Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 20, 2016 | |
Document and Entity Information: | ||
Entity Registrant Name | EnergyTEK Corp. | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Entity Central Index Key | 748,268 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 25,587,964 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | entk |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 | |
CURRENT ASSETS | |||
Cash | $ 1,428 | $ 6,647 | |
Accounts receivable (net) | 624 | 624 | |
TOTAL CURRENT ASSETS | 2,052 | 7,271 | |
Property, plant and equipment, net | 16,619 | 21,769 | |
Intangible assets | 100,000 | 100,000 | |
TOTAL ASSETS | 118,671 | 129,040 | |
CURRENT LIABILITIES | |||
Accounts payable and accrued expenses | 61,601 | 59,245 | |
Other current liabilities | 0 | 0 | |
Notes payable - current portion | 142,942 | 110,942 | |
Notes payable - related party | 142,562 | 142,562 | |
TOTAL OTHER CURRENT LIABILITIES | 347,105 | 312,749 | |
TOTAL LIABILITIES | $ 347,105 | $ 312,749 | |
COMMITMENTS AND CONTINGENCIES | |||
Preferred Stock 10,000,000 authorized | $ 3,009 | $ 3,009 | |
Common Stock 500,000,000 authorized at $0.001 par value; 22,787,964 shares issued and outstanding March 31, 2016 and December 31, 2015. | 22,788 | 22,788 | |
Additional paid-in capital | 24,727,584 | 24,727,584 | |
Accumulated deficit | (24,981,815) | (24,937,090) | |
TOTAL EQUITY (DEFICIT) | (228,434) | (183,709) | |
TOTAL LIABILITIES AND EQUITY (DEFICIT) | 118,671 | 129,040 | |
Series B Preferred Stock | |||
CURRENT LIABILITIES | |||
Preferred Stock 10,000,000 authorized | [1] | 3,000 | 3,000 |
Series C Preferred Stock | |||
CURRENT LIABILITIES | |||
Preferred Stock 10,000,000 authorized | [2] | $ 9 | $ 9 |
[1] | Series B $0.01 par value 300,000 shares issued and outstanding at March 31, 2016 and December 31, 2015 | ||
[2] | Series C $0.01 par value 890 shares issued and outstanding at March 31, 2016 and 890 at December 31, 2015 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
Common Stock, par or stated value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 500,000,000 | 500,000,000 |
Common Stock, shares issued | 22,787,964 | 22,787,964 |
Common Stock, shares outstanding | 22,787,964 | 22,787,964 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Par Value | $ 0.01 | |
Series B Preferred Stock | ||
Preferred Stock, Par Value | $ 0.01 | $ 0.01 |
Preferred Stock, shares issued | 300,000 | 300,000 |
Preferred Stock, shares outstanding | 300,000 | 300,000 |
Series C Preferred Stock | ||
Preferred Stock, Par Value | $ 0.01 | $ 0.01 |
Preferred Stock, shares issued | 890 | 890 |
Preferred Stock, shares outstanding | 890 | 890 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement | ||
REVENUES | $ 0 | $ 26,142 |
COST OF SALES | 0 | 24,685 |
GROSS PROFIT | 0 | 1,457 |
OPERATING EXPENSES | 44,666 | 37,633 |
NET INCOME (LOSS) FROM OPERATIONS | (44,666) | (36,176) |
OTHER INCOME (EXPENSE) | ||
Gain on derivative liability | 0 | 58,002 |
Interest expense | (59) | (79,906) |
TOTAL OTHER INCOME (EXPENSE) | (59) | (21,904) |
INCOME (LOSS) FROM CONTINUING OPERATING BEFORE INCOME TAXES | (44,725) | (58,080) |
Income taxes | 0 | 0 |
NET INCOME (LOSS) | $ (44,725) | $ (58,080) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVIES | ||
Net income (loss) from continuing operations | $ (44,725) | $ (58,080) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Depreciation | 5,150 | 5,150 |
Impairment expense | 0 | 0 |
Loss on asset disposal | 0 | 0 |
Gain on derivative liability | 0 | 67,017 |
Accretion debt discount | 0 | 18,887 |
(Increase) decrease in accounts receivable | 0 | 624 |
Increase (decrease) in accounts payable/accrued expenses | 2,356 | (30,552) |
NET CASH USED IN OPERATING ACTIVITIES | (37,219) | 3,046 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of equipment | 0 | 0 |
NET CASH PROVIDED (USED) IN INVESTING ACTIVITIES | 0 | 0 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Issuance of note receivable | 0 | 0 |
Issuance of notes payable | 32,000 | 2,400 |
Net additional funding by related party notes | 0 | 0 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 32,000 | 2,400 |
NET DECREASE IN CASH | (5,219) | 5,446 |
CASH, BEGINNING OF PERIOD | 6,647 | 923 |
CASH, END OF PERIOD | 1,428 | 6,369 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Interest paid | 0 | 0 |
Income taxes paid | 0 | 0 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES | ||
Common stock issued for investment | 0 | 2,200,000 |
Common stock exchanged for debt | $ 0 | $ 33,400 |
Note 1 - Recent Company Backgro
Note 1 - Recent Company Background | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 1 - Recent Company Background | NOTE 1 - RECENT COMPANY BACKGROUND EnergyTek Corp. formerly Broadleaf Capital Partners, Inc. (the Company), is a Nevada company. In November of 2013 the Company formed a wholly owned subsidiary Sustained Release, Inc. Although a private placement memorandum was done in December 2013, no funds were raised. On February 13, 2014, the Company sold its wholly- owned subsidiary Pipeline Nutrition to a related party. For accounting purposes, the effective date of the transaction was retroactively made to be December 31, 2013. Our financial statements presented here reflect this event for both periods presented. During March 2014 we formed a new subsidiary Texas Gulf Exploration & Production, Inc. which, on March 28, 2014, acquired the majority of assets of Texas Gulf Oil & Gas Inc. Also in March 2014 we formed another new subsidiary Legal Capital Corp., which on March 28, 2014 acquired the majority of assets of Litigation Capital, Inc. On March 31, 2014 we entered into an agreement whereby the acquisition of our subsidiary, Sustained Release, Inc., was rescinded. No sales of Preferred Stock were ever sold in this proposed private placement and the Company has withdrawn this private offering. In January 2015 we entered into a Joint Venture with Wagley Offshore-Onshore, Inc. to acquire distressed energy assets. |
Note 2 - Significant Accounting
Note 2 - Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 2 - Significant Accounting Policies | NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES This summary of significant account policies of the Company is presented to assist in understanding the Company's financial statements. The financial statements and the notes are the representation of the Company's management, who are responsible for their integrity and objectivity. These accounting policies conform to U.S. generally accepted accounting principles ("US GAAP") and have been consistently applied in the preparation of the financial statements. Basis of Presentation The Consolidated Financial Statements include the accounts of the Company and its majority-owned and wholly-owned subsidiaries. All significant intercompany account balances, transactions, profits and losses have been eliminated. Principles of Consolidation The financial statements include the accounts of the Company and its subsidiaries. Intercompany transactions and balances have been eliminated. Equity investments through which we exercise significant influence over but do not control the investee and are not the primary beneficiary of the investee's activities are accounted for using the equity method where applicable. Investments through which we are not able to exercise significant influence over the investee and which do not have readily determinable fair values are accounted for under the cost method where applicable. Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Fair Value of Financial Instruments For certain of the Company's financial instruments, including cash and cash equivalents, accounts receivable, and accounts payable, the carrying amounts approximate fair value due to their short maturities. Revenue Recognition The Company ASC No. 605 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the sales price is fixed or determinable, and (iii) collectability is reasonably assured. Cash and Cash Equivalents Cash comprises cash in hand and cash held on demand with banks. The Company considers all highly liquid investments with original maturities of 90 days or less to be cash equivalents. Cash equivalents are carried at cost, which approximates market value. Cash and cash equivalents comprise of the non-interest bearing checking accounts in US Dollars. Accounts Receivable, Net Accounts receivable represent amounts due from customers on product and other sales. These accounts receivable, which are reduced by an allowance for doubtful accounts, are recorded at the invoiced amount and do not bear interest. The Company evaluates the collectability of its accounts receivable based on a combination of factors, including whether sales were made pursuant to letters of credit. In cases where management is aware of circumstances that may impair a specific customer's ability to meet its financial obligations, management records a specific allowance against amounts due, and reduces the net recognized receivable to the amount the Company believes will be collected. For all other customers, the Company maintains an allowance that considers the total receivables outstanding, historical collection rates and economic trends. Accounts are written off when all efforts to collect have been exhausted. Stock Based Compensation When applicable, the Company will account for stock-based payments to employees in accordance with ASC 718, "Stock Compensation" ("ASC 718"). Stock-based payments to employees include grants of stock, grants of stock options and issuance of warrants that are recognized in the consolidated statement of operations based on their fair values at the date of grant. The Company accounts for stock-based payments to non-employees in accordance with ASC 505-50, "Equity-Based Payments to Non-Employees." Stock-based payments to non-employees include grants of stock, grants of stock options and issuances of warrants that are recognized in the consolidated statement of operations based on the value of the vested portion of the award over the requisite service period as measured at its then-current fair value as of each financial reporting date. The Company calculates the fair value of option grants and warrant issuances utilizing the Binomial pricing model. The amount of stock-based compensation recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest. ASC 718 requires forfeitures to be estimated at the time stock options are granted and warrants are issued to employees and non-employees, and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The term "forfeitures" is distinct from "cancellations" or "expirations" and represents only the unvested portion of the surrendered stock option or warrant. The Company estimates forfeiture rates for all unvested awards when calculating the expense for the period. In estimating the forfeiture rate, the Company monitors both stock option and warrant exercises as well as employee termination patterns. The resulting stock-based compensation expense for both employee and non-employee awards is generally recognized on a straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period. Property, Plant and Equipment Property, plant and equipment are recorded at cost less accumulated depreciation. Expenditures for major additions and improvements are capitalized. As property and equipment are sold or retired, the applicable cost and accumulated depreciation are removed from the accounts and any resulting gain or loss thereon is recognized as operating expenses. Depreciation is calculated using the straight-line method over the estimated useful lives or, in the case of leasehold improvements, the term of the related lease, including renewal periods, if shorter. Estimated useful lives are as follows: Buildings 40 years Equipment 5-15 years The Company reviews property, plant and equipment and all amortizable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Recoverability is based on estimated undiscounted cash flows. Measurement of the impairment loss, if any, is based on the difference between the carrying value and fair value. Impairment of Long-Lived Assets and Amortizable Intangible Assets The Company follows ASC 360-10, "Property, Plant, and Equipment," "primary asset" Intangible Assets - Goodwill The excess of the purchase price over net tangible and identifiable intangible assets of business acquired is carried as Goodwill on the balance sheet. Goodwill is not amortized, but instead is assessed for impairment at least annually and upon the occurrence of certain triggering events or substantive changes in circumstances that indicate that the fair value of goodwill may be impaired. Measurement of the impairment loss, if any, is based on the difference between the carrying value and fair value of reporting unit. The goodwill impairment test follows a two-step process. In the first step, the fair value of a reporting unit is compared to its carrying value. If the carrying value of a reporting unit exceeds its fair value, the second step of the impairment test is performed for purposes of measuring the impairment. In the second step, the fair value of the reporting unit is allocated to all of the assets and liabilities of the reporting unit to determine an implied goodwill value. If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of goodwill, an impairment loss will be recognized in an amount equal to that excess. During the quarter ended the company did not recognized any impairment charges. Business segments ASC 280, "Segment Reporting" "management approach" Acquisitions The Company recognizes the assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree at the acquisition date, measured at their fair values as of that date. Contingent purchase consideration is recorded at fair value at the date of acquisition. Any excess purchase price over the fair value of the net assets acquired is recorded as goodwill. Within one year from the date of acquisition, the Company may update the value allocated to the assets acquired and liabilities assumed and the resulting goodwill balances as a result of information received regarding the valuation of such assets and liabilities that was not available at the time of purchase. Measuring assets and liabilities at fair value requires the Company to determine the price that would be paid by a third party market participant based on the highest and best use of the assets or interests acquired. Acquisition costs are expensed as incurred. Fair Value Measurements For certain financial instruments, including accounts receivable, accounts payable, interest payable, advances payable and notes payable, the carrying amounts approximate fair value due to their relatively short maturities. On January 1, 2008, the Company adopted ASC 820-10, "Fair Value Measurements and Disclosures." Level 1 inputs to the valuation methodology are quoted prices 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 inputs to the valuation methodology are unobservable and significant to the fair value measurement. The Company did not identify any non-recurring assets and liabilities that are required to be presented in the balance sheets at fair value in accordance with ASC 815. In February 2007, the FASB issued ASC 825-10 "Financial Instruments." Income Taxes Deferred income taxes are provided using the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry-forwards, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Applicable interest and penalties associated with unrecognized tax benefits are classified as additional income taxes in the statements of operations. Borrowings Borrowings are recognized initially at cost which is the fair value of the proceeds received, net of transaction costs incurred. In subsequent periods, borrowings are stated at amortized cost using the effective yield method; any difference between fair value of the proceeds (net of transaction costs) and the redemption amount is recognized as interest expense over the period of the borrowings. Provisions Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. Where the Company expects a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The Company recognizes the estimated liability to repair or replace products sold still under warranty at the balance sheet date. This provision is calculated based on past history of the level of repairs and replacements. Legal Matters The Company is not currently involved in any litigation and no reserves for litigation costs have been made at this time. Special Purpose Entities The Company does not have any off-balance sheet financing activities. Net Income per Share The Company computes net income (loss) per share in accordance with ASC 260-10, "Earnings Per Share." "as if converted" Common Stock There is currently only one class of common stock. Each share common stock is entitled to one vote. The authorized number of common stock of the Company at December 31, 2015 was 500,000,000 shares with a par value per share of $0.001. Authorized shares that have been issued and fully paid amounted to 22,787,964 as of December 31, 2015 and 1,508,367 as of December 31, 2014. Our common authorized shares were increased on July 23, 2014 from 250,000,000 to 500,000,000. We also effectuated a 1 for 150 reverse stock split of our common stock on July 23, 2014. All our financial information in these statements have been adjusted to reflect that split. Preferred Stock On November 16, 2013, the Company's Board of Directors authorized the issuance of Preferred stock of 10,000,000 with a par value of $0.01 per share. The terms of these shares will be determined upon issuance; however, no shares were ever sold or issued. In March of 2014 the Company issued 900 shares of Series A Preferred Stock. Series A Preferred Stock shall have the right to convert any or all of the series of Series A Preferred Stock into Common Stock. Each share of Series A Preferred Stock shall be convertible at the option of the holder at any time, after the date of issuance of such shares. Each Series A Preferred Share converts into one hundred thousand (100,000) shares of Common Stock. On May 21, 2014, the 900 shares of Series A Preferred Stock were exchanged for 900 Shares of Series C Preferred Stock. Series C Stock shall have the right to convert any or all of the series of Series A Preferred Stock into Common Stock. Each share of Series C Preferred Stock shall be convertible at the option of the holder at any time, after the date of issuance of such shares. Each Series C Preferred Share converts into one hundred thousand (100,000) shares of Common Stock. Prior to January 1, 2016, in no event shall the number of Series C Preferred Stock or the number of shares of Common Stock into which the Series C Preferred Stock is convertible be subject to any adjustment resulting from a reverse split of the Common Stock. On all matters the holders of Series C Preferred Stock and the holders of Common Stock shall vote together and not as separate classes. Each holder of Series C Preferred Stock shall be entitled to one (1) vote for each share of series C Preferred Stock held. On January 9, 2015 10 Series C shares were exchanged for 1,000,000 shares of our Common Stock. In March of 2014 the Company issued 300,000 shares of Series B Preferred stock. The holders of Series B Preferred Stock shall be entitled to when and if declared by the Board of Directors out of the funds of the Company, non-cumulative cash dividends accruing on a daily basis from the date of issuance of the Series B Preferred Stock through and including the date on which dividends are paid at an annual rate of six percent (6%) per share of Series B Preferred Stock. Reclassifications Certain reclassifications have been made to prior year balances to conform to the current year presentation. Comprehensive Income Comprehensive income represents net income plus the change in equity of a business enterprise resulting from transactions and circumstances from non-owner sources. The Company's comprehensive income equal net income for the three months ended March 31, 2016, and 2015. |
Note 3 - Recent Accounting Pron
Note 3 - Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 3 - Recent Accounting Pronouncements | NOTE 3 – RECENT ACCOUNTING PRONOUNCEMENTS The Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
Note 4 - Going Concern
Note 4 - Going Concern | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 4 - Going Concern | NOTE 4 - GOING CONCERN As reported in the consolidated financial statements, the Company has an accumulated deficit and has had cash flow constraints with its current revenue stream. These trends have been consistent for the past few periods, respectively. These factors create uncertainty about the Company's ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital it could be forced to cease operations. In order to continue as a going concern, develop and generate revenues and achieve a profitable level of operations, the Company will need, among other things, additional capital resources. Management's plans to obtain such resources for the Company include raising additional capital through sales of common stock and entering into acquisition agreements with profitable entities with significant operations. In addition, management is continually seeking to streamline its operations and expand the business through a variety of industries, including real estate and financial management. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Note 5 - Earnings Per Share
Note 5 - Earnings Per Share | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 5 - Earnings Per Share | NOTE 5 - EARNINGS PER SHARE The following table sets forth the information used to compute basic and diluted net income per share attributable to the Company for the three months ended March 31, 2016: 3/31/2016 3/31/2015 Net Income (Loss) $(44,725) $(58,080) Weighted-average common shares outstanding basic: Weighted-average common stock - Basic 22,787,964 19,241,365 Equivalents Stock options - - Warrants - - Convertible notes, Preferred stock 2,400,000 7,400,000 Weighted-average common stock - Basic and Diluted 22,787,964 19,241,365 |
Note 6 - Property, Plant and Eq
Note 6 - Property, Plant and Equipment and Intangible Assets | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 6 - Property, Plant and Equipment and Intangible Assets | NOTE 6 - PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS For the Periods Ended: 3/31/2016 12/31/2015 Property, plant and equipment consist of the following: Equipment $21,074 $247,750 Computers and software 7,400 7,400 Other equipment 400 400 Less: disposal 0 (226,676) Total property, plant and equipment 28,874 28,874 Less: Accumulated depreciation 7,105 36,800 Current depreciation expense 5,150 5,105 Less: disposal 0 (34,800) Total accumulated depreciation 12,255 7,105 Net property, plant and equipment $16,619 $21,769 Intangible assets consist of: Goodwill $256,000 $256,000 Intangible assets 7,751,031 7,751,031 Less: Impairment 7,907,031 7,907,031 Net intangible assets $100,000 $100,000 Depreciation expense was $5,105 at December 31, 2015 and $20,600 at December 31, 2014. |
Note 7 - Related Party Transact
Note 7 - Related Party Transactions | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 7 - Related Party Transactions | NOTE 7 - RELATED PARTY TRANSACTIONS The Company pays $2,500 per month to a related party for office space and administrative services on a month-to-month basis. There are no long-term commitments pertaining to this arrangement. The Company agreed to set up short term notes payable to the board for unpaid fees during 2013 and the first quarter of 2014. A short term note was issued to Donna Steward for $3,750 and Charles Snipes for $1,500, Robert Anderson for $750, with a stated 8% interest rate. In addition the Company agreed to set a short term note payable to President Mike King for his 2013 and first quarter 2014 salary of $11,250 under the same terms. These liabilities were exchanged for stock during the third quarter of 2014. Our subsidiary, Texas Gulf Exploration & Production, Inc., has entered into a five year agreement whereby we have the right of first refusal to provide all wellhead services for all of Texas Gulf Oil & Gas, Inc. oil and or gas wells at cost plus 10% for such services. However, the value for such contract, as reported herein is only a potential future value and differ significantly as it is dependent on upon the future price of oil and the Company's ability to raise capital for the cost of providing services under the contract. Texas Gulf Oil & Gas, Inc. has a 60-day right of first refusal to invest funds in any new oil or gas leases that Texas Gulf Exploration & Production, Inc. locates and signs leases for. During the course of 2014 a related party has advanced $80,894 to Texas Gulf Exploration & Production, Inc. in the form of working capital advances. These loans are due on demand and carry no interest rate. This was increased to $128,116 during the first quarter of 2015. The Company paid off additional related party accrued liabilities through the issuance of 120,000 shares of our common stock valued at $33,400. |
Note 8 - Notes Payable
Note 8 - Notes Payable | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 8 - Notes Payable | NOTE 8 – NOTES PAYABLE Notes payable consist of the following for the periods ended; 3/31/2016 12/31/2015 Conventional convertible note issued as working capital advances during 2014 with an interest rate stated at 5%. This note is due September 30, 2015 and can be converted at $0.30 per share. 7,500 7,500 Conventional convertible note issued as working capital advances during 2014 with an interest rate stated at 5%. This note is due September 30, 2015 and can be converted at $0.30 per share. 7,500 7,500 Promissory note from a related party issued as working capital advances during 2014 with an interest rate stated at 0%. This note is due on demand. 95,942 95,942 Conventional convertible note issued as working capital advances during 2014 with an interest rate stated at 5%. This note is due May 10, 2016 and can be converted at $0.30 per share. 16,000 0 Conventional convertible note issued as working capital advances during 2014 with an interest rate stated at 5%. This note is due May 10, 2016 and can be converted at $0.30 per share. 16,000 0 Funds advanced from a related party issued for working capital during 2015 with an interest rate stated at 0%. This note is due on demand. 52,493 52,493 Promissory note from a related party issued as working capital advances during 2014 with an interest rate stated at 0%. This note is due on demand. 90,069 90,069 Total Notes Payable 285,884 253,504 Less Current Portion 285,884 253,504 Long Term Notes Payable $0 $0 All are classified as short term by the Company. Accrued interest on these notes totaled. $0 $0 |
Note 9 - Commitments and Contin
Note 9 - Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 9 - Commitments and Contingencies | NOTE 9 - COMMITMENTS AND CONTINGENCIES The company current has no commitments or contingencies that require reporting. |
Note 10 - Subsequent Events
Note 10 - Subsequent Events | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 10 - Subsequent Events | NOTE 10 – SUBSEQUENT EVENTS There were no reportable subsequent events. |
Note 11 - Acquisitions
Note 11 - Acquisitions | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 11 - Acquisitions | NOTE 11 - ACQUISITIONS On March 31, 2014, The Company's subsidiary Legal Capital Corp, acquired certain assets of Litigation Capital Corp. Also on March 31, 2014, the Company's subsidiary Texas Gulf Exploration & Production, Inc. acquired certain assets of Texas Gulf Oil and Gas Inc., The acquisitions were accounted for as business purchases and recorded at the estimated fair values of the net tangible and identifiable intangible assets acquired. The excess of the purchase price over the assets acquired was recorded as goodwill. Valuations generally were determined by an independent valuation expert and the acquisition of the key operating assets were audited as significant subsidiaries. The valuation of the assets acquired from Texas Gulf Oil & Gas, Inc. is based upon potential future earnings from the 5 year oil well servicing contract by and between our subsidiary, Texas Gulf Exploration & Production, Inc., and Texas Gulf Oil & Gas, Inc. The potential earnings are not guaranteed and could differ significantly due to the market price of crude oil and the inability of the Company to raise the capital necessary to sustain the operations of our subsidiary. Our Texas Gulf Oil & Gas, Inc. asset has recorded an impairment as more fully described in our fixed asset footnote. A summary of the purchase price, assets acquired and other information for each of these business purchases is as follows: Litigation Texas Capital Gulf Oil Corp. & Gas Assets Cash $45,727 $0 Intangible assets 256,000 7,751,031 Equipment 0 45,650 Total Assets Purchased $301,727 $7,796,681 Components of purchase price Series C Preferred $0 $7,722,650 Series B Preferred 300,727 0 Assumption of liabilities 1,000 74,031 Total purchase price $301,727 $7,796,681 These investments were reduced for an impairment charge of $6,665,887 in December of 2014 and an additional impairment charge of $1,241,144 in 2015 due to industry economic conditions reducing our carrying value to $100,000. |
Note 12 - Notes Receivable
Note 12 - Notes Receivable | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 12 - Notes Receivable | NOTE 12 - NOTES RECEIVABLE During December 2013 the company sold its working subsidiary Pipeline Nutrition, U.S.A. Inc. to a related party and extended the collection of a note receivable from December 31, 2013 until December 31, 2014 in exchange for increasing its current note to $135,000. In addition to extending the due date of the note the Company will receive an additional $165,000 in a long term note equaling $300,000 in total. $5,000 was received in February 2014, $130,000 is due in December 2014 and the balance of $160,000 is due at March 1, 2015. This note has an 8% stated interest rate payable upon maturity of the note. After notification from Pipeline Nutrition, U.S.A. that they were ceasing operations we have impaired this note for the full receivable of $295,000 for the three months ended March 31, 2016. |
Note 13 - Income Taxes
Note 13 - Income Taxes | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 13 - Income Taxes | NOTE 13 – INCOME TAXES The Company, a C-corporation, accounts for income taxes under ASC Topic 740 (SFAS No. 109) The Company adopted the provisions of FASB ASC 740-10 " Uncertainty in Income Taxes Currently the Company has projected $24,981,815 as of March 31, 2016 in Net Loss Operating Loss carry-forwards available. The benefits of the potential tax savings will be recognized in the financial statements upon the acquisition or development of revenue source to apply against these losses. The company recognizes that the Internal Revenue Service has the final determination of the NOL available going forward and that amount may be significantly different from that recorded to date. The net operating loss carry forwards for federal income tax purposes will expire between 2016 and 2033. Generally, these can be carried forward and applied against future taxable income at the tax rate applicable at that time. We are currently using a 35% effective tax rate for our projected available net operating loss carry-forward. However, as a result of potential stock offerings and stock issuance in connection with potential acquisitions, as well as the possibility of the Company not realizing its business plan objectives and having future taxable income to offset, the Company's use of these NOLs may be limited under the provisions of Section 382 of the Internal Revenue Code of 1986, as amended. The Company is in the process of evaluating the implications of Section 382 on its ability to utilize some or all of its NOLs. Components of Net Operating Loss and Valuation allowance are as follows: 3/31/2016 12/31/2015 Deferred tax assets: Beginning NOL Carryover $20,582,293 $20,537,568 Adjusted Taxable Income(loss) (3,547,594) (3,547,594) Valuation allowance 0 0 Ending NOL Carryover 24,129,887 24,085,162 Tax Benefit Carryforward 8,204,162 8,188,955 Valuation allowance (8,204,162) (8,188,955) Net deferred tax asset $0 $0 Net Valuation Allowance $(8,204,162) $(8,188,955 In accordance with FASB ASC 740 "Income Taxes", valuation allowances are provided against deferred tax assets, if based on the weight of available evidence, some or all of the deferred tax assets may or will not be realized. The Company has evaluated its ability to realize some or all of the deferred tax assets on its balance sheet and has established a valuation allowance in the amount of $8,204,162 at March 31, 2016 and 8,188,955 at December 31, 2015. |
Note 14 - Segment Information
Note 14 - Segment Information | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 14 - Segment Information | NOTE 14 - SEGMENT INFORMATION The accounting standards for reporting information about operating segments define operating segments as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company's chief operating decision maker is the Chief Executive Officer. The Company is organized by line of business. While the Chief Executive Officer evaluates results in a number of different ways, the line of business management structure is the primary basis for which the allocation of resources and financial results are assessed. Under the aforementioned criteria, the Company operates in two operating and reporting segments: metal purchasing, processing, recycling and selling, and used auto parts. The information provided below is obtained from internal information that is provided to the Company's chief operating decision maker for the purpose of corporate management. The Company uses operating income (loss) to measure segment performance. The Company does not allocate corporate interest income and expense, income taxes, other income and expenses related to corporate activity or corporate expense for management and administrative services that benefit both segments. In addition, the Company does not allocate restructuring charges to the segment operating income (loss) because management does not include this information in its measurement of the performance of the operating segments. Because of this unallocated income and expense, the operating income (loss) of each reporting segment does not reflect the operating income (loss) the reporting segment would report as a stand-alone business. The table below illustrates the Company's results by reporting segment for the three months ended March 31, 2016 and 2015: 3/31/2016 3/31/2015 Revenue Oil service operations 0 0 Litigation 0 0 Total Revenue 0 0 3/31/2016 3/31/2015 Cost of Sales Oil service operations 0 0 Litigation 0 0 Total Product Cost 0 0 3/31/2016 3/31/2015 Operating Cost Oil service operations 44,666 35,718 Litigation 0 12 Total Operating Cost 44,666 35,730 3/31/2016 3/31/2015 Net Operating Income(Loss) Oil service operations $(44,666) $(35,718) Litigation 0 (12) Total Net Operating Income(Loss) $(44,666) $(35,730) |
Note 15 - Investments
Note 15 - Investments | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 15 - Investments | NOTE 15 - INVESTMENTS On January 6, 2015, the Company entered into a Joint Venture Agreement with Wagley Offshore-Onshore, Inc. (the "JV Agreement" and "Wagley", respectively). The purpose of the JV Agreement is to pursue a distressed energy asset acquisition program to take advantage of the reduction in value of these assets due to the historically low price of crude oil. The Joint Venture, to be known as Wagley-EnergyTEK J.V. LLC, a Texas limited liability company (the "LLC"), will utilize the extensive relationships of Wagley to acquire energy related assets such as equipment leases and production in exchange for a combination of cash and/or equity securities of the Company. As a term and condition of the JV Agreement, the Company issued Twenty Million (20,000,000) restricted shares of its common stock to the Joint Venture as its capital contribution to the Joint Venture. The Company is valuing this investment at the fair market value of the stock issued on the date of the transaction. This investment was fully impaired charge due to industry economic conditions. |
Note 16 - Derivative Liability
Note 16 - Derivative Liability | 3 Months Ended |
Mar. 31, 2016 | |
Notes | |
Note 16 - Derivative Liability | NOTE 16 – DERIVATIVE LIABILITY The Company accounts for derivative financial instruments in accordance with ASC 815, which requires that all derivative financial instruments be recorded in the balance sheets either as assets or liabilities at fair value. The Company's derivative liability is an embedded derivative associated with the Company's convertible promissory note. The convertible promissory note was issued on January 14, 2015, (the "Note"), is a hybrid instruments which contain an embedded derivative feature which would individually warrant separate accounting as a derivative instrument under Paragraph 815-10-05-4. The embedded derivative feature includes the conversion feature to the Note. Pursuant to Paragraph 815-10-05-4, the value of the embedded derivative liability have been bifurcated from the debt host contract and recorded as a derivative liability resulting in a reduction of the initial carrying amount (as unamortized discount) of the notes, which are amortized as debt discount to be presented in other (income) expenses in the statements of operations using the effective interest method over the life of the notes. The embedded derivative within the note have been valued using the Black Scholes approach, recorded at fair value at the date of issuance; and marked-to-market at each reporting period end date with changes in fair value recorded in the Company's statements of operations as "change in the fair value of derivative instrument". As of March 31, 2016 and December 31, 2015, the estimated fair value of derivative liability was determined to be $0 and $0, respectively. On July 14, 2014, the derivative liability was recognized with a debt discount of $64,000. During the year ended December 31, 2015, amortization of $40,507 was recorded against the discount. The change in the fair value of derivative liabilities for the three months ended March 31, 2016 was $0 resulting in an aggregate gain on derivative liabilities of $0. Summary of Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis Financial assets and liabilities measured at fair value on a recurring basis are summarized below and disclosed on the balance sheets: Fair Value Measurement Using Carrying Value Level 1 Level 2 Level 3 Total Derivative liabilities on conversion feature - - - - - Total derivative liabilities $- $- $- $- $- Summary of the Changes in Fair Value of Level 3 Financial Liabilities The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended March 31, 2016: Derivative Liability Fair value, January 1, 2016 $- Additions - Change in fair value - Transfers in and/or out of Level 3 - Fair value, March 31, 2016 $- |
Note 2 - Significant Accounti22
Note 2 - Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Policies | |
Basis of Presentation | Basis of Presentation The Consolidated Financial Statements include the accounts of the Company and its majority-owned and wholly-owned subsidiaries. All significant intercompany account balances, transactions, profits and losses have been eliminated. |
Principles of Consolidation | Principles of Consolidation The financial statements include the accounts of the Company and its subsidiaries. Intercompany transactions and balances have been eliminated. Equity investments through which we exercise significant influence over but do not control the investee and are not the primary beneficiary of the investee's activities are accounted for using the equity method where applicable. Investments through which we are not able to exercise significant influence over the investee and which do not have readily determinable fair values are accounted for under the cost method where applicable. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments For certain of the Company's financial instruments, including cash and cash equivalents, accounts receivable, and accounts payable, the carrying amounts approximate fair value due to their short maturities. |
Revenue Recognition | Revenue Recognition The Company ASC No. 605 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the sales price is fixed or determinable, and (iii) collectability is reasonably assured. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash comprises cash in hand and cash held on demand with banks. The Company considers all highly liquid investments with original maturities of 90 days or less to be cash equivalents. Cash equivalents are carried at cost, which approximates market value. Cash and cash equivalents comprise of the non-interest bearing checking accounts in US Dollars. |
Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable represent amounts due from customers on product and other sales. These accounts receivable, which are reduced by an allowance for doubtful accounts, are recorded at the invoiced amount and do not bear interest. The Company evaluates the collectability of its accounts receivable based on a combination of factors, including whether sales were made pursuant to letters of credit. In cases where management is aware of circumstances that may impair a specific customer's ability to meet its financial obligations, management records a specific allowance against amounts due, and reduces the net recognized receivable to the amount the Company believes will be collected. For all other customers, the Company maintains an allowance that considers the total receivables outstanding, historical collection rates and economic trends. Accounts are written off when all efforts to collect have been exhausted. |
Stock Based Compensation | Stock Based Compensation When applicable, the Company will account for stock-based payments to employees in accordance with ASC 718, "Stock Compensation" ("ASC 718"). Stock-based payments to employees include grants of stock, grants of stock options and issuance of warrants that are recognized in the consolidated statement of operations based on their fair values at the date of grant. The Company accounts for stock-based payments to non-employees in accordance with ASC 505-50, "Equity-Based Payments to Non-Employees." Stock-based payments to non-employees include grants of stock, grants of stock options and issuances of warrants that are recognized in the consolidated statement of operations based on the value of the vested portion of the award over the requisite service period as measured at its then-current fair value as of each financial reporting date. The Company calculates the fair value of option grants and warrant issuances utilizing the Binomial pricing model. The amount of stock-based compensation recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest. ASC 718 requires forfeitures to be estimated at the time stock options are granted and warrants are issued to employees and non-employees, and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The term "forfeitures" is distinct from "cancellations" or "expirations" and represents only the unvested portion of the surrendered stock option or warrant. The Company estimates forfeiture rates for all unvested awards when calculating the expense for the period. In estimating the forfeiture rate, the Company monitors both stock option and warrant exercises as well as employee termination patterns. The resulting stock-based compensation expense for both employee and non-employee awards is generally recognized on a straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are recorded at cost less accumulated depreciation. Expenditures for major additions and improvements are capitalized. As property and equipment are sold or retired, the applicable cost and accumulated depreciation are removed from the accounts and any resulting gain or loss thereon is recognized as operating expenses. Depreciation is calculated using the straight-line method over the estimated useful lives or, in the case of leasehold improvements, the term of the related lease, including renewal periods, if shorter. Estimated useful lives are as follows: Buildings 40 years Equipment 5-15 years The Company reviews property, plant and equipment and all amortizable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Recoverability is based on estimated undiscounted cash flows. Measurement of the impairment loss, if any, is based on the difference between the carrying value and fair value. |
Impairment of Long-lived Assets and Amortizable Intangible Assets | Impairment of Long-Lived Assets and Amortizable Intangible Assets The Company follows ASC 360-10, "Property, Plant, and Equipment," "primary asset" |
Intangible Assets - Goodwill | Intangible Assets - Goodwill The excess of the purchase price over net tangible and identifiable intangible assets of business acquired is carried as Goodwill on the balance sheet. Goodwill is not amortized, but instead is assessed for impairment at least annually and upon the occurrence of certain triggering events or substantive changes in circumstances that indicate that the fair value of goodwill may be impaired. Measurement of the impairment loss, if any, is based on the difference between the carrying value and fair value of reporting unit. The goodwill impairment test follows a two-step process. In the first step, the fair value of a reporting unit is compared to its carrying value. If the carrying value of a reporting unit exceeds its fair value, the second step of the impairment test is performed for purposes of measuring the impairment. In the second step, the fair value of the reporting unit is allocated to all of the assets and liabilities of the reporting unit to determine an implied goodwill value. If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of goodwill, an impairment loss will be recognized in an amount equal to that excess. During the quarter ended the company did not recognized any impairment charges. |
Business Segments | Business segments ASC 280, "Segment Reporting" "management approach" |
Acquisitions | Acquisitions The Company recognizes the assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree at the acquisition date, measured at their fair values as of that date. Contingent purchase consideration is recorded at fair value at the date of acquisition. Any excess purchase price over the fair value of the net assets acquired is recorded as goodwill. Within one year from the date of acquisition, the Company may update the value allocated to the assets acquired and liabilities assumed and the resulting goodwill balances as a result of information received regarding the valuation of such assets and liabilities that was not available at the time of purchase. Measuring assets and liabilities at fair value requires the Company to determine the price that would be paid by a third party market participant based on the highest and best use of the assets or interests acquired. Acquisition costs are expensed as incurred. |
Fair Value Measurements | Fair Value Measurements For certain financial instruments, including accounts receivable, accounts payable, interest payable, advances payable and notes payable, the carrying amounts approximate fair value due to their relatively short maturities. On January 1, 2008, the Company adopted ASC 820-10, "Fair Value Measurements and Disclosures." Level 1 inputs to the valuation methodology are quoted prices 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 inputs to the valuation methodology are unobservable and significant to the fair value measurement. The Company did not identify any non-recurring assets and liabilities that are required to be presented in the balance sheets at fair value in accordance with ASC 815. In February 2007, the FASB issued ASC 825-10 "Financial Instruments." |
Income Taxes | Income Taxes Deferred income taxes are provided using the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry-forwards, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Applicable interest and penalties associated with unrecognized tax benefits are classified as additional income taxes in the statements of operations. |
Borrowings | Borrowings Borrowings are recognized initially at cost which is the fair value of the proceeds received, net of transaction costs incurred. In subsequent periods, borrowings are stated at amortized cost using the effective yield method; any difference between fair value of the proceeds (net of transaction costs) and the redemption amount is recognized as interest expense over the period of the borrowings. |
Provisions | Provisions Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. Where the Company expects a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The Company recognizes the estimated liability to repair or replace products sold still under warranty at the balance sheet date. This provision is calculated based on past history of the level of repairs and replacements. |
Legal Matters | Legal Matters The Company is not currently involved in any litigation and no reserves for litigation costs have been made at this time. |
Special Purpose Entities | Special Purpose Entities The Company does not have any off-balance sheet financing activities. |
Net Income Per Share | Net Income per Share The Company computes net income (loss) per share in accordance with ASC 260-10, "Earnings Per Share." "as if converted" |
Common Stock | Common Stock There is currently only one class of common stock. Each share common stock is entitled to one vote. The authorized number of common stock of the Company at December 31, 2015 was 500,000,000 shares with a par value per share of $0.001. Authorized shares that have been issued and fully paid amounted to 22,787,964 as of December 31, 2015 and 1,508,367 as of December 31, 2014. Our common authorized shares were increased on July 23, 2014 from 250,000,000 to 500,000,000. We also effectuated a 1 for 150 reverse stock split of our common stock on July 23, 2014. All our financial information in these statements have been adjusted to reflect that split. Preferred Stock On November 16, 2013, the Company's Board of Directors authorized the issuance of Preferred stock of 10,000,000 with a par value of $0.01 per share. The terms of these shares will be determined upon issuance; however, no shares were ever sold or issued. In March of 2014 the Company issued 900 shares of Series A Preferred Stock. Series A Preferred Stock shall have the right to convert any or all of the series of Series A Preferred Stock into Common Stock. Each share of Series A Preferred Stock shall be convertible at the option of the holder at any time, after the date of issuance of such shares. Each Series A Preferred Share converts into one hundred thousand (100,000) shares of Common Stock. On May 21, 2014, the 900 shares of Series A Preferred Stock were exchanged for 900 Shares of Series C Preferred Stock. Series C Stock shall have the right to convert any or all of the series of Series A Preferred Stock into Common Stock. Each share of Series C Preferred Stock shall be convertible at the option of the holder at any time, after the date of issuance of such shares. Each Series C Preferred Share converts into one hundred thousand (100,000) shares of Common Stock. Prior to January 1, 2016, in no event shall the number of Series C Preferred Stock or the number of shares of Common Stock into which the Series C Preferred Stock is convertible be subject to any adjustment resulting from a reverse split of the Common Stock. On all matters the holders of Series C Preferred Stock and the holders of Common Stock shall vote together and not as separate classes. Each holder of Series C Preferred Stock shall be entitled to one (1) vote for each share of series C Preferred Stock held. On January 9, 2015 10 Series C shares were exchanged for 1,000,000 shares of our Common Stock. In March of 2014 the Company issued 300,000 shares of Series B Preferred stock. The holders of Series B Preferred Stock shall be entitled to when and if declared by the Board of Directors out of the funds of the Company, non-cumulative cash dividends accruing on a daily basis from the date of issuance of the Series B Preferred Stock through and including the date on which dividends are paid at an annual rate of six percent (6%) per share of Series B Preferred Stock. |
Reclassifications | Reclassifications Certain reclassifications have been made to prior year balances to conform to the current year presentation. |
Comprehensive Income | Comprehensive Income Comprehensive income represents net income plus the change in equity of a business enterprise resulting from transactions and circumstances from non-owner sources. The Company's comprehensive income equal net income for the three months ended March 31, 2016, and 2015. |
Note 5 - Earnings Per Share (Ta
Note 5 - Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Tables/Schedules | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the information used to compute basic and diluted net income per share attributable to the Company for the three months ended March 31, 2016: 3/31/2016 3/31/2015 Net Income (Loss) $(44,725) $(58,080) Weighted-average common shares outstanding basic: Weighted-average common stock - Basic 22,787,964 19,241,365 Equivalents Stock options - - Warrants - - Convertible notes, Preferred stock 2,400,000 7,400,000 Weighted-average common stock - Basic and Diluted 22,787,964 19,241,365 |
Note 6 - Property, Plant and 24
Note 6 - Property, Plant and Equipment and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Tables/Schedules | |
Property, Plant and Equipment and Intangible Assets | For the Periods Ended: 3/31/2016 12/31/2015 Property, plant and equipment consist of the following: Equipment $21,074 $247,750 Computers and software 7,400 7,400 Other equipment 400 400 Less: disposal 0 (226,676) Total property, plant and equipment 28,874 28,874 Less: Accumulated depreciation 7,105 36,800 Current depreciation expense 5,150 5,105 Less: disposal 0 (34,800) Total accumulated depreciation 12,255 7,105 Net property, plant and equipment $16,619 $21,769 Intangible assets consist of: Goodwill $256,000 $256,000 Intangible assets 7,751,031 7,751,031 Less: Impairment 7,907,031 7,907,031 Net intangible assets $100,000 $100,000 Depreciation expense was $5,105 at December 31, 2015 and $20,600 at December 31, 2014. |
Note 8 - Notes Payable (Tables)
Note 8 - Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Tables/Schedules | |
Schedule of Notes Payable | Notes payable consist of the following for the periods ended; 3/31/2016 12/31/2015 Conventional convertible note issued as working capital advances during 2014 with an interest rate stated at 5%. This note is due September 30, 2015 and can be converted at $0.30 per share. 7,500 7,500 Conventional convertible note issued as working capital advances during 2014 with an interest rate stated at 5%. This note is due September 30, 2015 and can be converted at $0.30 per share. 7,500 7,500 Promissory note from a related party issued as working capital advances during 2014 with an interest rate stated at 0%. This note is due on demand. 95,942 95,942 Conventional convertible note issued as working capital advances during 2014 with an interest rate stated at 5%. This note is due May 10, 2016 and can be converted at $0.30 per share. 16,000 0 Conventional convertible note issued as working capital advances during 2014 with an interest rate stated at 5%. This note is due May 10, 2016 and can be converted at $0.30 per share. 16,000 0 Funds advanced from a related party issued for working capital during 2015 with an interest rate stated at 0%. This note is due on demand. 52,493 52,493 Promissory note from a related party issued as working capital advances during 2014 with an interest rate stated at 0%. This note is due on demand. 90,069 90,069 Total Notes Payable 285,884 253,504 Less Current Portion 285,884 253,504 Long Term Notes Payable $0 $0 All are classified as short term by the Company. Accrued interest on these notes totaled. $0 $0 |
Note 11 - Acquisitions (Tables)
Note 11 - Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Tables/Schedules | |
Schedule of Business Acquisitions, by Acquisition | Litigation Texas Capital Gulf Oil Corp. & Gas Assets Cash $45,727 $0 Intangible assets 256,000 7,751,031 Equipment 0 45,650 Total Assets Purchased $301,727 $7,796,681 Components of purchase price Series C Preferred $0 $7,722,650 Series B Preferred 300,727 0 Assumption of liabilities 1,000 74,031 Total purchase price $301,727 $7,796,681 |
Note 13 - Income Taxes (Tables)
Note 13 - Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Tables/Schedules | |
Summary of Valuation Allowance | 3/31/2016 12/31/2015 Deferred tax assets: Beginning NOL Carryover $20,582,293 $20,537,568 Adjusted Taxable Income(loss) (3,547,594) (3,547,594) Valuation allowance 0 0 Ending NOL Carryover 24,129,887 24,085,162 Tax Benefit Carryforward 8,204,162 8,188,955 Valuation allowance (8,204,162) (8,188,955) Net deferred tax asset $0 $0 Net Valuation Allowance $(8,204,162) $(8,188,955 |
Note 14 - Segment Information (
Note 14 - Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Tables/Schedules | |
Results by Reporting Segment | 3/31/2016 3/31/2015 Revenue Oil service operations 0 0 Litigation 0 0 Total Revenue 0 0 3/31/2016 3/31/2015 Cost of Sales Oil service operations 0 0 Litigation 0 0 Total Product Cost 0 0 3/31/2016 3/31/2015 Operating Cost Oil service operations 44,666 35,718 Litigation 0 12 Total Operating Cost 44,666 35,730 3/31/2016 3/31/2015 Net Operating Income(Loss) Oil service operations $(44,666) $(35,718) Litigation 0 (12) Total Net Operating Income(Loss) $(44,666) $(35,730) |
Note 16 - Derivative Liability
Note 16 - Derivative Liability (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Tables/Schedules | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Fair Value Measurement Using Carrying Value Level 1 Level 2 Level 3 Total Derivative liabilities on conversion feature - - - - - Total derivative liabilities $- $- $- $- $- |
Schedule of Derivative Liabilities at Fair Value | Derivative Liability Fair value, January 1, 2016 $- Additions - Change in fair value - Transfers in and/or out of Level 3 - Fair value, March 31, 2016 $- |
Note 2 - Significant Accounti30
Note 2 - Significant Accounting Policies: Property, Plant and Equipment (Details) | 3 Months Ended |
Mar. 31, 2016 | |
Building | |
Property, Plant and Equipment, Useful Life | 40 years |
Equipment | Minimum | |
Property, Plant and Equipment, Useful Life | 5 years |
Equipment | Maximum | |
Property, Plant and Equipment, Useful Life | 15 years |
Note 2 - Significant Accounti31
Note 2 - Significant Accounting Policies: Common Stock (Details) - $ / shares | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Jan. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2016 | Dec. 31, 2014 | Dec. 31, 2015 | Jul. 23, 2014 | |
Common Stock, shares authorized | 500,000,000 | 500,000,000 | 250,000,000 | |||
Common Stock, par or stated value | $ 0.001 | $ 0.001 | ||||
Common Stock, shares issued | 22,787,964 | 1,508,367 | 22,787,964 | |||
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 | ||||
Preferred Stock, Par Value | $ 0.01 | |||||
Series C Preferred Stock | ||||||
Preferred Stock, Par Value | 0.01 | $ 0.01 | ||||
Series B Preferred Stock | ||||||
Preferred Stock, Par Value | $ 0.01 | $ 0.01 | ||||
Series B Preferred Stock issued | 300,000 | |||||
Common Stock | ||||||
Stockholders' Equity, Reverse Stock Split | a 1 for 150 reverse stock split | |||||
Conversion of Stock, Shares Issued | 1,000,000 | |||||
Preferred Stock | Series A Preferred Stock | ||||||
Conversion of Stock, Shares Issued | 900 | |||||
Common Stock shares issued upon conversion of Preferred Shares | 100,000 | |||||
Conversion of Stock, Shares Converted | 900 | |||||
Preferred Stock | Series C Preferred Stock | ||||||
Conversion of Stock, Shares Issued | 900 | |||||
Common Stock shares issued upon conversion of Preferred Shares | 100,000 | |||||
Conversion of Stock, Shares Converted | 10 | |||||
Preferred Stock | Series B Preferred Stock | ||||||
Preferred Stock Annual Dividend Rate | 6.00% |
Note 5 - Earnings Per Share_ Sc
Note 5 - Earnings Per Share: Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Details | ||
Net Income (Loss) | $ (44,725) | $ (58,080) |
Weighted-average common shares outstanding basic: | ||
Weighted-average common stock - Basic | 22,787,964 | 19,241,365 |
Equivalents | ||
Stock Options | 0 | 0 |
Warrants | 0 | 0 |
Convertible notes, Preferred stock | 2,400,000 | 7,400,000 |
Weighted Average Number of Shares Outstanding, Diluted | 22,787,964 | 19,241,365 |
Note 6 - Property, Plant and 33
Note 6 - Property, Plant and Equipment and Intangible Assets: Property, Plant and Equipment and Intangible Assets (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Property, plant and equipment consist of the following: | |||
Total property, plant and equipment | $ 28,874 | $ 28,874 | |
Property, Plant and Equipment, Disposals | 0 | (226,676) | |
Accumulated depreciation | 7,105 | $ 36,800 | 36,800 |
Current depreciation expense | 5,150 | $ 5,150 | 5,105 |
Less: disposal | 0 | (34,800) | |
Total accumulated depreciation | 12,255 | 7,105 | |
Net property, plant and equipment | 16,619 | 21,769 | |
Intangible assets consist of: | |||
Goodwill | 256,000 | 256,000 | |
Intangible assets | 7,751,031 | 7,751,031 | |
Less: | |||
Impairment | 7,907,031 | 7,907,031 | |
Net intangible assets | 100,000 | 100,000 | |
Equipment | |||
Property, plant and equipment consist of the following: | |||
Total property, plant and equipment | 21,074 | 247,750 | |
Computers and software | |||
Property, plant and equipment consist of the following: | |||
Total property, plant and equipment | 7,400 | 7,400 | |
Other equipment | |||
Property, plant and equipment consist of the following: | |||
Total property, plant and equipment | $ 400 | $ 400 |
Note 7 - Related Party Transa34
Note 7 - Related Party Transactions (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Mar. 31, 2014 | |
Notes payable - related party | $ 142,562 | $ 142,562 | |||
Stated Interest Rate | 8.00% | ||||
Net additional funding by related party notes | 0 | $ 0 | |||
Debt Conversion, Original Debt, Amount | $ 33,400 | ||||
Common Stock | |||||
Debt Conversion, Converted Instrument, Shares Issued | 120,000 | ||||
Donna Steward | |||||
Notes payable - related party | $ 3,750 | ||||
Charles Snipes | |||||
Notes payable - related party | 1,500 | ||||
Robert Anderson | |||||
Notes payable - related party | 750 | ||||
Mike King | |||||
Notes payable - related party | $ 11,250 | ||||
Texas Gulf Exploration & Production Inc. | |||||
Service Fee | 10.00% | ||||
Director | |||||
Net additional funding by related party notes | $ 80,894 | ||||
Office Space and Administrative Services | |||||
Monthly payment amount | $ 2,500 | ||||
Working Capital Advance Loan | Director | |||||
Long-term Debt, Gross | $ 128,116 |
Note 8 - Notes Payable_ Schedul
Note 8 - Notes Payable: Schedule of Notes Payable (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2014 | |
Stated Interest Rate | 8.00% | ||
Accrued interest on these notes totaled | $ 0 | $ 0 | |
5% Convertible Note 1 | |||
Stated Interest Rate | 5.00% | ||
Debt Instrument, Convertible, Conversion Price | $ 0.30 | ||
Convertible Notes Payable | $ 7,500 | 7,500 | |
5% Convertible Note 2 | |||
Stated Interest Rate | 5.00% | ||
Debt Instrument, Convertible, Conversion Price | $ 0.30 | ||
Convertible Notes Payable | $ 7,500 | 7,500 | |
Working Capital Advances From Related Party | |||
Stated Interest Rate | 0.00% | ||
Convertible Notes Payable | $ 95,942 | 95,942 | |
Working Capital Advances From Related Party 4 | |||
Stated Interest Rate | 5.00% | ||
Debt Instrument, Convertible, Conversion Price | $ 0.30 | ||
Convertible Notes Payable | $ 16,000 | 0 | |
Debt Instrument, Maturity Date | May 10, 2016 | ||
Working Capital Advances From Related Party 5 | |||
Stated Interest Rate | 5.00% | ||
Debt Instrument, Convertible, Conversion Price | $ 0.30 | ||
Convertible Notes Payable | $ 16,000 | 0 | |
Debt Instrument, Maturity Date | May 10, 2016 | ||
Working Capital Advances From Related Party 2 | |||
Stated Interest Rate | 0.00% | ||
Convertible Notes Payable | $ 52,493 | 52,493 | |
Working Capital Advances From Related Party 3 | |||
Stated Interest Rate | 0.00% | ||
Convertible Notes Payable | $ 90,069 | $ 90,069 |
Note 11 - Acquisitions_ Schedul
Note 11 - Acquisitions: Schedule of Business Acquisitions, by Acquisition (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 |
Cash | $ 1,428 | $ 6,647 | $ 6,369 | $ 923 | |
Intangible assets | 100,000 | 100,000 | |||
Equipment | 16,619 | 21,769 | |||
Total Assets Purchased | 118,671 | 129,040 | |||
Components of purchase price: | |||||
Assumption of liabilities | $ 347,105 | $ 312,749 | |||
Litigation Capital Corp. | |||||
Cash | $ 45,727 | ||||
Intangible assets | 256,000 | ||||
Equipment | 0 | ||||
Total Assets Purchased | 301,727 | ||||
Components of purchase price: | |||||
Assumption of liabilities | 1,000 | ||||
Total purchase price | 301,727 | ||||
Litigation Capital Corp. | Preferred Stock | Series C Preferred Stock | |||||
Components of purchase price: | |||||
Preferred Stock | 0 | ||||
Litigation Capital Corp. | Preferred Stock | Series B Preferred Stock | |||||
Components of purchase price: | |||||
Preferred Stock | 300,727 | ||||
Texas Gulf Oil and Gas Inc. | |||||
Cash | 0 | ||||
Intangible assets | 7,751,031 | ||||
Equipment | 45,650 | ||||
Total Assets Purchased | 7,796,681 | ||||
Components of purchase price: | |||||
Assumption of liabilities | 74,031 | ||||
Total purchase price | 7,796,681 | ||||
Texas Gulf Oil and Gas Inc. | Preferred Stock | Series C Preferred Stock | |||||
Components of purchase price: | |||||
Preferred Stock | 7,722,650 | ||||
Texas Gulf Oil and Gas Inc. | Preferred Stock | Series B Preferred Stock | |||||
Components of purchase price: | |||||
Preferred Stock | $ 0 |
Note 11 - Acquisitions (Details
Note 11 - Acquisitions (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2016 | |
Details | |||
Impairment charge | $ 1,241,144 | $ 6,665,887 | |
Intangible assets | $ 100,000 | $ 100,000 |
Note 12 - Notes Receivable (Det
Note 12 - Notes Receivable (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Feb. 28, 2014 | Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2013 | |
Note Receivable, Current | $ 135,000 | ||||
Note Receivable, Non-Current, before collection of payment | 165,000 | ||||
Long-Term Note | $ 300,000 | ||||
Payments on notes receivable | $ 5,000 | $ 0 | $ 0 | ||
Note Receivable Current | 130,000 | ||||
Notes Receivable, Non-Current | $ 160,000 | ||||
Stated Interest Rate | 8.00% | ||||
Impairment of Note Receivable | $ 295,000 | ||||
Notes Receivable | |||||
Stated Interest Rate | 8.00% |
Note 13 - Income Taxes (Details
Note 13 - Income Taxes (Details) | 3 Months Ended |
Mar. 31, 2016 | |
Effective Income Tax Rate | 35.00% |
Minimum | |
Operating Loss Carryforwards, Expiration Date | Dec. 31, 2016 |
Maximum | |
Operating Loss Carryforwards, Expiration Date | Dec. 31, 2033 |
Note 13 - Income Taxes_ Summary
Note 13 - Income Taxes: Summary of Valuation Allowance (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Beginning NOL Carryover | $ 20,582,293 | $ 20,537,568 |
Adjusted Taxable Income (loss) | (3,547,594) | (3,547,594) |
Operating Loss Carryforwards, Valuation Allowance | 0 | 0 |
Ending NOL Carryover | 24,129,887 | 24,085,162 |
Tax Benefit Carryforward | 8,204,162 | 8,188,955 |
Valuation Allowance | (8,204,162) | (8,188,955) |
Net deferred tax asset | $ 0 | $ 0 |
Note 14 - Segment Information_
Note 14 - Segment Information: Results by Reporting Segment (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
REVENUES | $ 0 | $ 26,142 |
OPERATING EXPENSES | 44,666 | 37,633 |
Total Net Operating Income (Loss) | (44,666) | (36,176) |
Oil service operations | ||
REVENUES | 0 | 0 |
Total Cost of Sales | 0 | 0 |
OPERATING EXPENSES | 44,666 | 35,718 |
Total Net Operating Income (Loss) | (44,666) | (35,718) |
Litigation | ||
REVENUES | 0 | 0 |
Total Cost of Sales | 0 | 0 |
OPERATING EXPENSES | 0 | 12 |
Total Net Operating Income (Loss) | 0 | (12) |
Oil Service Operations and Litigation | ||
REVENUES | 0 | 0 |
Total Cost of Sales | 0 | 0 |
OPERATING EXPENSES | 44,666 | 35,730 |
Total Net Operating Income (Loss) | $ (44,666) | $ (35,730) |
Note 15 - Investments (Details)
Note 15 - Investments (Details) | 3 Months Ended |
Mar. 31, 2016shares | |
Common Stock | Wagley-EnergyTEK J.V. LLC | |
Series B Preferred Stock issued | 20,000,000 |
Note 16 - Derivative Liabilit43
Note 16 - Derivative Liability (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | Jul. 14, 2014 | |
Derivative liability, beginning balance | $ 0 | $ 0 | ||
Accretion debt discount | 0 | $ 18,887 | ||
Gain on derivative liability | 0 | $ 58,002 | ||
Embedded Derivative Financial Instruments | ||||
Debt Instrument, Unamortized Discount | $ 64,000 | |||
Accretion debt discount | $ 40,507 | |||
Change in fair value of derivative liabilities | 0 | |||
Gain on derivative liability | $ 0 |
Note 16 - Derivative Liability_
Note 16 - Derivative Liability: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Total derivative liabilities | $ 0 | $ 0 |
Fair Value, Inputs, Level 1 | ||
Total derivative liabilities | 0 | |
Fair Value, Inputs, Level 2 | ||
Total derivative liabilities | 0 | |
Fair Value, Inputs, Level 3 | ||
Total derivative liabilities | $ 0 |
Note 16 - Derivative Liabilit45
Note 16 - Derivative Liability: Schedule of Derivative Liabilities at Fair Value (Details) | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Details | |
Derivative liability, beginning balance | $ 0 |
Additions | 0 |
Change in fair value | 0 |
Transfers in and/or out of Level 3 | 0 |
Derivative liability, ending balance | $ 0 |