ASSET PURCHASE AND INTANGIBLE ASSET

3 Months Ended

Mar. 31, 2015

ASSET PURCHASE AND INTANGIBLE ASSET [Abstract]

ASSET PURCHASE AND INTANGIBLE ASSET

NOTE 4-ASSET PURCHASE AND INTANGIBLE ASSET

On December 27, 2013, the Company entered into a patent acquisition agreement (the "Purchase Agreement"), by and among Soleil and Guocheng "Greg" Pan, a natural person, pursuant to which Soleil agreed to purchase certain electronic cigarette patents owned and invented by Mr. Pan (the "Purchased Assets"). Under the terms of the Purchase Agreement and in consideration for the acquisition of the Purchased assets, Soleil issued to Mr. Pan (and certain of his designees) 10,501,700 common units representing limited partnership units of Soleil and a warrant to purchase 2,000,000 common units representing limited partnership units of Soleil. The warrants entitle Mr. Pan (or his designees) to purchase Soleil common units at $0.15 per common unit with an expiration date ten years from the effective date of the Purchase Agreement. The company accounted for the acquisition in accordance with ASC 805-50-15 as an acquisition of assets rather than a business.

Patents were valued based on a certified appraisal received by the Company. The Company took into consideration the appraisal, number of shares issued, warrants issued, valuation of the traded stock at the time of issuance and similar patents sold during the year. Based on these assumptions the Company has valued the assets purchased at approximately $5.5 million at the time of purchase. During the year ended December 31, 2014 the Company determined due to lack of sales and projected sales and completion in the industry the value of the patent should be significantly reduced. As a result the Company has written off the entire patent.