
Fair Value Measurements | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total Fair Value | ||||||||||||||
Assets | |||||||||||||||||
Cash | $ | 15,280 | $ | - | $ | - | $ | 15,280 | |||||||||
Prepaid Expenses | 4,200 | 4,200 | |||||||||||||||
Inventory | 13,111 | - | - | 13,111 | |||||||||||||
Total | $ | 32,591 | $ | - | $ | - | $ | 32,591 | |||||||||
Liabilities | |||||||||||||||||
Current and related party | $ | 615,864 | $ | - | $ | - | $ | 615,864 | |||||||||
Total | $ | 615,864 | $ | - | $ | - | $ | 615,864 | |||||||||
Foreign Currency Translation | ' | ||||||||||||||||
The financial statements are presented in United States dollars. In accordance with ASC Topic 830 “Foreign Currency Matters”, foreign denominated monetary assets and liabilities are translated to their United States dollar equivalents using foreign exchange rates that prevailed at the balance sheet date. Non-monetary assets and liabilities are translated at exchange rates prevailing at the transaction date. Revenue and expenses are translated at average rates of exchange during the year. Related translation adjustments are reported as a separate component of stockholders’ equity, whereas gains or losses resulting from foreign currency transactions are included in results of operations. | |||||||||||||||||
Available For Sale Securities - related parties | ' | ||||||||||||||||
The Company holds marketable equity securities which are available-for-sale and as such, their carrying value is adjusted to market at the end of each reporting period. As required by ASC Topic 220 (formerly SFAS 130),, unrealized gains and losses on these investments are recorded as a component of accumulated other comprehensive income (loss) and are recorded as a component of net income (loss) when realized. However, if there is a permanent decline in the market value of available-for-sale securities, this permanent market value adjustment is taken into income in the period. | |||||||||||||||||
Stock-Based Compensation | ' | ||||||||||||||||
On January 1, 2006, the Company adopted the fair value recognition provisions of ASC Topic 718 & 505. Prior to January 1, 2006, the Company accounted for share-based payments under the recognition and measurement provisions of ASC Topic 718. In accordance with ASC Topic 718 no compensation cost was required to be recognized for options granted that had an exercise price equal to the market value of the underlying common stock on the date of grant. . The Company uses the Black-Scholes pricing model to calculate the fair value of options and warrants issued to both employees and non-employees. Stock issued for compensation is valued using the market price of the stock on the date of the related agreement. In addition, deferred stock compensation related to non-vested options is required to be eliminated against additional paid-in capital. The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with ASC Topic 718 & 505. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. | |||||||||||||||||
Intangible assets | ' | ||||||||||||||||
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350 , “Intangibles-Goodwill and Other” requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead tested for impairment at least annually in accordance with the provisions of ASC 350. This standard also requires that intangible assets with definite useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment. The Company's intangible assets consist of the acquisition of the license to import and distribute wine & liquor products and various brands and labels. The Company determined that the intangibles have an estimated useful life of 18 years and will be reviewed annually for impairment. Amortization will be recorded over the estimated useful life of the assets using the straight-line method for financial statement purposes. The Company will commence amortization when the economic benefits of the assets begin to be consumed in January, 2013. Other intangibles are carried at acquisition cost less accumulated amortization. Amortization is provided over the estimated useful lives of the assets on straight line basis per annum. | |||||||||||||||||
Definite life intangible assets are tested for recoverability whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. These tests involve the use of estimates and assumptions appropriate in the circumstances. In assessing fair value, valuation models are used that include discounted cash flows. The models use assumptions that include levels of growth in assets under management from net sales and market, pricing and margin changes, synergies achieved on acquisition, discount rates, and observable data for comparable transactions. In February 2014, the Company’s intangible assets were terminated by mutual agreement and the exclusive license agreement was written down to $Nil. | |||||||||||||||||
Income Taxes | ' | ||||||||||||||||
The Company follows the liability method of accounting for income taxes as set forth in ASC Topic 740-10. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax balances. Deferred tax assets and liabilities are measured using enacted or substantially enacted tax rates expected to apply to the taxable income in the years in which those differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment. A valuation allowance is provided for deferred tax assets if it is more likely than not that the Company will not realize the future benefit, or if the future deductibility is uncertain. In accordance with ASC 740-10. This interpretation introduces a new approach that changes how enterprises recognize and measure tax benefits associated with tax positions and how enterprises disclose uncertainties related to income tax positions in their financial statements. | |||||||||||||||||
Inventory | ' | ||||||||||||||||
Inventories consist of merchandise held for sale in the ordinary course of business, including cost of freight and other miscellaneous acquisition costs, and are stated at the lower of cost, or market determined on the first-in-first-out basis. The Company records a write-down for inventories, which have become obsolete or are in excess of anticipated demand or net realizable value. The Company performs a detailed review of inventory each period that considers multiple factors including demand forecasts, market conditions, product life cycle status, product development plans and current sales levels. If future demand or market conditions for the Companys products are less favorable than forecasted or if unforeseen changes negatively affect the utility of the Companys inventory, it may be required to record additional write-downs, which would negatively affect gross margins in the period when the write-downs are recorded. If actual market conditions are more favorable, the Company may have higher gross margins when products incorporating inventory that were previously written down are sold. | |||||||||||||||||
Revenue Recognition | ' | ||||||||||||||||
Sales are recognized upon purchase by customers at our product facility. All sales at our product facility are final, allowing for no sales returns. As at March 31, 2014, $Nil (2012 - $Nil) is in accounts receivable from the sale of water units. | |||||||||||||||||
Recent Accounting Pronouncements | ' | ||||||||||||||||
There have been no recent accounting pronouncements not yet adopted by the Company which would have a material impact on our financial statements. |
BASIS_OF_PRESENTATION_Tables
BASIS OF PRESENTATION (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Basis Of Presentation Tables | ' | ||||||||||||||||
Derivative assets and liabilities | ' | ||||||||||||||||
Fair Value Measurements | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total Fair Value | ||||||||||||||
Assets | |||||||||||||||||
Cash | $ | 15,280 | $ | - | $ | - | $ | 15,280 | |||||||||
Prepaid Expenses | 4,200 | 4,200 | |||||||||||||||
Inventory | 13,111 | - | - | 13,111 | |||||||||||||
Total | $ | 32,591 | $ | - | $ | - | $ | 32,591 | |||||||||
Liabilities | |||||||||||||||||
Current and related party | $ | 615,864 | $ | - | $ | - | $ | 615,864 | |||||||||
Total | $ | 615,864 | $ | - | $ | - | $ | 615,864 |
AVAILABLEFORSALE_SECURITIES_RE1
AVAILABLE-FOR-SALE SECURITIES - RELATED PARTIES (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Available-For-Sale Securities - Related Parties Tables | ' | ||||||||
Available for sale securities | ' | ||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
408,402 (2012-408,402) shares of Legacy Platinum Group Inc. | $ | 69,442 | $ | 36,763 | |||||
2,465 (2012- 2,465) shares of Golden Star Enterprises Ltd. | 32 | 32 | |||||||
$ | 69,474 | $ | 36,795 |
INTANGIBLE_ASSETS_Tables
INTANGIBLE ASSETS (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Intangible Assets Tables | ' | ||||||||
Intangible assets | ' | ||||||||
March 31, | December 31, | ||||||||
Description | 2014 | 2013 | |||||||
18 year general license to manufacture and distribute water units | $ | 1,560,000 | $ | 1,560,000 | |||||
Less: related party portion of consideration for license | (67,257 | ) | (67,257 | ) | |||||
Less: accumulated amortization | (93,296 | ) | (82,930 | ) | |||||
Balance | $ | 1,399,447 | $ | 1,409,813 | |||||
Less: value of shares cancelled and returned to treasury | (1,175,200 | ) | (1,175,200 | ) | |||||
Less: write-down of exclusive license | (224,247 | ) | - | ||||||
Balance | $ Nil | $ | 1,472,010 | ||||||
STOCKHOLDERS_EQUITY_Tables
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
2014 Stock Options | ' | ||||||||||||
Stock option activity | ' | ||||||||||||
The Company’s stock option activity is as follows: | |||||||||||||
Weighted Average Remaining Contractual Life | |||||||||||||
(in years) | |||||||||||||
Number of options | Weighted Average Exercise Price | ||||||||||||
Balance, December 31, 2012 | 7,000,000 | 0.013 | 5 | ||||||||||
Granted during the period | - | - | - | ||||||||||
Exercised during the period | - | - | - | ||||||||||
Balance, December 31, 2013 | 7,000,000 | 0.013 | 5 | ||||||||||
Granted during the period | - | - | - | ||||||||||
Exercised during the period | - | - | - | ||||||||||
Balance March 31,2014 | 7,000,000 | 0.013 | 5 | ||||||||||
2013 Stock Options | ' | ||||||||||||
Stock option activity | ' | ||||||||||||
The Company’s stock option activity is as follows: | |||||||||||||
Weighted Average Remaining Contractual Life | |||||||||||||
(in years) | |||||||||||||
Weighted Average Exercise Price | |||||||||||||
Number of options | |||||||||||||
Balance, December 31, 2011 | - | - | - | ||||||||||
Granted during 2012 | 26,000,000 | 0.013 | 5 | ||||||||||
Exercised during 2012 | (19,000,000 | ) | 0.013 | ||||||||||
Balance, December 31, 2012 | 7,000,000 | 0.013 | 5 | ||||||||||
Granted during the period | - | - | - | ||||||||||
Exercised during the period | - | - | - | ||||||||||
Balance March 31,2013 | 7,000,000 | 0.013 | 5 | ||||||||||
RELATED_PARTY_TRANSACTIONS_Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Related Party Transactions Tables | ' | ||||||||
Amounts are due to related parties | ' | ||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Significant shareholders | $ | 131,177 | $ | 56,129 |
SUPPLEMENTAL_CASH_FLOW_INFORMA1
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Supplemental Cash Flow Information Tables | ' | ||||||||
SUPPLEMENTAL CASH FLOW INFORMATION | ' | ||||||||
Three months | |||||||||
ended March 31, | |||||||||
2014 | 2013 | ||||||||
Cash paid during the period for: | |||||||||
Interest | $ | - | $ | - | |||||
Income taxes | $ | - | $ | - |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Commitments And Contingencies Tables | ' | ||||||||||||||||
Future rent payments obligation | ' | ||||||||||||||||
Payments | 2014 | 2015 | 2016 | TOTAL | |||||||||||||
Office Rent | $ | 30,000 | $ | 30,000 | $ | 30,000 | $ | 90,000 |
NATURE_OF_OPERATIONS_Details_N
NATURE OF OPERATIONS (Details Narrative) (USD $) | 3 Months Ended | 219 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | |
Nature Of Operations Details Narrative | ' | ' | ' |
Entity incorporation date | 29-Nov-83 | ' | ' |
Entity incorporation state | 'State of Nevada | ' | ' |
Revenue generated | $32,000 | $4,104 | $72,476 |
Losses on revenue of product and services | ' | ' | $26,026,068 |
BASIS_OF_PRESENTATION_Details
BASIS OF PRESENTATION (Details) (USD $) | Mar. 31, 2014 |
Assets | ' |
Cash | $15,280 |
Prepaid Expenses | 4,200 |
Inventory | 13,111 |
Total Asset fair value | 32,591 |
Liabilities | ' |
Current and related party | 615,864 |
Total Liabilities Fair Value | 615,864 |
Fair Value, Inputs, Level 1 [Member] | ' |
Assets | ' |
Cash | 15,280 |
Prepaid Expenses | 4,200 |
Inventory | 13,111 |
Total Asset fair value | 32,591 |
Liabilities | ' |
Current and related party | 615,864 |
Total Liabilities Fair Value | 615,864 |
Fair Value, Inputs, Level 2 [Member] | ' |
Assets | ' |
Cash | ' |
Prepaid Expenses | ' |
Inventory | ' |
Total Asset fair value | ' |
Liabilities | ' |
Current and related party | ' |
Total Liabilities Fair Value | ' |
Fair Value, Inputs, Level 3 [Member] | ' |
Assets | ' |
Cash | ' |
Prepaid Expenses | ' |
Inventory | ' |
Total Asset fair value | ' |
Liabilities | ' |
Current and related party | ' |
Total Liabilities Fair Value | ' |
BASIS_OF_PRESENTATION_Details_
BASIS OF PRESENTATION (Details Narrative) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Dec. 31, 2013 | |
Basis Of Presentation Details Narrative | ' | ' |
Intangible assets estimated useful life | '18 years | ' |
Accounts receivable | $0 | $0 |
AVAILABLEFORSALE_SECURITIES_RE2
AVAILABLE-FOR-SALE SECURITIES - RELATED PARTIES (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Available for sale securities - related parties | $69,474 | $36,795 |
Legacy [Member] | ' | ' |
Available for sale securities - related parties | 69,442 | 36,763 |
Golden Star Enterprises [Member] | ' | ' |
Available for sale securities - related parties | $32 | $32 |
AVAILABLEFORSALE_SECURITIES_RE3
AVAILABLE-FOR-SALE SECURITIES - RELATED PARTIES (Details Narrative) (USD $) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2014 | Dec. 31, 2013 | |
Golden Star [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Unrealized gain/ loss in the carrying value of its available for sale securities | $0 | $57 |
Sold shares to related parties | 0 | 0 |
Carrying value of the available for sale shares | 32 | 32 |
Legacy [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Unrealized gain/ loss in the carrying value of its available for sale securities | 32,679 | 33,822 |
Sold shares to related parties | 0 | 0 |
Carrying value of the available for sale shares | $69,351 | $36,763 |
INTANGIBLE_ASSETS_Details
INTANGIBLE ASSETS (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Intangible Assets Details | ' | ' |
18 year general license to manufacture and distribute water units | $1,560,000 | $1,560,000 |
Less: related party portion of consideration for license | -67,257 | -67,257 |
Less: accumulated amortization | -93,296 | -82,930 |
Balance | 1,399,447 | 1,409,813 |
Less: value of shares cancelled and returned to treasury | -1,175,200 | -1,175,200 |
Less: write-down of exclusive license | -224,247 | ' |
Balance | ' | $1,472,010 |
DEFERRED_COMPENSATION_Details_
DEFERRED COMPENSATION (Details Narrative) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
Deferred Compensation Details Narrative | ' | ' | ' |
Amortization cost for deferred compensation | $34,932 | $16,182 | ' |
Unamortized portion of deferred compensation | $352,000 | ' | $26,932 |
STOCKHOLDERS_EQUITY_Details
STOCKHOLDERS' EQUITY (Details) (2014 Stock Options, USD $) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2014 | Dec. 31, 2013 | |
2014 Stock Options | ' | ' |
Number of Options | ' | ' |
Begining balance | 7,000,000 | 7,000,000 |
Granted | ' | ' |
Exercised | ' | ' |
Ending balance | 7,000,000 | 7,000,000 |
Weighted Average Exercise Price | ' | ' |
Begining balance | $0.01 | $0.01 |
Granted | ' | ' |
Exercised | ' | ' |
Ending balance | $0.01 | $0.01 |
Weighted Average Remaining Contractual Life | ' | ' |
Begining balance | '5 years | '5 years |
Ending balance | '5 years | '5 years |
STOCKHOLDERS_EQUITY_Details_1
STOCKHOLDERS' EQUITY (Details 1) (2013 Stock Options, USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
2013 Stock Options | ' | ' |
Number of Options | ' | ' |
Begining balance | ' | 7,000,000 |
Granted | 26,000,000 | ' |
Exercised | -19,000,000 | ' |
Ending balance | ' | 7,000,000 |
Weighted Average Exercise Price | ' | ' |
Begining balance | ' | $0.01 |
Granted | $0.01 | ' |
Exercised | $0.01 | ' |
Ending balance | ' | $0.01 |
Weighted Average Remaining Contractual Life | ' | ' |
Begining balance | ' | '5 years |
Granted | '5 years | '0 years |
Exercised | '0 years | '0 years |
Ending balance | ' | '5 years |
STOCKHOLDERS_EQUITY_Details_Na
STOCKHOLDERS' EQUITY (Details Narrative) (USD $) | 3 Months Ended | ||||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | |
Licensing Agreement [Member] | Consultant [Member] | Private placement subscription agreement One [Member] | Private placement subscription agreement [Member] | Deferred Compensation Agreements [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Restricted Common shares cancelled | 90,400,000 | ' | ' | ' | ' |
Restricted Common shares issued | ' | 80,000 | ' | ' | 3,000,000 |
Restricted Common shares issued, value | $1,175,200 | $8,000 | ' | ' | $360,000 |
Restricted Common shares for cash | ' | ' | 800,000 | 62,500 | ' |
Restricted Common shares for cash,Value | ' | ' | $80,000 | $5,000 | ' |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Related Party Transactions Details | ' | ' |
Significant shareholders | $131,177 | $56,129 |
RELATED_PARTY_TRANSACTIONS_Det1
RELATED PARTY TRANSACTIONS (Details Narrative) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Related Party Transactions Details Narrative | ' | ' |
Payment to directors for fees | $3,600 | $5,000 |
Consulting and management fees to shareholders | 22,750 | 97,750 |
Incurred expenses for office rent | 7,828 | 8,688 |
Shareholders earning for deferred compensation agreements | $18,846 | $7,596 |
SUPPLEMENTAL_CASH_FLOW_INFORMA2
SUPPLEMENTAL CASH FLOW INFORMATION (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Cash paid during the period for: | ' | ' |
Interest | ' | ' |
Income taxes | ' | ' |
INCOME_TAXES_Details_Narrative
INCOME TAXES (Details Narrative) (USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Income Taxes Details Narrative | ' |
Net operating loss carryforwards | $26,000,000 |
Net operating loss carryforwards expiry period | ' 2014 to 2034 |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | Mar. 31, 2014 |
Commitments And Contingencies Details | ' |
Office Rent 2013 | $30,000 |
Office Rent 2014 | 30,000 |
Office Rent 2015 | 30,000 |
TOTAL | $90,000 |