UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| x | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended May 31, 2016
| o | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from __________ to ____________
Commission File Number: 333-122009
SIBANNAC, INC.
(Exact Name of Registrant as Specified in its Charter)
| Nevada | 33-0903494 | |
|
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
1313 E. Osborn, Phoenix, AZ 85014
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number including area code: (480) 420-3171
| 9235 Bell Flower Way, Highlands Ranch, CO 80126 |
| Former name, former address, and former fiscal year, if changed since last report |
Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
| Larger accelerated filer | o | Accelerated filer | o | |
| Non-accelerated filer | o | Smaller reporting company | x |
Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 17,527,194 shares outstanding as of July 15, 2016.
SIBANNAC, INC.
FINANCIAL STATEMENTS
For the period ended
May 31, 2016
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SIBANNAC, INC.
BALANCE SHEETS
| (Unaudited) | (Audited) | |||||||
| May 31, 2016 | August 31, 2015 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | 15,904 | $ | 273,808 | ||||
| Accounts receivable | 90,816 | 1,000 | ||||||
| Accrued interest income receivable | 2,984 | – | ||||||
| Total Current Assets | 109,704 | 274,808 | ||||||
| Non current assets | ||||||||
| Intangible assets, net | 101,758 | 40,053 | ||||||
| Related party note receivable, net | 250,000 | 250,000 | ||||||
| Total Current Assets | 351,758 | 290,053.00 | ||||||
| TOTAL ASSETS | $ | 461,462 | $ | 564,861 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||
| Commitments and Contingencies | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued expenses | $ | 23,272 | $ | 2,476 | ||||
| Short term secured related party note payable, net | 6,525 | – | ||||||
| Note Payable-Sandbox, net | 16,250 | – | ||||||
| Note Payable, net | 270,864 | 254,195 | ||||||
| Total Current Liabilities | 316,911 | 256,671 | ||||||
| Non-current liabilities | ||||||||
| Put payable to a related party | 250,000 | 250,000 | ||||||
| Total Non-Current Liabilities | 250,000 | 250,000 | ||||||
| Total Liabilities | 566,911 | 506,671 | ||||||
| Stockholders' Equity after reorganization August 31, 2015 | ||||||||
| Preferred Stock, $0.001 par value, 10,000,000 shares authorized; 0 shares outstanding | – | – | ||||||
| Common Stock, $0.001 par value, 60,000,000 shares authorized; 17,527,194 and 17,527,194 shares issued and outstanding at May 31, 2016 and August 31, 2015 [note 4] | 17,528 | 17,528 | ||||||
| Additional paid-in capital, total reflect the balance after a deficit of $3,242,672 was eliminated through a quasi-reorganization [note 2] | 40,662 | 40,662 | ||||||
| Retained deficit, total reflect the balance after a deficit of $3,242,672 was eliminated through a quasi-reorganization [note 2] | (163,639 | ) | – | |||||
| Total Stockholders’ Equity (Deficit) | (105,449 | ) | 58,190 | |||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ | 461,462 | $ | 564,861 | ||||
The accompanying notes are an integral part of these financial statements
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SIBANNAC, INC.
STATEMENT OF OPERATIONS
For the Three and Nine Months Ended May 31, 2016 and 2015 (Unaudited)
| Three Months Ended May 31, | Nine Months Ended May 31, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Revenues | $ | 89,489 | $ | – | $ | 419,924 | $ | – | ||||||||
| Cost of Goods Sold (exclusive of depreciation, included in general & administrative expenses) | $ | 87,483 | $ | – | $ | 337,954 | $ | – | ||||||||
| Gross profit | $ | 2,006 | $ | – | $ | 81,970 | $ | – | ||||||||
| Selling expenses | $ | – | $ | – | $ | – | $ | – | ||||||||
| General and administrative expenses | ||||||||||||||||
| Other general and administrative expenses | 41,130 | 55,990 | 223,175 | 79,745 | ||||||||||||
| Total general and administrative expenses | $ | 41,130 | $ | 55,990 | $ | 223,175 | $ | 79,745 | ||||||||
| Net Profit/(Loss) from Operations | $ | (39,124 | ) | $ | (55,990 | ) | $ | (141,205 | ) | $ | (79,745 | ) | ||||
| Amortization Expense | 1,574 | – | 4,146 | – | ||||||||||||
| Interest Income | (1,002 | ) | (4 | ) | (3,125 | ) | (5 | ) | ||||||||
| Interest Expense | 9,341 | – | 21,413 | – | ||||||||||||
| Net Income/(Loss) | $ | (49,037 | ) | $ | (55,986 | ) | $ | (163,639 | ) | $ | (79,740 | ) | ||||
| Net Loss per share - basic and diluted | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.02 | ) | ||||
| Weighted average common shares outstanding - basic and diluted | 17,527,194 | 4,990,000 | 17,527,194 | 4,990,000 | ||||||||||||
The accompanying notes are an integral part of these unaudited financial statements
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SIBANNAC, INC.
STATEMENT OF CASH FLOWS
For the Nine Months Ended May 31, 2016 and 2015 (Unaudited)
| 2016 | 2015 | |||||||
| Operating Activities | ||||||||
| Net loss | $ | (163,639 | ) | $ | (79,740 | ) | ||
| Adjustments to reconcile net loss to net cash used in operations: | ||||||||
| Depreciation & Amortization | 4,146 | – | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts Receivable | (89,816 | ) | – | |||||
| Other Assets | (2,984 | ) | – | |||||
| Accounts Payable and accrued expenses | 20,796 | (63,219 | ) | |||||
| Other payables | – | (63,000 | ) | |||||
| Accrued interest on note payable | 16,669 | – | ||||||
| Net Cash (used in)/provided by operating activities | (214,828 | ) | (205,959 | ) | ||||
| Investing Activities | ||||||||
| Website development expenses | (65,851 | ) | – | |||||
| Loans Receivable | – | (60,000 | ) | |||||
| Net cash used in investing activities | (65,851 | ) | (60,000 | ) | ||||
| Financing Activities | ||||||||
| Proceeds from the sale of common stock | – | 617,500 | ||||||
| Proceeds from short term note payable secured by companies receivable | 22,775 | – | ||||||
| Net Cash provided by financing activities | 22,775 | 617,500 | ||||||
| Net Increase (Decrease) in cash | (257,904 | ) | 351,541 | |||||
| Cash, beginning of period | 273,808 | 63,000 | ||||||
| Cash, end of period | $ | 15,904 | $ | 414,541 | ||||
| Supplemental disclosures of cash flow information | ||||||||
| Cash paid for | ||||||||
| Interest | $ | – | $ | – | ||||
| Income taxes | $ | – | $ | – | ||||
The accompanying notes are an integral part of these unaudited financial statements
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SIBANNAC, INC.
NOTES TO THE (UNAUDITED) FINANCIAL STATEMENTS
NOTE 1 – BASIS OF PRESENTATION AND NATURE OF BUSINESS
Nature of Business
Between September 2000 and August 2014 the Company was in the business of selling nutritional and personal care products.
On August 25, 2014, the Company transferred all of its assets to Naprodis, Inc., a Colorado corporation (“Colorado Naprodis”). In consideration for the transfer of these assets, Colorado Naprodis agreed to assume a substantial amount of the Company’s liabilities. Colorado Naprodis is controlled by Paul Petit, who was the Company’s president prior to August 25, 2014.
As a result of the disposal of the Company’s old business, the Company now plans to provide a variety of services to licensed marijuana growers and dispensaries. The initial service offering will be various website marketing and professional employer organization sales.
At August 31, 2015 the Company completed the acquisition of two companies owned by related parties in return for the Company’s common stock. They acquired Protection Cost, Inc. for 2,300,000 shares of common stock and Apollo Media Network, Inc. for 4,500,000 shares.
Basis of Presentation
The financial statements presented include all adjustments which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the period presented in accordance with the accounting principles generally accepted in the United States of America. All adjustments are of a normal recurring nature.
These financial statements as of and for the quarter ended May 31, 2016 reflect all adjustments which, in the opinion of management, are necessary to fairly state the Company’s financial position and the results of its operations for the periods presented, in accordance with the accounting principles generally accepted in the United States of America. All adjustments are of a normal recurring nature.
The Company assumes that the users of the interim financial information herein have read, or have access to, the audited financial statements for the preceding period, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context.
NOTE 2 – CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Cash and Cash Equivalents – The Company considers all highly liquid instruments with an original maturity of three months or less to be cash equivalents. At certain times, cash in bank may exceed the amount covered by FDIC insurance. At May 31, 2016 and August 31, 2015 there were deposit balances in a United States bank of $15,904 and $273,808 respectively.
Fair Value of Financial Instruments
The Financial Accounting Standards Board issued ASC (Accounting Standards Codification) 820-10 (SFAS No. 157), “Fair Value Measurements and Disclosures” for financial assets and liabilities. ASC 820-10 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. FASB ASC 820-10 defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. FASB ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required by the standard that the Company uses to measure fair value:
Level 1: Quoted prices in active markets for identical assets or liabilities.
Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.
Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
As of May 31, 2016 all of the Company’s financial instruments are recorded at fair value.
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Accounts Receivable and concentration of credit risk – The Company extends unsecured credit to its customers in the ordinary course of business. Accounts receivable related to online media revenues is recorded at the time services are delivered and payment is reasonably assured. Online media revenues are generally collected from 30 to 60 days after the invoice is received. As of May 31, 2016 and August 31, 2015, the Company had accounts receivable of $90,816 and $1,000, respectively.
Intangible Assets – Intangible assets are comprised of websites, media content and intellectual property related to the websites acquired through the acquisition of Apollo Media Network, Inc. at historical cost. As the Company is in the online media business we expect that in most periods the company will invest capital in continuing to develop these assets. The total value of these assets as of May 31, 2016 increased to $101,758 from $40,053 on August 31, 2015. These balances are amortized over their estimated useful lives which the Company has determined ranges from three to seven years. Amortization from August 31, 2015 to May 31, 2016 was $4,146.
Note Receivable and Put Payable – As part of the acquisition of Apollo Media Network, Inc. the Company received a note receivable from the principal of Apollo Media Network, Inc., a related party, that is due at the payees’ discretion from two to nine years from formation on August 31, 2014. Resulting in a long term note receivable due to the company on August 31, 2015 to August 31, 2024. This loan accrues interest at a rate of 1.59% and is expected to be through the exercise of the related Put Option payable that was also established at the same time.
As part of the acquisition of Apollo Media Network, Inc. the Company issued a put option to repurchase 1,400,000 shares of common stock from the principal of Apollo Media Network, Inc. which is to be outstanding for the same period of time as the Note Receivable described above. The exercise price of the Put is stated as being the full satisfaction of the promissory note valued at $250,000.
The note receivable for $250,000 and the Put payable for $250,000 are linked to one another and will offset each other once the principal of Apollo Media Network, Inc. elects to exercise. Upon their exercise no cash will exchange hands but the asset and offsetting liability will be removed from the Companies records at that time.
Short term secured note payable – To meet short term operating capital needs the Company borrowed $50,000 from one of its board members on a short term basis guaranteed by the Companies accounts receivable. The interest charge in total is $5,000 for the term of the loan of which $3,250 was recognized as accrued interest in the current period and added to the loan balance. As of May 31, 2016 the Company had repaid $47,000 and currently owes $6,250 to fully repay the note and interest.
Note payable – sandbox, net – To meet short term operating capital needs the Company borrowed approximately $28,000 from an unrelated third party organization guaranteed by the Companies accounts receivable in May of 2016 for a flat fee of 3% of the amount borrowed. The net balance on this note to be repaid over the next 60 days as the receivables are collected is $16,250 at May 31, 2016.
Notes payable – As part of the acquisition of Apollo Media Networks, Inc. the company assumed liability for various notes payable due to four individual investors ranging from $5,000 to $64,000 principle amount. These notes have a stated interest rate of 5% except for one $30,000 note that bears interest at 40%. These notes matured at various times throughout 2015. The principle balance of all notes totaled $234,100 and accrued interest at August 31, 2015 was $20,095 for a total debt assumed of $254,195. At May 31, 2016 additional accrued interest of $16,669 was accrued resulting in total debt balance of $270,864.
The Company is currently in the process of negotiating terms with the noteholders to convert their notes into convertible notes that can be repaid through the issuance of the Company’s common stock. There is no guarantee that the company will be able to reach terms with investors to convert them into common stock. As of May 31, 2016 all of these notes were past due.
Quasi-Reorganization – During the fiscal year ended August 31, 2015 the Company’s’ shareholders approved a quasi-reorganization which has been reflected in the accompanying financial statements by an elimination of the accumulated deficit of $3,478,477 as of August 31, 2015, and a corresponding reduction of additional paid in capital. As part of the reorganization the Company evaluated its assets to determine if any needed to be written down to fair market value as a part of the reorganization. The Company determined that all assets were currently being carried at fair value and no adjustment in value was required.
Prior to the quasi-reorganization the Company had an intangible asset of $2,477,267 in goodwill related to the acquisitions of Protection Cost, Inc and Apollo Media Network, Inc. These balance were evaluated at year-end to determine if an impairment was necessary and due to the limited cash flow generated by these business entities management determined that this balance should be fully impaired resulting in a one-time impairment expense of $2,374,486 recorded in the August 31, 2015, fiscal year. The Company followed the guidance of FASB ASC 852-20 Quasi-reorganization in accounting for this transaction.
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Revenue Recognition - Revenue is generated from the sale of the company advertising space on the network of websites it owns and is recognized on an accrual basis as earned and collection is reasonably assured.
General & Administrative Expenses – General and administrative expense are comprised of all expenses not linked to the production or advertising of the Company’s services.
Loss per share - The Company computes net loss per common share in accordance with FASB ASC 260 (SFAS No. 128 “Earnings per Share” and SAB No. 98). Under the provisions of ASC 260, the basic net loss per common share is computed by dividing the net loss available to common stock outstanding during the period. Net loss per share on a diluted basis is computed by dividing the net loss for the period by the weighted average number of common and dilutive common stock equivalent shares outstanding during the period.
The Company has no potentially dilutive securities outstanding as of May 31, 2016 and August 31, 2015.
Recent Accounting Pronouncements - We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.
NOTE 3– GOING CONCERN
As shown in the financial statements, during the nine months May 31, 2016 the Company incurred a net loss from operations of $141,205 and during the quarter ended May 31, 2016 the Company incurred a loss from operation of $39,124. These factors create a substantial doubt regarding the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 4 – COMMON STOCK
On August 31, 2015 the Company completed the acquisition of 100% of the outstanding stock of Protection Cost Inc. in return for 2,300,000 shares of common stock.
On August 31, 2015 the Company completed the acquisition of 100% of the outstanding stock of Apollo Media Network, Inc. in return for 3,100,000 shares of common stock.
During the year ended August 31, 2015 the Company sold shares of its common stock to the persons, on the dates, in the amounts, and for the consideration shown below:
| Name | Date | Shares | Consideration | |||||||||
| Officer and Director | 11-12-14 | 5,000,000 | $ | 63,000 | (1) | |||||||
| Director | 11-12-14 | 5,000,000 | $ | 63,000 | ||||||||
| Unrelated third parties | various | 5,729,600 | $ | 617,500 | (2) | |||||||
__________________
| (1) | Payment was received in August 2014. |
| (2) | Payments were received between September 2014 and March 2015. |
On August 31, 2015 various officers and directors of the company returned 6,144,406 shares of common stock to the treasury for no consideration. These shares were canceled on August 31, 2015.
NOTE 5 – RELATED PARTY TRANSACTIONS
Both Protection Cost, Inc. and Apollo Media Network, Inc. were owned and managed by individuals who were either part of management or on the board of directors of the Company. At August 31, 2015 Mr. Kimerer resigned from the board and from the management of Sibannac, Inc. as part of the acquisition of Apollo.
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NOTE 6 – PROVISION FOR INCOME TAXES
The company utilizes FASB ASC 740, “Income Taxes” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established if it is more likely than not that some portion or all of the deferred tax asset will not be realized. The Company generated a deferred tax credit through net operating loss carry forwards. As of August 31, 2015 the Company had federal and state net operating loss carry forwards of approximately $777,000 ($644,000 in 2014) that can be used to offset future taxable income. The carry forwards will begin to expire in 2016 unless utilized in earlier years.
NOTE 7 – SUBSEQUENT EVENT
There were no financially material events subsequent to year end.
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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties and are based on the beliefs and assumptions of management and information currently available to management. The use of words such as “believes”, “expects”, “anticipates”, “intends”, “plans”, “estimates”, “should”, “likely” or similar expressions, indicates a forward-looking statement.
The identification in this report of factors that may affect our future performance and the accuracy of forward-looking statements is meant to be illustrative and by no means exhaustive. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
General
The Company was incorporated in Nevada in June 1999.
Between September 2000 and August 2014 the Company was in the business of selling nutritional and personal care products.
On August 25, 2014, the Company transferred all of its assets to Sibannac, Inc., a Colorado corporation (“Colorado Naprodis”). In consideration for the transfer of these assets, Colorado Naprodis agreed to assume a substantial amount of the Company’s liabilities. Colorado Naprodis is controlled by Paul Petit, who was the Company’s president prior to August 25, 2014.
Results of Operations
In the three month period ending May 31, 2016 the Company had revenue of $89,489 compared to $0 in the period ending May 31, 2015 as it began to execute its plan of operations. As it ramps up its operations it close to achieving gross revenue of $75,000 monthly in the month of February 2016. Provided the company has adequate operating capital, management expects that revenue from this source will continue to grow. Management expects that capital availability in the third quarter will result in higher revenues in the final quarter of 2016 fiscal year.
In the quarter ended May 31, 2015 the Company had no cost of goods sold. In the period ended May 31, 2016 and Company had cost of goods sold of $87,483. This resulted in an operating profit of $2,006. These costs generate significantly more revenue per dollar spent as the operations are scaled, as such, management expects that as Company revenues continue to grow operating profit margins will improve.
In the quarter ended May 31, 2016 and May 31, 2015 the Company had general and administrative expenses of $41,130 and $55,990, respectively. Management expects that as the companies continues to implement the business plan this expenses category will gradually increase as the Companies operations expand to manage the growing business.
Liquidity and Capital Resources
During year ended August 31, 2015 the Company received $617,500 from the sale of its common stock.
During the twelve months ending May 31, 2017 the Company estimates it will need approximately $500,000 to implement its business plan. Other than the foregoing, the Company does not know of any trends, events or uncertainties that have had, or are reasonably expected to have, a material impact on sales, revenues or income from continuing operations, or liquidity and capital resources.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
An evaluation was carried out under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report on Form 10-Q. Disclosure controls and procedures are procedures designed with the objective of ensuring that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, such as this Form 10-Q, is recorded, processed, summarized and reported, within the time period specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and is communicated to our management, including our Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on that evaluation, our management concluded that, as of February 28, 2015, our disclosure controls and procedures were not effective.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended August 31, 2015, that materially affected or are reasonably likely to materially affect our internal control over financial reporting.
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PART II
Item 6. Exhibits
a. Exhibits
| 31.1 | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 31.2 | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 32.1 | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 32.2 | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101.INS | XBRL Instance Document | |
| 101.SCH | XBRL Schema Document | |
| 101.CAL | XBRL Calculation Linkbase Document | |
| 101.DEF | XBRL Definition Linkbase Document | |
| 101.LAB | XBRL Labels Linkbase Document | |
| 101.PRE | XBRL Presentation Linkbase Document |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| SIBANNAC, INC. | ||
| Date: July 20, 2016 | By: | /s/ Rich Heineck |
| Rich Heineck, President, Principal Executive Officer | ||
| Date: July 20, 2016 | By: | /s/ Paul Dickman |
| Paul Dickman, Principle Financial and Accounting Officer | ||
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EXHIBIT 31.1
CERTIFICATION
I, Rich Heineck, certify that;
1. I have reviewed this quarterly report on Form 10-Q of Sibannac, Inc.;
2. Based on my knowledge, this report, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: July 20, 2016 | /s/ Rich Heineck | |
| Rich Heineck | ||
| Principal Executive Officer |
EXHIBIT 31.2
CERTIFICATION
I, Paul Dickman, certify that;
1. I have reviewed this quarterly report on Form 10-Q of Sibannac, Inc.;
2. Based on my knowledge, this report, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: July 20, 2016 | /s/ Paul Dickman | |
| Paul Dickman | ||
| Principal Financial Officer |
EXHIBIT 32.1
In connection with the quarterly report of Sibannac, Inc., (the “Company”) on Form 10-Q for the quarter ended May 31, 2016 as filed with the Securities Exchange Commission on the date hereof (the “Report”) Rich Heineck, the Principal Executive Officer of the Company, certifies pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company. | |
|
| Date: July 20, 2016 | /s/ Rich Heineck | |
| Rich Heineck | ||
| Principal Executive Officer |
EXHIBIT 32.2
In connection with the quarterly report of Sibannac, Inc., (the “Company”) on Form 10-Q for the quarter ended May 31, 2016 as filed with the Securities Exchange Commission on the date hereof (the “Report”) Paul Dickman, the Principal Financial Officer of the Company, certifies pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company. | |
| Date: July 20, 2016 | /s/ Paul Dickman | |
| Paul Dickman | ||
| Principal Financial Officer |
Document and Entity Information - shares |
9 Months Ended | |
|---|---|---|
May 31, 2016 |
Jul. 15, 2016 |
|
| Document And Entity Information | ||
| Entity Registrant Name | Sibannac, Inc. | |
| Entity Central Index Key | 0001313938 | |
| Document Type | 10-Q | |
| Document Period End Date | May 31, 2016 | |
| Amendment Flag | false | |
| Current Fiscal Year End Date | --08-31 | |
| 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 | 17,527,194 | |
| Document Fiscal Year Focus | 2016 | |
| Fiscal Period Focus | Q3 |
Balance Sheets (Parenthetical) - USD ($) |
May 31, 2016 |
Aug. 31, 2015 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Preferred Stock, Par Value | $ 0.001 | $ 0.001 |
| Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
| Preferred Stock, Shares Issued | 0 | 0 |
| Preferred Stock, Shares Outstanding | 0 | 0 |
| Common stock, par value | $ 0.001 | $ 0.001 |
| Common stock, shares authorized | 60,000,000 | 60,000,000 |
| Common stock, shares issued | 17,527,194 | 17,527,194 |
| Common stock, shares outstanding | 17,527,194 | 17,527,194 |
| Deficit eliminated through quasi-reorganization | $ (3,242,672) |
1. Basis of Presentation and Nature of Business |
9 Months Ended |
|---|---|
May 31, 2016 | |
| Accounting Policies [Abstract] | |
| Basis of Presentation and Nature of Business |
Nature of Business
Between September 2000 and August 2014 the Company was in the business of selling nutritional and personal care products.
On August 25, 2014, the Company transferred all of its assets to Naprodis, Inc., a Colorado corporation (“Colorado Naprodis”). In consideration for the transfer of these assets, Colorado Naprodis agreed to assume a substantial amount of the Company’s liabilities. Colorado Naprodis is controlled by Paul Petit, who was the Company’s president prior to August 25, 2014.
As a result of the disposal of the Company’s old business, the Company now plans to provide a variety of services to licensed marijuana growers and dispensaries. The initial service offering will be various website marketing and professional employer organization sales.
At August 31, 2015 the Company completed the acquisition of two companies owned by related parties in return for the Company’s common stock. They acquired Protection Cost, Inc. for 2,300,000 shares of common stock and Apollo Media Network, Inc. for 4,500,000 shares.
Basis of Presentation
The financial statements presented include all adjustments which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the period presented in accordance with the accounting principles generally accepted in the United States of America. All adjustments are of a normal recurring nature.
These financial statements as of and for the quarter ended May 31, 2016 reflect all adjustments which, in the opinion of management, are necessary to fairly state the Company’s financial position and the results of its operations for the periods presented, in accordance with the accounting principles generally accepted in the United States of America. All adjustments are of a normal recurring nature.
The Company assumes that the users of the interim financial information herein have read, or have access to, the audited financial statements for the preceding period, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. |
2. Critical Accounting Policies and Estimates |
9 Months Ended |
|---|---|
May 31, 2016 | |
| Accounting Policies [Abstract] | |
| Critical Accounting Policies and Estimates |
Cash and Cash Equivalents – The Company considers all highly liquid instruments with an original maturity of three months or less to be cash equivalents. At certain times, cash in bank may exceed the amount covered by FDIC insurance. At May 31, 2016 and August 31, 2015 there were deposit balances in a United States bank of $15,904 and $273,808 respectively.
Fair Value of Financial Instruments
The Financial Accounting Standards Board issued ASC (Accounting Standards Codification) 820-10 (SFAS No. 157), “Fair Value Measurements and Disclosures” for financial assets and liabilities. ASC 820-10 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. FASB ASC 820-10 defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. FASB ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required by the standard that the Company uses to measure fair value:
Level 1: Quoted prices in active markets for identical assets or liabilities.
Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.
Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. As of May 31, 2016 all of the Company’s financial instruments are recorded at fair value.
Accounts Receivable and concentration of credit risk – The Company extends unsecured credit to its customers in the ordinary course of business. Accounts receivable related to online media revenues is recorded at the time services are delivered and payment is reasonably assured. Online media revenues are generally collected from 30 to 60 days after the invoice is received. As of May 31, 2016 and August 31, 2015, the Company had accounts receivable of $90,816 and $1,000, respectively.
Intangible Assets – Intangible assets are comprised of websites, media content and intellectual property related to the websites acquired through the acquisition of Apollo Media Network, Inc. at historical cost. As the Company is in the online media business we expect that in most periods the company will invest capital in continuing to develop these assets. The total value of these assets as of May 31, 2016 increased to $101,758 from $40,053 on August 31, 2015. These balances are amortized over their estimated useful lives which the Company has determined ranges from three to seven years. Amortization from August 31, 2015 to May 31, 2016 was $4,146.
Note Receivable and Put Payable – As part of the acquisition of Apollo Media Network, Inc. the Company received a note receivable from the principal of Apollo Media Network, Inc., a related party, that is due at the payees’ discretion from two to nine years from formation on August 31, 2014. Resulting in a long term note receivable due to the company on August 31, 2015 to August 31, 2024. This loan accrues interest at a rate of 1.59% and is expected to be through the exercise of the related Put Option payable that was also established at the same time.
As part of the acquisition of Apollo Media Network, Inc. the Company issued a put option to repurchase 1,400,000 shares of common stock from the principal of Apollo Media Network, Inc. which is to be outstanding for the same period of time as the Note Receivable described above. The exercise price of the Put is stated as being the full satisfaction of the promissory note valued at $250,000.
The note receivable for $250,000 and the Put payable for $250,000 are linked to one another and will offset each other once the principal of Apollo Media Network, Inc. elects to exercise. Upon their exercise no cash will exchange hands but the asset and offsetting liability will be removed from the Companies records at that time.
Short term secured note payable – To meet short term operating capital needs the Company borrowed $50,000 from one of its board members on a short term basis guaranteed by the Companies accounts receivable. The interest charge in total is $5,000 for the term of the loan of which $3,250 was recognized as accrued interest in the current period and added to the loan balance. As of May 31, 2016 the Company had repaid $47,000 and currently owes $6,250 to fully repay the note and interest.
Note payable – sandbox, net – To meet short term operating capital needs the Company borrowed approximately $28,000 from an unrelated third party organization guaranteed by the Companies accounts receivable in May of 2016 for a flat fee of 3% of the amount borrowed. The net balance on this note to be repaid over the next 60 days as the receivables are collected is $16,250 at May 31, 2016.
Notes payable – As part of the acquisition of Apollo Media Networks, Inc. the company assumed liability for various notes payable due to four individual investors ranging from $5,000 to $64,000 principle amount. These notes have a stated interest rate of 5% except for one $30,000 note that bears interest at 40%. These notes matured at various times throughout 2015. The principle balance of all notes totaled $234,100 and accrued interest at August 31, 2015 was $20,095 for a total debt assumed of $254,195. At May 31, 2016 additional accrued interest of $16,669 was accrued resulting in total debt balance of $270,864.
The Company is currently in the process of negotiating terms with the noteholders to convert their notes into convertible notes that can be repaid through the issuance of the Company’s common stock. There is no guarantee that the company will be able to reach terms with investors to convert them into common stock. As of May 31, 2016 all of these notes were past due.
Quasi-Reorganization – During the fiscal year ended August 31, 2015 the Company’s’ shareholders approved a quasi-reorganization which has been reflected in the accompanying financial statements by an elimination of the accumulated deficit of $3,478,477 as of August 31, 2015, and a corresponding reduction of additional paid in capital. As part of the reorganization the Company evaluated its assets to determine if any needed to be written down to fair market value as a part of the reorganization. The Company determined that all assets were currently being carried at fair value and no adjustment in value was required.
Prior to the quasi-reorganization the Company had an intangible asset of $2,477,267 in goodwill related to the acquisitions of Protection Cost, Inc and Apollo Media Network, Inc. These balance were evaluated at year-end to determine if an impairment was necessary and due to the limited cash flow generated by these business entities management determined that this balance should be fully impaired resulting in a one-time impairment expense of $2,374,486 recorded in the August 31, 2015, fiscal year. The Company followed the guidance of FASB ASC 852-20 Quasi-reorganization in accounting for this transaction.
Revenue Recognition - Revenue is generated from the sale of the company advertising space on the network of websites it owns and is recognized on an accrual basis as earned and collection is reasonably assured.
General & Administrative Expenses – General and administrative expense are comprised of all expenses not linked to the production or advertising of the Company’s services.
Loss per share - The Company computes net loss per common share in accordance with FASB ASC 260 (SFAS No. 128 “Earnings per Share” and SAB No. 98). Under the provisions of ASC 260, the basic net loss per common share is computed by dividing the net loss available to common stock outstanding during the period. Net loss per share on a diluted basis is computed by dividing the net loss for the period by the weighted average number of common and dilutive common stock equivalent shares outstanding during the period.
The Company has no potentially dilutive securities outstanding as of May 31, 2016 and August 31, 2015.
Recent Accounting Pronouncements - We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow. |
3. Going Concern |
9 Months Ended |
|---|---|
May 31, 2016 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Going Concern |
As shown in the financial statements, during the nine months May 31, 2016 the Company incurred a net loss from operations of $141,205 and during the quarter ended May 31, 2016 the Company incurred a loss from operation of $39,124. These factors create a substantial doubt regarding the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
4. Common Stock |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
May 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock |
On August 31, 2015 the Company completed the acquisition of 100% of the outstanding stock of Protection Cost Inc. in return for 2,300,000 shares of common stock.
On August 31, 2015 the Company completed the acquisition of 100% of the outstanding stock of Apollo Media Network, Inc. in return for 3,100,000 shares of common stock.
During the year ended August 31, 2015 the Company sold shares of its common stock to the persons, on the dates, in the amounts, and for the consideration shown below:
__________________
On August 31, 2015 various officers and directors of the company returned 6,144,406 shares of common stock to the treasury for no consideration. These shares were canceled on August 31, 2015. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5. Related Party Transactions |
9 Months Ended |
|---|---|
May 31, 2016 | |
| Related Party Transactions [Abstract] | |
| Related Party Transactions |
Both Protection Cost, Inc. and Apollo Media Network, Inc. were owned and managed by individuals who were either part of management or on the board of directors of the Company. At August 31, 2015 Mr. Kimerer resigned from the board and from the management of Sibannac, Inc. as part of the acquisition of Apollo. |
6. Provision for Income Taxes |
9 Months Ended |
|---|---|
May 31, 2016 | |
| Income Tax Disclosure [Abstract] | |
| Provision for Income Taxes |
The company utilizes FASB ASC 740, “Income Taxes” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established if it is more likely than not that some portion or all of the deferred tax asset will not be realized. The Company generated a deferred tax credit through net operating loss carry forwards. As of August 31, 2015 the Company had federal and state net operating loss carry forwards of approximately $777,000 ($644,000 in 2014) that can be used to offset future taxable income. The carry forwards will begin to expire in 2016 unless utilized in earlier years. |
7. Subsequent Event |
9 Months Ended |
|---|---|
May 31, 2016 | |
| Subsequent Events [Abstract] | |
| Subsequent Event |
There were no financially material events subsequent to year end.
|
2. Critical Accounting Policies and Estimates (Policies) |
9 Months Ended |
|---|---|
May 31, 2016 | |
| Accounting Policies [Abstract] | |
| Cash and cash equivalents |
Cash and Cash Equivalents – The Company considers all highly liquid instruments with an original maturity of three months or less to be cash equivalents. At certain times, cash in bank may exceed the amount covered by FDIC insurance. At May 31, 2016 and August 31, 2015 there were deposit balances in a United States bank of $15,904 and $273,808 respectively. |
| Fair Value of Financial Instruments |
Fair Value of Financial Instruments
The Financial Accounting Standards Board issued ASC (Accounting Standards Codification) 820-10 (SFAS No. 157), “Fair Value Measurements and Disclosures” for financial assets and liabilities. ASC 820-10 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. FASB ASC 820-10 defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. FASB ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required by the standard that the Company uses to measure fair value:
Level 1: Quoted prices in active markets for identical assets or liabilities.
Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.
Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. As of May 31, 2016 all of the Company’s financial instruments are recorded at fair value. |
| Accounts Receivable and concentration of credit risk |
Accounts Receivable and concentration of credit risk – The Company extends unsecured credit to its customers in the ordinary course of business. Accounts receivable related to online media revenues is recorded at the time services are delivered and payment is reasonably assured. Online media revenues are generally collected from 30 to 60 days after the invoice is received. As of May 31, 2016 and August 31, 2015, the Company had accounts receivable of $90,816 and $1,000, respectively. |
| Intangible Assets |
Intangible Assets – Intangible assets are comprised of websites, media content and intellectual property related to the websites acquired through the acquisition of Apollo Media Network, Inc. at historical cost. As the Company is in the online media business we expect that in most periods the company will invest capital in continuing to develop these assets. The total value of these assets as of May 31, 2016 increased to $101,758 from $40,053 on August 31, 2015. These balances are amortized over their estimated useful lives which the Company has determined ranges from three to seven years. Amortization from August 31, 2015 to May 31, 2016 was $4,146. |
| Note Receivable and Put Payable |
Note Receivable and Put Payable – As part of the acquisition of Apollo Media Network, Inc. the Company received a note receivable from the principal of Apollo Media Network, Inc., a related party, that is due at the payees’ discretion from two to nine years from formation on August 31, 2014. Resulting in a long term note receivable due to the company on August 31, 2015 to August 31, 2024. This loan accrues interest at a rate of 1.59% and is expected to be through the exercise of the related Put Option payable that was also established at the same time.
As part of the acquisition of Apollo Media Network, Inc. the Company issued a put option to repurchase 1,400,000 shares of common stock from the principal of Apollo Media Network, Inc. which is to be outstanding for the same period of time as the Note Receivable described above. The exercise price of the Put is stated as being the full satisfaction of the promissory note valued at $250,000.
The note receivable for $250,000 and the Put payable for $250,000 are linked to one another and will offset each other once the principal of Apollo Media Network, Inc. elects to exercise. Upon their exercise no cash will exchange hands but the asset and offsetting liability will be removed from the Companies records at that time. |
| Short term secured note payable |
Short term secured note payable – To meet short term operating capital needs the Company borrowed $50,000 from one of its board members on a short term basis guaranteed by the Companies accounts receivable. The interest charge in total is $5,000 for the term of the loan of which $3,250 was recognized as accrued interest in the current period and added to the loan balance. As of May 31, 2016 the Company had repaid $47,000 and currently owes $6,250 to fully repay the note and interest.
|
| Notes payable |
Note payable – Sandbox, net – To meet short term operating capital needs the Company borrowed approximately $28,000 from an unrelated third party organization guaranteed by the Companies accounts receivable in May of 2016 for a flat fee of 3% of the amount borrowed. The net balance on this note to be repaid over the next 60 days as the receivables are collected is $16,250 at May 31, 2016.
Notes payable – As part of the acquisition of Apollo Media Networks, Inc. the company assumed liability for various notes payable due to four individual investors ranging from $5,000 to $64,000 principle amount. These notes have a stated interest rate of 5% except for one $30,000 note that bears interest at 40%. These notes matured at various times throughout 2015. The principle balance of all notes totaled $234,100 and accrued interest at August 31, 2015 was $20,095 for a total debt assumed of $254,195. At May 31, 2016 additional accrued interest of $16,669 was accrued resulting in total debt balance of $270,864.
The Company is currently in the process of negotiating terms with the noteholders to convert their notes into convertible notes that can be repaid through the issuance of the Company’s common stock. There is no guarantee that the company will be able to reach terms with investors to convert them into common stock. As of May 31, 2016 all of these notes were past due. |
| Quasi-Reorganization |
Quasi-Reorganization – During the fiscal year ended August 31, 2015 the Company’s’ shareholders approved a quasi-reorganization which has been reflected in the accompanying financial statements by an elimination of the accumulated deficit of $3,478,477 as of August 31, 2015, and a corresponding reduction of additional paid in capital. As part of the reorganization the Company evaluated its assets to determine if any needed to be written down to fair market value as a part of the reorganization. The Company determined that all assets were currently being carried at fair value and no adjustment in value was required.
Prior to the quasi-reorganization the Company had an intangible asset of $2,477,267 in goodwill related to the acquisitions of Protection Cost, Inc and Apollo Media Network, Inc. These balance were evaluated at year-end to determine if an impairment was necessary and due to the limited cash flow generated by these business entities management determined that this balance should be fully impaired resulting in a one-time impairment expense of $2,374,486 recorded in the August 31, 2015, fiscal year. The Company followed the guidance of FASB ASC 852-20 Quasi-reorganization in accounting for this transaction. |
| Revenue Recognition |
Revenue Recognition - Revenue is generated from the sale of the company advertising space on the network of websites it owns and is recognized on an accrual basis as earned and collection is reasonably assured. |
| General and Administrative Expenses |
General & Administrative Expenses – General and administrative expense are comprised of all expenses not linked to the production or advertising of the Company’s services. |
| Loss per Share |
Loss per share - The Company computes net loss per common share in accordance with FASB ASC 260 (SFAS No. 128 “Earnings per Share” and SAB No. 98). Under the provisions of ASC 260, the basic net loss per common share is computed by dividing the net loss available to common stock outstanding during the period. Net loss per share on a diluted basis is computed by dividing the net loss for the period by the weighted average number of common and dilutive common stock equivalent shares outstanding during the period.
The Company has no potentially dilutive securities outstanding as of May 31, 2016 and August 31, 2015. |
| Recent Accounting Pronouncements |
Recent Accounting Pronouncements - We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow. |
4. Common Stock (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
May 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of stock sold |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
2. Critical Accounting Policies and Estimates (Details Narrative) - USD ($) |
3 Months Ended | 9 Months Ended | ||||
|---|---|---|---|---|---|---|
May 31, 2016 |
May 31, 2015 |
May 31, 2016 |
May 31, 2015 |
Aug. 31, 2015 |
Aug. 31, 2014 |
|
| Cash | $ 15,904 | $ 414,541 | $ 15,904 | $ 414,541 | $ 273,808 | $ 63,000 |
| Accounts receivable | 90,816 | 90,816 | 1,000 | |||
| Intangible assets | 101,758 | 101,758 | 40,053 | |||
| Amortization expense | 1,574 | 0 | 4,146 | 0 | ||
| Note receivable | 250,000 | $ 250,000 | 250,000 | |||
| Note receivable interest rate | 1.59% | |||||
| Put payable | 250,000 | $ 250,000 | 250,000 | |||
| Intangible asset, gross | $ 2,477,267 | |||||
| Impairment of intangible asset | 2,374,486 | |||||
| Potentially dilutive securities | 0 | |||||
| Secured Note Payable [Member] | ||||||
| Notes payable | 6,250 | $ 6,250 | ||||
| Accrued interest | 3,250 | 3,250 | ||||
| Proceeds from notes payable | 50,000 | |||||
| Repayments of notes payable | 47,000 | |||||
| Sandbox [Member] | ||||||
| Proceeds from notes payable | 28,000 | |||||
| Various [Member] | ||||||
| Notes payable | 270,864 | 254,195 | 270,864 | 254,195 | ||
| Accrued interest | $ 36,764 | $ 20,095 | $ 36,764 | $ 20,095 | ||
| Minimum [Member] | ||||||
| Estimated useful lives of intangible assets | 3 years | |||||
| Maximum [Member] | ||||||
| Estimated useful lives of intangible assets | 7 years | |||||
3. Going Concern (Details Narrative) - USD ($) |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
May 31, 2016 |
May 31, 2015 |
May 31, 2016 |
May 31, 2015 |
|
| Going Concern Details Narrative | ||||
| Loss from operations | $ (39,124) | $ (55,990) | $ (141,205) | $ (79,745) |
4. Common Stock (Details) |
12 Months Ended |
|---|---|
|
Aug. 31, 2015
USD ($)
shares
| |
| Protection Cost Inc. | |
| Equity interest owned | 100.00% |
| Stock issued for acquisition, shares | 2,300,000 |
| Apollo Media Network, Inc. | |
| Equity interest owned | 100.00% |
| Stock issued for acquisition, shares | 3,100,000 |
| Officer and Director | |
| Stock issued for cash, shares | 5,000,000 |
| Stock issued for cash, amount | $ | $ 63,000 |
| Director | |
| Stock issued for cash, shares | 5,000,000 |
| Stock issued for cash, amount | $ | $ 63,000 |
| Shares returned to treasury | 6,144,406 |
| Unrelated third party | |
| Stock issued for cash, shares | 5,729,600 |
| Stock issued for cash, amount | $ | $ 617,500 |
6. Provision for Income Taxes (Details Narrative) - USD ($) |
9 Months Ended | ||
|---|---|---|---|
May 31, 2016 |
Aug. 31, 2015 |
Aug. 31, 2014 |
|
| Income Tax Disclosure [Abstract] | |||
| Federal and state operating loss carryforwards | $ 777,000 | $ 644,000 | |
| Carryforward beginning expiration date | Dec. 31, 2016 |
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