0001477932-16-010545.txt : 20160523 0001477932-16-010545.hdr.sgml : 20160523 20160523133615 ACCESSION NUMBER: 0001477932-16-010545 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 41 CONFORMED PERIOD OF REPORT: 20151231 FILED AS OF DATE: 20160523 DATE AS OF CHANGE: 20160523 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Hemcare Health Services Inc. CENTRAL INDEX KEY: 0001420368 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PERSONAL SERVICES [7200] IRS NUMBER: 208248213 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-148546 FILM NUMBER: 161668515 BUSINESS ADDRESS: STREET 1: 4830 W. KENNEDY BLVD. STREET 2: SUITE 600 CITY: TAMPA STATE: FL ZIP: 33609 BUSINESS PHONE: (844) 44362273 MAIL ADDRESS: STREET 1: 4830 W. KENNEDY BLVD. STREET 2: SUITE 600 CITY: TAMPA STATE: FL ZIP: 33609 FORMER COMPANY: FORMER CONFORMED NAME: NSU Resources Inc DATE OF NAME CHANGE: 20140508 FORMER COMPANY: FORMER CONFORMED NAME: Bio-Carbon Solutions International Inc. DATE OF NAME CHANGE: 20110311 FORMER COMPANY: FORMER CONFORMED NAME: Elemental Protective Coating Corp. DATE OF NAME CHANGE: 20100121 10-K 1 hcre_10k.htm FORM 10-K hcre_10k.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

  

FORM 10-K

 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015

 

Commission File Number: 333-148546

  

HEMCARE HEALTH SERVICES INC.

(FORMERLY NSU RESOURCES INC)

(Exact name of registrant as specified in its charter)

 

NEVADA

20-8248213

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

 

4830 W. Kennedy Blvd., Suite 600, Tampa, FL 33609

(Address of principal executive offices, including zip code)

 

(844) 4-HEMCARE, (844) 4-436-2273

(Registrant's telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

None

 

Title of class

Name of each exchange on which registered

Common Stock. $0.001 par value per share

None

 

Securities registered pursuant to Section 12(g) of the Act: 

Common Stock, $0.001 par value per share

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in 405 of the Securities Act. Yes o No x

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes x No o

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

 

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 the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

¨

Smaller Reporting Company

x

(Do not check if smaller reporting company)

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

 

As of May 23, 2016 the issuer had 142,162,211 shares of common stock issued and 141,782,211 shares of common stock outstanding.

 

 


 

INDEX

HEMCARE HEALTH SERVICES, INC.

(FORMERLY NSU RESOURCES INC)

 

PAGE NO

PART I

ITEM 1

BUSINESS

3

ITEM 1A

RISK FACTORS

4

ITEM 1B

UNRESOLVED STAFF COMMENTS

8

ITEM 2

PROPERTIES

8

ITEM 3

LEGAL PROCEEDINGS

8

ITEM 4

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

8

PART II

ITEM 5

MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

9

ITEM 6

SELECTED FINANCIAL DATA

9

ITEM 7

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

10

ITEM 7A

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

11

ITEM 8

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

11

ITEM 9

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

11

ITEM 9A(T)

CONTROLS AND PROCEDURES

11

ITEM 9B

OTHER INFORMATION

13

PART III

ITEM 10

DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

14

ITEM 11

EXECUTIVE COMPENSATION

15

 

ITEM 12

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

16

ITEM 13

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

16

ITEM 14

PRINCIPAL ACCOUNTANT FEES AND SERVICES

16

 

 

PART IV

ITEM 15

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

17

SIGNATURES

18

 

 
2
 

 

PART I.

 

Cautionary Note

 

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are subject to a number of risks and uncertainties. All statements that are not historical facts are forward-looking statements, including statements about our business strategy, the effect of Generally Accepted Accounting Principles ("GAAP") pronouncements, uncertainty regarding our future operating results and our profitability, anticipated sources of funds and all plans, objectives, expectations and intentions and the statements regarding future potential revenue, gross margins and our prospects for fiscal 2009. These statements appear in a number of places and can be identified by the use of forward-looking terminology such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "future," "intend," or "certain" or the negative of these terms or other variations or comparable terminology, or by discussions of strategy.

 

Actual results may vary materially from those in such forward-looking statements as a result of various factors that are identified in "Item 1A.—Risk Factors" and elsewhere in this document. No assurance can be given that the risk factors described in this Annual Report on Form 10-K are all of the factors that could cause actual results to vary materially from the forward-looking statements.  References in this Annual Report on Form 10-K to (i) the "Company," the "Registrant," "Hemcare Health Services" "we," "our," "HCRE," and "us" refer to Hemcare Health Services, Inc. (formerly NSU Resrouces, Inc.).

 

Investors and security holders may obtain a free copy of the Annual Report on Form 10-K and other documents filed by Hemcare Health Services Inc. with the Securities and Exchange Commission ("SEC") at the SEC's website at http://www.sec.gov. Free copies of the Annual Report on Form 10-K and other documents filed by Hemcare Health Services Inc. with the SEC may also be obtained from Hemcare Health Services Inc. by directing a request to Hemcare Health Services Inc., Attention: John Wilkes 3800 Paddock Road, R.R. #5, Claremont, Ontario, Canada L1Y 1A2.

 

ITEM 1

BUSINESS.

 

General

 

Hemcare Health Services Inc. (formerly NSU Resources Inc) ("The Company") was incorporated on January 17, 2007, under the laws of the State of Nevada.  The principal offices are located at 4830 W. Kennedy Blvd., Suite 600, Tampa, FL 33609. The telephone number is (844) 4-436-2273.  The Company has never declared bankruptcy, it has never been in receivership, and it has never been involved in any legal action or proceedings.  Our fiscal year end is December 31.

 

Description of Business

 

The Company's business plan and objective is to focus on hemorrhoid medical procedures for which it entered into a license agreement to open hemorrhoid treatment centers and promote the Ultroid Hemorrhoid System globally.

 

Employees

 

Currently there are no employees of the Company; however, several other employees will be needed to implement the Company's business plan.  

 

 
3
 

 

Research and Development Expenditures

 

Since the time of our incorporation we have not incurred any research or development expenditures.

 

Business Strategy

 

During the second quarter of 2014, the Company exited the Rare Earth Elements business. As part of this exit, the Company assigned the exclusive license issued from 1776729 Ontario Corporation, a related party, for rare earth extraction and carbon credit technologies to its former officer for $100, thus terminating the Company's license in the technologies. Additionally, a full and mutual release was signed by the Company and Great Rock Development Corp. pertaining to the rare earth extraction technology use as described in the Company's Form 8K filed on April 29, 2013.

 

On June 29, 2014 the Company was granted the perpetual exclusive rights to the use of Optimum Performance (a proprietary formulation of a highly potent all-in-one daily feed supplement for the Horse industry. In consideration for the assignment of these rights, the Company will pay a gross sales royalty of 1.5% on future sales and agreed to pre-pay royalties by the issuance of 120,000 Preferred Series A 12% Convertible shares to 2412151 Ontario Limited.

 

During the year ended December 31, 2015, the Company shifted its business focus to hemorrhoid medical procedures and entered into a license agreement to open hemorrhoid treatment centers and promote the Ultroid Hemorrhoid System globally. In consideration for the transfer of these rights to the Company, it issued 100,000 shares of series A preferred convertible stock.

 

Reports to Security Holders

 

We file our quarterly and annual report with the Securities and Exchange Commission (SEC), which the public may view and copy at the Public Reference Room at 100 F Street, N.E. Washington D.C. 20549.  SEC filings, including supplemental schedule and exhibits, can also be accessed free of charge through the SEC website www.sec.gov.

 

ITEM 1A

RISK FACTORS

 

Factors Affecting Future Operating Results

 

This Annual Report on Form 10-K contains forward-looking statements concerning our future programs, expenses, revenue, liquidity and cash needs as well as our plans and strategies. These forward-looking statements are based on current expectations and we assume no obligation to update this information, except as required by applicable laws and regulations. Numerous factors could cause actual results to differ significantly from the results described in these forward-looking statements, including the following risk factors.

 

Because our auditors have issued a going concern opinion, there is substantial uncertainty we will continue activities in which case you could lose your investment.

 

Our auditors have issued a going concern opinion. This means that there is substantial doubt that we can continue as an ongoing business for the next twelve months. As such we may have to cease activities and you could lose your investment.

 

 
4
 

 

We currently do not have adequate funds to cover the costs associated with maintaining our status as a Reporting Company.

 

The Company currently has no cash available.  This amount will not be enough to pay the legal, accounting, and filing fees that is required to maintain our status as a reporting company, which is currently estimated at $20,000 for fiscal year 2016.  If we can no longer be a reporting company our common stock would no longer be eligible for quotation on the Over-the-Counter Bulletin Board.  This would result in there being no public market for an investor to trade our common stock and any investment made would be lost in its entirety.

  

We lack an operating history and have losses which we expect to continue into the future. As a result, we may have to suspend or cease activities, which would result in a complete loss of any investment made into the Company.

 

We were incorporated on January 17, 2007 and we have not started our proposed business activities or realized any revenues. We have no operating history upon which an evaluation of our future success or failure can be made. As of December 31, 2015 our net loss since inception is $3,254,352.  Based upon current plans, we expect to incur operating losses in future periods. Failure to generate revenues will cause us to suspend or cease activities.

 

If we are able to complete financing through the sale of additional shares of our common stock in the future, then shareholders will experience dilution.

 

The most likely source of future financing presently available to us is through the sale of shares of our common stock. Any sale of common stock will result in dilution of equity ownership to existing shareholders. This means that if we sell shares of our common stock, more shares will be outstanding and each existing shareholder will own a smaller percentage of the shares then outstanding. To raise additional capital we may have to issue additional shares, which may substantially dilute the interests of existing shareholders. Alternatively, we may have to borrow large sums, and assume debt obligations that require us to make substantial interest and capital payments.

 

Because there is currently a limited public trading market for our common stock, you may not be able to resell your stock.

 

Although our common stock is quoted on the Over-the-Counter Bulletin Board (OTCBB) the market is limited. If a market does not develop there would be no central place, such as stock exchange or electronic trading system to resell your shares.

 

Because our securities are subject to penny stock rules, you may have difficulty reselling your shares.

 

Our shares are penny stocks are covered by, and subject to, section 15(g) of the Securities Exchange Act of 1934 which imposes additional sales practice requirements on broker/dealers who sell the Company's securities including the delivery of a standardized disclosure document; disclosure and confirmation of quotation prices; disclosure of compensation the broker/dealer receives; and, furnishing monthly account statements. For sales of our securities, the broker/dealer must make a special suitability determination and receive from its customer a written agreement prior to making a sale. The imposition of the foregoing additional sales practices could adversely affect a shareholder's ability to dispose of his stock.

 

 
5
 

 

We are subject to the requirements of section 404 of the Sarbanes-Oxley Act. If we are unable to timely comply with section 404 or if the costs related to compliance are significant, our profitability, stock price and results of operations and financial condition could be materially adversely affected.

 

We are required to comply with the provisions of Section 404 of the Sarbanes-Oxley Act of 2002, which require us to maintain an ongoing evaluation and integration of the internal controls of our business. We were required to document and test our internal controls and certify that we are responsible for maintaining an adequate system of internal control procedures for the year ended December 31, 2015.

 

We evaluated our existing controls for the year ended December 31, 2015. Our Chief Executive Officer identified material weaknesses, specifically a poor segregation of duties, in our internal control over financial reporting and determined that we did not maintain effective internal control over financial reporting as of December 31, 2015. The identified material weaknesses did not result in material audit adjustments to our 2015 financial statements; however, uncured material weaknesses could negatively impact our financial statements for subsequent years.

 

In addition, a material weakness in the effectiveness of our internal controls over financial reporting could result in an increased chance of fraud and the loss of customers, reduce our ability to obtain financing and require additional expenditures to comply with these requirements, each of which could have a material adverse effect on our business, results of operations and financial condition.

 

Further, we believe that the out-of-pocket costs, the diversion of management's attention from running the day-to-day operations and operational changes caused by the need to comply with the requirements of Section 404 of the Sarbanes-Oxley Act could be significant. If the time and costs associated with such compliance exceed our current expectations, our results of operations could be adversely affected.

 

There may be conflicts of interest between our management and our non-management stockholders.

 

Conflicts of interest create the risk that management may have an incentive to act adversely to the interests of other investors. A conflict of interest may arise between our management's personal financial interests and the fiduciary duty to our stockholders. Further, our management's own financial interests may at some point compromise their fiduciary duty to our stockholders. John Wilkes and James Cao, who are the Company's sole officers and a majority of its directors, continue to be involved in businesses that operate and commercialize technologies that are similar or related to the Company's, although those businesses exploit and seek to exploit different applications and opportunities. In addition, although it is anticipated that these individuals will spend significant time and effort developing our business, it is possible that they will be exposed to business or employment opportunities that would conflict with the interests of the Company, or cause them to reduce their efforts on the Company's behalf or to entirely cease working with the Company. If we and any other businesses with which our officers are involved wish to take advantage of the same opportunity, then the officer and director that is affiliated with both companies would abstain from voting upon the opportunity.

 

Future success is highly dependent on the ability of management to further develop and implement a business plan, and secure customers.

 

The nature of our operations is highly speculative and there is a consequent risk of loss of your investment. The success of our activities will depend on the availability of finances, opportunities relating to carbon trading, offset and reduction regimes, greenhouse gas emission reduction programs, government regulations and economic conditions in the forestry and timber industries. As we have no operating history or revenue and only minimal assets, there is a risk that we will be unable to consummate a business combination. The Company has had no recent operating history and no revenues or earnings from operations since inception. We have no significant assets or financial resources. We will, in all likelihood, sustain operating expenses without realizing significant revenues for the foreseeable future, at least until the market opportunities for the Company's services and technology develops and the demand for our services becomes more proven and regular. This will likely result in our incurring net operating losses for the foreseeable future. We cannot assure that our business will develop as hoped, or that it will become profitable.

 

 
6
 

 

Our business may have no revenues for the foreseeable future.

 

We have had no revenues from operations. Although the technologies offer potential, we may not realize any revenues unless and until we successfully develop a revenue stream from the use of existing licenses.

 

We may issue more shares to raise additional capital, and permit the development of the Company's business.

 

As a result, the shareholdings of current shareholders may be diluted. Our Articles of Incorporation authorizes the issuance of a maximum of 275,000,000 shares of common stock. We may issue additional shares from time to time to raise the capital that we anticipate will be required to further develop our business. Any share issuance would be subject to compliance with applicable securities laws and subject to that limitation, unless our Articles of Incorporation are amended with approval of our stockholders. This may result in substantial dilution in the percentage of our common stock held by our then existing stockholders. Moreover, the common stock issued from time to time may be valued on an arbitrary or non-arm's-length basis by our management, resulting in an additional reduction in the percentage of common stock held by our then existing stockholders. Our Board of Directors has the power to issue any or all of such authorized but unissued shares without stockholder approval. To the extent that additional shares of common stock or preferred stock are issued, dilution to the interests of our stockholders will occur and the rights of the holders of common stock might be materially and adversely affected.

 

There is limited public market for our Common Stock, and we have never paid dividends on our Common Stock.

 

There is limited public trading market for our common stock which is listed on OTCQB: HCRE and none is expected to develop until our business develops further. Additionally, we have never paid dividends on our common stock and do not presently intend to pay any dividends in the foreseeable future. We anticipate that any funds available for payment of dividends will be re-invested into the Company to further its business strategy. Moreover, a significant number of unregistered securities may not become traded. Pursuant to the Securities Act of 1933, as amended (the "Securities Act") and any other applicable securities laws or regulations these restrictions will limit the ability of our stockholders to liquidate their investment.

 

Limited Operating History; Need for Additional Capital.

 

Although the Company draws on the expertise on the principals who have been operating private businesses in the renewable energy and forestry sectors, there is no pertinent historical financial information for the Company upon which to base an evaluation of our performance. Our assets and business have not yet generated substantial or recurring revenues. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services. We will require additional financing to cover costs that we expect to incur over the next twelve months. We believe that debt financing will not be an alternative for funding our operations as we do not have tangible assets to secure any debt financing. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock or other securities. However, we cannot provide any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our plan of operations. In the absence of such financing, we will not be able to continue and our business plan will fail.

 

Our common stock is subject to the "penny stock" rules of the SEC and the trading market in our securities is limited, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock.

 

The Securities and Exchange Commission has adopted certain rules under the Securities Exchange Act of 1934, as amended (the "Exchange Act") that are applicable to "penny stocks". For the purposes relevant to us, a "penny stock" is any equity security that has a market price of less than $5.00 per share or has an exercise or conversion price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:

 

 
7
 

 

 

·

that a broker or dealer approve a person's account for transactions in penny stocks;

 

·

the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased; and

 

·

that a broker or dealer provide certain detailed market information about the market for the applicable company's securities.

 

In order to approve a person's account for transactions involving penny stocks, the broker or dealer must:

 

(1) obtain financial information, investment experience and investment objectives of the person; and

 

(2) make a reasonable determination that the proposed transactions in penny stocks are suitable for that person and that the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

 

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, which, in highlight form:

 

 

·

sets forth the basis on which the broker or dealer made the suitability determination; and

 

·

that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

 

Following a transaction, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

 

Generally, brokers may be less willing to execute transactions in securities subject to the "penny stock" rules. This may make it more difficult for investors to dispose of our common stock and depress the market value of our stock.

 

There are additional risks of investing in penny stocks whether in public offerings or in secondary trading, relating to commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions.

 

ITEM 1B

UNRESOLVED STAFF COMMENTS

 

None

 

ITEM 2

PROPERTIES.

 

We do not own any property; the principal offices are located at 4830 W. Kennedy Blvd., Suite 600, Tampa, FL 33609. The telephone number is (844) 4-436-2273.

 

ITEM 3

LEGAL PROCEEDINGS.

 

Hemcare Health Services, Inc. is not currently a party to any legal proceedings.

 

ITEM 4

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

 

 None

 

 
8
 

 

PART II

 

ITEM 5

MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

 

Our common stock is quoted on the Over-the-Counter Bulletin Board (OTCBB) under the ticker symbol HCRE.  The stock trades are limited and sporadic; there is no established public trading market for our common stock.  

 

Dividends

 

We declared $19,000 of dividends on preferred stock during the year ended December 31, 2015 and anticipate declaring dividends on preferred stock at the same rate during the year ended December 31, 2016.

 

Securities Authorized for Issuance under Equity Compensation Plans

 

There is no stock option plan in place for the company.

 

Recent Sales of Unregistered Securities

 

There was no sale of unregistered securities during the year ended December 31, 2015.

 

Securities issued in 2015

 

During the year ended December 31, 2015, the Company issued a total of 100,000 shares of Series A Preferred Stock in exchange for a prepaid royalty, issued 26,211 common shares as rounding from our 1:50 stock split from March 2015, issued 138,830,000 common shares for the conversion of 138,830 shares of Series A Preferred Stock, rescinded 730,000 common shares and issued 900,000 common shares for cash proceeds of $45,000.

 

ITEM 6

SELECTED FINANCIAL DATA.

 

Summary of Financial Data

 

 

 

December 31,
2015

 

 

December 31,
2014

 

Revenues

 

$-

 

 

$-

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

$399,261

 

 

$26,340

 

 

 

 

 

 

 

 

 

 

Earnings (Loss)

 

$(630,108)

 

$(186,345)

 

 

 

 

 

 

 

 

 

Total Assets

 

$22,964

 

 

$-

 

 

 

 

 

 

 

 

 

 

Liabilities

 

$497,395

 

 

$104,914

 

 

 

 

 

 

 

 

 

 

Stockholders' Deficit

 

$(474,431)

 

$(104,914)

 

 
9
 

 

ITEM 7

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

The following discussion is intended to assist in the understanding and assessment of significant changes and trends related to the results of operations and financial condition of Hemcare Health Serivces Inc. This discussion and analysis should be read in conjunction with our financial statements and notes thereto included elsewhere in this Annual Report on Form 10-K for the fiscal year ended December 31, 2015.

 

Critical Accounting Policies

 

The preparation of our consolidated financial statements and notes thereto requires management to make estimates and assumptions that affect the amounts and disclosures reported within those financial statements. On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, contingencies, litigation and income taxes. Management bases its estimates and judgments on historical experiences and on various other factors believed to be reasonable under the circumstances. Actual results under circumstances and conditions different than those assumed could result in differences from the estimated amounts in the financial statements. There have been no material changes to these policies during the year ended December 31, 2015.  

 

Plan of Operations

 

Liquidity and Capital Resources. As of December 31, 2015 we had cash on hand of $20,334 and we had liabilities of $497,395. We must secure additional funds in order to continue our business. We were required to secure a loan to pay expenses relating to filing this report including legal, accounting and filing fees and may be required to secure additional financing to fund future filings.  We believe that we will be able to obtain this loan from a current shareholder of the Company; however we cannot provide any assurance that we will be able to raise additional proceeds or secure additional loans in the future to cover our expenses related to maintaining our reporting company status (estimated at $20,000 for the year ending December 31, 2016).  Furthermore, there is no guarantee we will receive the required financing to complete our business strategies; we cannot provide any assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations.  If we are unable to accomplish raising adequate funds then it would be likely that any investment made into the Company would be lost in its entirety.

 

Results of Operations. Total operating expenses were $399,261 during the year ended December 31, 2015 compared to $26,340 during the year ended December 31, 2014. The increase in expenses is from the Company incurring increased professional fees associated with broker fees paid for securing the license agreement to distribute the Ultroid Hemorrhoid System.

 

Other Income (Expense): Other expenses totaled $230,847 during the year ended December 31, 2015 compared to $160,005 during the year ended December 31, 2014. The increase in other expenses is mostly attributable to an increase in excess cost of prepaid royalties over value and $32,177 of interest expenses incurred during the year ended December 31, 2015 on notes entered into during that year.

 

Off-Balance Sheet Arrangements. None

 

Contractual Obligations. None

 

 
10
 

 

ITEM 7A

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

We do not currently hold any market risk sensitive instruments entered into for hedging transaction risks related to foreign currencies. In addition, we have not entered into any transactions with derivative financial instruments for trading purposes.

 

ITEM 8

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

 

Our financial statements appear beginning on page F-1, immediately following the signature page of this report.

 

ITEM 9

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

 

 None

 

ITEM 9A(T)

CONTROLS AND PROCEDURES.

 

Disclosure Controls and Procedures

 

Management of Hemcare Health Services Inc. is responsible for maintaining disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 (the "Exchange Act") is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.

 

In addition, the disclosure controls and procedures must ensure that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required financial and other required disclosures.

 

At the end of the period covered by this report, an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13(a)-15(e) and 15(d)-15(e) of the Securities Exchange Act of 1934 (the "Exchange Act")) was carried out under the supervision and with the participation of our Principal Executive Officer, Principal Financial and Accounting Officer. Based on his evaluation of our disclosure controls and procedures, he concluded that during the period covered by this report, such disclosure controls and procedures were not effective to detect the inappropriate application of US GAAP standards. This was due to deficiencies that existed in the design or operation of our internal control over financial reporting that adversely affected our disclosure controls and that may be considered to be "material weaknesses."

 

The Company will continue to create and refine a structure in which critical accounting policies and estimates are identified, and together with other complex areas, are subject to multiple reviews by accounting personnel. In addition, the Company will enhance and test our year-end financial close process. Additionally, the Company's management will increase its review of our disclosure controls and procedures. Finally, we plan to designate individuals responsible for identifying reportable developments. We believe these actions will remediate the material weakness by focusing additional attention and resources in our internal accounting functions. However, the material weakness will not be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

 

 
11
 

 

Management's Annual Report on Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions; (ii) provide reasonable assurance that transactions are recorded as necessary for preparation of our financial statements; (iii) provide reasonable assurance that receipts and expenditures of company assets are made in accordance with management authorization; and (iv) provide reasonable assurance that unauthorized acquisition, use or disposition of company assets that could have a material effect on our financial statements would be prevented or detected on a timely basis.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because changes in conditions may occur or the degree of compliance with the policies or procedures may deteriorate.

 

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2015. This assessment is based on the criteria for effective internal control described in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its assessment, management concluded that our internal control over financial reporting as of December 31, 2015 was not effective in the specific areas described in the "Disclosure Controls and Procedures" section above and as specifically described in the paragraphs below.

 

As of December 31, 2015 the Principal Executive Officer/Principal Financial Officer identified the following specific material weaknesses in the Company's internal controls over its financial reporting processes:

 

 

·

Policies and Procedures for the Financial Close and Reporting Process — Currently there are no policies or procedures that clearly define the roles in the financial close and reporting process. The various roles and responsibilities related to this process should be defined, documented, updated and communicated. Failure to have such policies and procedures in place amounts to a material weakness to the Company's internal controls over its financial reporting processes.

 

·

Representative with Financial Expertise — For the year ending December 31, 2015, the Company did not have a representative with the requisite knowledge and expertise to review the financial statements and disclosures at a sufficient level to monitor the financial statements and disclosures of the Company. Failure to have a representative with such knowledge and expertise amounts to a material weakness to the Company's internal controls over its financial reporting processes.

 

·

Adequacy of Accounting Systems at Meeting Company Needs — The accounting system in place at the time of the assessment lacks the ability to provide high quality financial statements from within the system, and there were no procedures in place or built into the system to ensure that all relevant information is secure, identified, captured, processed, and reported within the accounting system. Failure to have an adequate accounting system with procedures to ensure the information is secure and accurately recorded and reported amounts to a material weakness to the Company's internal controls over its financial reporting processes.

 

·

Segregation of Duties — Management has identified a significant general lack of definition and segregation of duties throughout the financial reporting processes. Due to the pervasive nature of this issue, the lack of adequate definition and segregation of duties amounts to a material weakness to the Company's internal controls over its financial reporting processes.

 

 
12
 

 

In light of the foregoing, once we have the adequate funds, management plans to develop the following additional procedures to help address these material weaknesses:

 

 

·

The Company will create and refine a structure in which critical accounting policies and estimates are identified, and together with other complex areas, are subject to multiple reviews by accounting personnel. In addition, we plan to enhance and test our month-end and year-end financial close process. Additionally, our audit committee will increase its review of our disclosure controls and procedures. We also intend to develop and implement policies and procedures for the financial close and reporting process, such as identifying the roles, responsibilities, methodologies, and review/approval process. We believe these actions will remediate the material weaknesses by focusing additional attention and resources in our internal accounting functions. However, the material weaknesses will not be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

 

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management's report in this annual report.

 

This report shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

 

Changes in Internal Controls

 

There have been no changes in our internal control over financial reporting that occurred during our fiscal year ended December 31, 2015 that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.

 

ITEM 9B

OTHER INFORMATION.

 

None.

 

 
13
 

 

PART III

 

ITEM 10

DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

 

The Company's executive officers and directors and their respective age as of December 31, 2015 are as follows:

 

Directors:

 

Name of Director

Age

James Cao

52

John Wilkes

54

 

Executive Officer:

 

Name of Officer

Age

Officer

James Cao

52

President and CEO

John Wilkes

54

Chief Financial Officer, Secretary and Treasurer

 

The term of office for each director is one year, or until the next annual meeting of the shareholders.

 

Biographical Information

 

Set forth below is a brief description of the background and business experience of our officers and director for the past year.

 

James Cao

 

Mr. James Cao, (52) has 20+ years of experience operating business enterprises, including business to business and business to consumer activities.

 

Mr. Cao has owned and operated CAO Real Estate, a Commercial and Residential Real Estate Brokerage Firm since 2004. Duties include hiring, training and managing sales associates as well as managing company production and establishing company guidelines and policy and holds a Florida Real Estate Brokers license.

 

Prior to founding his real estate company, Mr. Cao was President/C.E.O of American Dreamhome Funding, Inc. from 2002 to 2008. American Dreamhome Funding was a successful mortgage brokerage company serving CitiCorp, Wachovia, Countrywide Funding, AmNet Mortgage, Bank of America, Wells Fargo Bank, SunTrust Bank and World Savings. During this time he led a sales force in Florida and Georgia, growing annual sales to $54 million. 

 

From 1999 to 2000 Mr. Cao was the Chief Operating Officer of Netoy Corp. Netoy was a publically traded e-commerce toy company with a $250 million market cap. He was responsible for recruiting, hiring, and successfully expanding their sales force. Mr. Cao negotiated with companies such as IBM, EMC, Oracle and Sprint which allowed them to implement logistical software and hardware to accommodate increased e-commerce traffic.

 

 
14
 

 

John Wilkes

 

Mr. Wilkes, M.B.A., C.P.A., C.A. (54) earned his C.A. designation with Price Waterhouse in Toronto, Canada. Upon obtaining his designation he worked privately for a brief period of time before joining Coopers & Lybrand in Toronto, Canada. While there Mr. Wilkes focused on insolvency and Mergers and Acquisitions. In the early '90's Mr. Wilkes joined a junior investment bank called Pagun Corporation where he spent most of his time evaluating environmental technologies. Since 2005, Mr. Wilkes has been an Independent Investment Management Professional, making private investments in both private and public companies that, for the most part, have their core business in the environmental space.

 

Significant Employees

 

We do not employ any non-officers who are expected to make a significant contribution to its business.

 

Corporate Governance

 

Nominating Committee.  We have not established a Nominating Committee because of our limited operations; and because we have only two directors and one officer, we believe that we are able to effectively manage the issues normally considered by a Nominating Committee.

 

Audit Committee.  We have has not established an Audit Committee because of our limited operations; and because we have only two directors and one officer, we believe that we are able to effectively manage the issues normally considered by a Audit Committee.

 

Code of Ethics. We have not adopted a Code of Ethics for our principal executive and financial officers.

 

ITEM 11

EXECUTIVE COMPENSATION.

 

Summary Compensation Table

 

Name and principal position

 

Fiscal

Year

 

Salary

 

 

Bonus

 

 

Other annual compensation

 

 

Restricted
stock

award(s)

 

 

Securities underlying

options/ SARs

 

 

LTIP

payouts

 

 

All other

compensation

 

John Wilkes

Director

 

2015

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

James Cao

Chief Executive Officer

 

2015

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

5,540

 

 

There has been no cash payment outside of the amounts above paid to the individuals above for services rendered in all capacities to us for the year ended December 31, 2015. Minimal compensation is anticipated within the next six months to any officer or director of the Company.

 

Stock Option Grants

 

We did not grant any stock options to the executive officer during the year ended December 31, 2015.

 

 
15
 

 

ITEM 12

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

 

The following table provides the names and addresses of each person known to the Company to own more than 5% of the outstanding common stock as of December 31, 2015 and by the officers and directors, individually and as a group. Except as otherwise indicated, all shares are owned directly.  

 

Beneficial Owner

 

Amount of Stock Owned

 

 

% Ownership

 

Tom Krutulis

 

 

22,832,000

 

 

 

16.1%

 

 

 

 

 

 

 

 

 

Jaswinder Singh

 

 

12,215,000

 

 

 

8.6%

 

 

 

 

 

 

 

 

 

Gilles Trahan

 

 

10,530,000

 

 

 

7.4%

 

 

 

 

 

 

 

 

 

Tran Tran

 

 

10,000,000

 

 

 

7.0%

 

 

 

 

 

 

 

 

 

All Others

 

 

86,585,211

 

 

 

60.9%

 

 

 

 

 

 

 

 

 

Total issued

 

 

142,162,211

 

 

 

100%

 

ITEM 13

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

 

During the year ended December 31, 2015, there were no other material transactions between the Company and any Officer, Director or related party that has not been disclosed in footnote 5 to the financial statements. Additionally, there are no Officers, Directors or other related parties that since the date of incorporation, had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us:

  

 

·

The Officers and Directors;

 

·

Any person proposed as a nominee for election as a director;

 

·

Any other person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to the outstanding shares of common stock;

 

·

Any relative or spouse of any of the foregoing persons who have the same house as such person.

 

Any future transactions between us and our Officers, Directors, and Affiliates will be on terms no less favorable to us than can be obtained from unaffiliated third parties. Such transactions with such persons will be subject to approval of our Board of Directors.

 

ITEM 14

PRINCIPAL ACCOUNTANT FEES AND SERVICES.

 

During the years ended December 31, 2015 and 2014, the Company incurred auditing expenses of approximately $10,375 and $16,125.  There were no other audit related services or tax fees incurred.

 

 
16
 

 

PART IV

 

ITEM 15

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

 

(a)

The following documents have been filed as a part of this Annual Report on Form 10-K.

 

1.

Financial Statements

 

Page

Report of Independent Registered Public Accounting Firm

F-3

Balance Sheets

F-4

Statements of Operations

F-5

Statements of Stockholders' Deficit

F-6

Statements of Cash Flows

F-7

Notes to Financial Statements

F-8-F-12

 

2.

Financial Statement Schedules.

 

All schedules are omitted because they are not applicable or not required or because the required information is included in the Financial Statements or the Notes thereto.

 

3.

Exhibits.

 

The following exhibits are filed as part of, or incorporated by reference into, this Annual Report:

 

EXHIBIT

NUMBER

DESCRIPTION

3.1

Articles of Incorporation

3.2

By-Laws

23.1

Consent of Accountant

31.1

SECTION 302 CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906

101XBRL Interactive Data Files

 

 
17
 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) 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. 

 

/s/ James Cao

/s/ John Wilkes

James Cao

John Wilkes

President and Chief Executive Officer

Chief Financial Officer, Secretary and Treasurer

(Principal Executive Officer)

(Principal Financial Officer)

May 23, 2016

May 23, 2016

 

 
18
 

 

HEMCARE HEALTH SERVICES INC.

(Formerly NSU Resources Inc.)

 

Financial Statements

December 31, 2015 and 2014

 

 

 

 

 

 
F-1
 

 

HEMCARE HEALTH SERVICES INC.

(Formerly NSU Resources Inc.)

 

Financial Statements

December 31, 2015 and 2014

 

CONTENTS

 

Page(s)

Report of Independent Registered Accounting Firm

F-3

Balance Sheets as of December 31, 2015 and 2014

F-4

Statements of Operations for the years ended December 31, 2015 and 2014

F-5

Statement of Changes in Stockholders' Deficit for the years ended December 31, 2015 and 2014

F-6

Statements of Cash Flows for the years ended December 31, 2015 and 2014

F-7

Notes to the Financial Statements

F-8 - F-12

 

 
F-2
 

 

PRITCHETT, SILER & HARDY, P.C.

CERTIFIED PUBLIC ACCOUNTANTS

A PROFESSIONAL CORPORATION

1438 N. HIGHWAY 89 STE. 130

FARMINGTON, UTAH 84025

_______________

 

(801) 447-9572 FAX (801) 447-9578

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Stockholders

Hemcare Health Services Inc. (Formerly NSU Resources Inc.)

Tampa, FL

 

We have audited the accompanying balance sheets of Hemcare Health Services Inc. (Formerly NSU Resources Inc.) as of December 31, 2015 and 2014 and the related statements of operations, stockholders' deficit and cash flows for the years then ended. These financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.  Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Hemcare Health Services Inc. (Formerly NSU Resources Inc.) as of December 31, 2015 and 2014 and the results of its operations and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses and has a net capital deficiency. These conditions raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note (2). The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.

 

/s/ Pritchett, Siler & Hardy, P.C.

 

Pritchett, Siler & Hardy, P.C.

Farmington, Utah 84025

May 23, 2016 

 

 
F-3
 

 

HEMCARE HEALTH SERVICES INC.
Balance Sheets

 

 

 

December 31,

 

 

 

2015

 

 

2014

 

ASSETS

Current assets

 

 

 

 

 

 

Cash

 

$20,334

 

 

$-

 

Prepaid expenses

 

 

2,630

 

 

 

-

 

Total current assets

 

 

22,964

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Total assets

 

$22,964

 

 

$-

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$86,896

 

 

$67,665

 

Dividends payable

 

 

19,000

 

 

 

-

 

Related party payables

 

 

37,249

 

 

 

37,249

 

Current notes payables

 

 

350,000

 

 

 

-

 

Related party convertible notes payable, net of discounts $10,249 and $0

 

 

385

 

 

 

-

 

Convertible notes payable, net of discounts $12,835 and $0

 

 

3,865

 

 

 

-

 

Total current liabilities

 

 

497,395

 

 

 

104,914

 

 

 

 

 

 

 

 

 

 

Stockholders' deficit

 

 

 

 

 

 

 

 

Series A convertible preferred stock, $1.00 par value; 5,000,000 shares authorized, 81,170 and 120,000 and shares issued and outstanding at December 31, 2015 and 2014

 

 

81,170

 

 

 

120,000

 

Common stock, $0.001 par value; 275,000,000 shares authorized; 142,162,211 and 3,136,000 issued; 141,782,211 and 2,756,000 outstanding at December 31, 2015 and 2014

 

 

142,162

 

 

 

3,136

 

Additional paid in capital

 

 

2,556,665

 

 

 

2,377,270

 

Other comprehensive income

 

 

24

 

 

 

24

 

Treasury stock, 380,000 shares

 

 

(100)

 

 

(100)

Accumulated deficit

 

 

(3,254,352)

 

 

(2,605,244)

Total stockholders' deficit

 

 

(474,431)

 

 

(104,914)

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' deficit

 

$22,964

 

 

$-

 

 

See accompanying notes to financial statements. 

 

 
F-4
 

 

HEMCARE HEALTH SERVICES INC.
Statements of Operations

 

 

 

Year ended December 31,

 

 

 

2015

 

 

2014

 

Revenue

 

$-

 

 

$-

 

Operating expenses

 

 

 

 

 

 

 

 

General and administrative

 

 

23,977

 

 

 

-

 

Professional fees

 

 

375,284

 

 

 

26,340

 

Total operating expenses

 

 

399,261

 

 

 

26,340

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

Other income

 

 

937

 

 

 

100

 

Interest expense

 

 

(32,177)

 

 

-

 

Excess cost of prepaid royalties over value

 

 

(199,607)

 

 

(160,105)

Total other income (expense)

 

 

(230,847)

 

 

(160,005)

 

 

 

 

 

 

 

 

 

Net loss

 

$(630,108)

 

$(186,345)

 

 

 

 

 

 

 

 

 

Preferred stock dividends payable

 

 

(19,000)

 

 

-

 

Net loss attributable to common shareholders

 

$(649,108)

 

$(186,345)

 

 

 

 

 

 

 

 

 

Basic and diluted loss per common share

 

$(0.01)

 

$(0.06)

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

87,783,992

 

 

 

2,932,578

 

 

See accompanying notes to financial statements.

 

 
F-5
 

 

HEMCARE HEALTH SERVICES INC.
Statement of Changes in Stockholders' Deficit

 

 

 

Preferred Stock

 

 

Common Stock

 

 

Additional
Paid-

 

 

Other comprehensive

 

 

Treasury

 

 

Accumulated

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

in Capital

 

 

income

 

 

Stock

 

 

Deficit

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2013

 

 

-

 

 

$-

 

 

 

3,136,000

 

 

$3,136

 

 

$2,337,165

 

 

$24

 

 

$-

 

 

$(2,418,899)

 

$(78,574)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred shares issued for prepayment of royalty

 

 

120,000

 

 

 

120,000

 

 

 

-

 

 

 

-

 

 

 

40,105

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

160,105

 

Treasury stock exchanged for asset

 

 

-

 

 

 

-

 

 

 

(380,000)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(100)

 

 

-

 

 

 

(100)

Net loss, year ended December 31, 2014

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(186,345)

 

 

(186,345)

Balance, December 31, 2014

 

 

120,000

 

 

 

120,000

 

 

 

2,756,000

 

 

 

3,136

 

 

 

2,377,270

 

 

 

24

 

 

 

(100)

 

 

(2,605,244)

 

 

(104,914)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred shares issued for prepayment of royalty

 

 

100,000

 

 

 

100,000

 

 

 

-

 

 

 

-

 

 

 

99,607

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

199,607

 

Conversion of preferred shares to common shares

 

 

(138,830)

 

 

(138,830)

 

 

138,830,000

 

 

 

138,830

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Issuance of common shares for rounding in stock split

 

 

 

 

 

 

 

 

 

 

26,211

 

 

 

26

 

 

 

(26)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Recession of common shares

 

 

-

 

 

 

-

 

 

 

(730,000)

 

 

(730)

 

 

730

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Common stock issued for cash

 

 

-

 

 

 

-

 

 

 

900,000

 

 

 

900

 

 

 

44,100

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

45,000

 

Beneficial conversion features recorded as debt discounts

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

34,984

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

34,984

 

Dividend declared on preferred stock

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(19,000)

 

 

(19,000)

Net loss, year ended December 31, 2015

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(630,108)

 

 

(630,108)

 

 

 

81,170

 

 

$81,170

 

 

 

141,782,211

 

 

$142,162

 

 

$2,556,665

 

 

$24

 

 

$(100)

 

$(3,254,352)

 

$(474,431)

 

See accompanying notes to financial statements.

 

 
F-6
 

 

HEMCARE HEALTH SERVICES INC.
Statements of Cash Flows

 

 

Year ended December 31,

 

 

 

2015

 

 

2014

 

Cash flows from operating activities

 

 

 

 

 

 

Net loss from operations

 

$(630,108)

 

$(186,345)

Adjustments to reconcile net loss to net cash used in operating activities

 

 

Excess cost of prepaid royalties over value

 

 

199,607

 

 

 

160,105

 

Gain on sale of intangible asset for treasury stock

 

 

-

 

 

 

(100)

Note payable entered into for professional fees

 

 

350,000

 

 

 

-

 

Amortization of debt discounts

 

 

11,900

 

 

 

-

 

Expenses paid on behalf of company by related parties

 

 

15,784

 

 

 

18,035

 

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

Prepaid expenses

 

 

(2,630)

 

 

800

 

Accounts payable and accrued liabilities

 

 

19,231

 

 

 

7,505

 

Net cash provided by (used in) operating activities

 

 

(36,216)

 

 

-

 

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Proceeds from convertible notes payable

 

 

19,700

 

 

 

-

 

Repayments of convertible notes payable

 

 

(3,000)

 

 

 

 

Repayments of related party convertible notes payable

 

 

(5,150)

 

 

 

 

Proceeds from sale of common stock

 

 

45,000

 

 

 

-

 

Net cash provided by financing activities

 

 

56,550

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Net change in cash

 

 

20,334

 

 

 

-

 

Cash at beginning of period

 

 

-

 

 

 

-

 

Cash at end of period

 

$20,334

 

 

$-

 

 

 

 

 

 

 

 

 

 

Supplemental cash flow information

 

 

 

 

 

 

 

 

Cash paid for interest

 

$-

 

 

$-

 

Cash paid for income taxes

 

$-

 

 

$-

 

 

 

 

 

 

 

 

 

 

Non-cash investing and financing activities

 

 

 

 

 

 

 

 

Preferred stock issued for prepaid royalties

 

$100,000

 

 

$120,000

 

Related party convertible notes entered into in exchange for related party payable

 

$15,784

 

 

$-

 

Note payable entered into for professional fees

 

$350,000

 

 

$-

 

 

See accompanying notes to financial statements.
 

 
F-7
 

 

HEMCARE HEALTH SERVICES INC.

(Formerly NSU Resources, Inc.)

Notes to Financial Statements

December 31, 2015 and 2014

 

Note 1 – Nature of Business

 

The Company was organized January 17, 2007 (Date of Inception) under the laws of the State of Nevada, as DBL Senior Care, Inc. The Company subsequently changed its name on December 11, 2009 to Elemental Protective Coatings Corp, subsequently changed its name on January 27, 2011 to Bio-Carbon Solutions International, Inc., then to NSU Resources Inc on October 31, 2011 and more recently to HemCare Health Services Inc. on March 2, 2015. The Company produces and distributes a line of all-in-one horse feed supplement.

 

The former business of the Company was to provide personal care services to elderly, physically disabled or other home-bound individuals suffering infirmity. During the year ended December 31, 2009, the board of directors changed the Company's focus toward the manufacture and sale of fire retardant products. The Company then changed its focus to the licensing of certain technologies related to rare earth minerals mining then to having the exclusive rights to the use of Optimum Performance (a proprietary formulation of a highly potent all-in-one daily feed supplement for the Horse industry. Currently, the Company has shifted its focus to hemorrhoid medical procedures and entered into a license agreement to open hemorrhoid treatment centers and promote the Ultroid Hemorrhoid System globally

 

Note 2 – Significant Accounting Policies

 

Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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.

 

Cash

 

For the Statements of Cash Flows, all highly liquid investments with maturity of three months or less are considered to be cash equivalents.  There were no cash equivalents as of December 31, 2015 or 2014.

 

Income taxes

 

Income taxes are provided for using the liability method of accounting in accordance with FASB ASC Topic 740 (formally SFAS No. 109 "Accounting for Income Taxes").  A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting.  Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis.  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 effect of changes in tax laws and rates on the date of enactment.

 

Revenue Recognition

 

Revenue is recognized when persuasive evidence of an agreement exists, the price is fixed or determinable, goods are delivered or services performed and collectability is reasonably assured. The Company did not generate any revenues during the years ended December 31, 2015 or 2014.

 

Convertible debt

 

The Company records a beneficial conversion feature related to the issuance of convertible debts that have conversion features at fixed or adjustable rates. The beneficial conversion feature for the convertible instruments is recognized and measured by allocating a portion of the proceeds as an increase in additional paid-in capital and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features. The beneficial conversion feature will be accreted by recording additional non-cash interest expense over the expected life of the convertible notes.

 

 
F-8
 

 

HEMCARE HEALTH SERVICES INC.

(Formerly NSU Resources, Inc.)

Notes to Financial Statements

December 31, 2015 and 2014

 

Note 2 – Significant Accounting Policies (continued)

 

Share Based Expenses

 

The Company complies with FASB ASC Topic 718 Compensation—Stock Compensation, which establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that is based on the fair value of the entity's equity instruments or that may be settled by the issuance of those equity instruments. FASB ASC Topic 718 primarily focuses on accounting for transactions in which an entity obtains employee services in share-based payment transactions. This statement requires a public entity to expense the cost of employee services received in exchange for an award of equity instruments. This statement also provides guidance on valuing and expensing these awards, as well as disclosure requirements of these equity arrangements. The Company adopted FASB ASC Topic 718 upon formation of the Company and expenses share based costs in the period incurred.

 

Going concern

 

The Company's financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern.  This contemplates the realization of assets and the liquidation of liabilities in the normal course of business.  Currently, the Company has no cash, no material assets, accumulated losses of $3,428,812, a working capital deficit of $118,891, nor does it have operations or a source of revenue sufficient to cover its operation costs and allow it to continue as a going concern.  The Company will be dependent upon the raising of additional capital through placement of our common stock in order to implement its business plan, or merge with an operating company.  There can be no assurance that the Company will be successful in either situation in order to continue as a going concern.  The officers and directors have committed to advancing certain operating costs of the Company.

 

Valuation of Investments in Securities and Securities at fair value – Definition and Hierarchy

 

FASB ASC 820-10-15 defines fair value, thereby eliminating inconsistencies in guidance found in various prior accounting pronouncements, and increases disclosures surrounding fair value calculations. FASB ASC 820-10-15 establishes a three-tiered fair value hierarchy that prioritizes inputs to valuation techniques used in fair value calculations. The three levels of inputs are defined as follows:

 

Level 1 – unadjusted quoted prices for identical assets or liabilities in active markets accessible by the Company at the measurement date.

 

Level 2 – inputs that are observable in the marketplace other than those inputs classified as Level 1.

 

Level 3 – inputs that are unobservable in the marketplace and significant to the valuation.

 

The Company has no assets or liabilities that are required to be carried at fair value. Accounts payable and related party payables have fair values that approximate the carrying value due to the short term nature of these instruments.

 

Recent Accounting Pronouncements

 

Recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not, or are not believed by management to, have a material impact on the Company's present or future consolidated financial statements.

 

 
F-9
 

 

HEMCARE HEALTH SERVICES INC.

(Formerly NSU Resources, Inc.)

Notes to Financial Statements

December 31, 2015 and 2014

 

Note 2 – Significant Accounting Policies (continued)

 

Net loss per common share

 

Net loss per share is calculated in accordance with FASB ASC Topic 260 (formerly SFAS No. 128, Earnings Per Share). The weighted-average number of common shares outstanding during each period is used to compute basic loss per share. Diluted loss per share is computed using the weighted average number of shares and dilutive potential common shares outstanding. Dilutive potential common shares are additional common shares assumed to be exercised. Basic net loss per common share is based on the weighted average number of shares of common stock outstanding during the periods presented. The Company had 84,668,400 common stock equivalents that were excluded from earnings per share due to the anti-dilutive nature.

 

Note 3 – Stockholders' Equity

 

Series A Convertible Preferred Stock

 

As discussed in the 8-K filed with the SEC on June 29, 2014, during the year ended December 31, 2014, the Company amended its articles of incorporation to designate the previously authorized series A preferred stock to series A convertible preferred stock. The preferred series A 12% convertible shares have a par value of $1, entitle holder to one vote and accrue dividends at 12% per year, paid quarterly. At the option of the holder, the stock can be converted into shares of the Company's common stock. The number of shares to be issued will be determined by dividing the amount of the Series A shares being converted by $0.001.

 

During the year ended December 31, 2014, the Company issued 120,000 shares of series A convertible preferred stock in exchange for a prepayment of royalties to a related party totaling $120,000. During year ended December 31, 2015, the Company issued 100,000 shares of series A convertible preferred stock in exchange for a prepayment of royalties with a deemed value of $0 due to the undeterminable nature of the true future usable value to the Company. The Company also accepted the conversion notices from certain series A convertible preferred shareholders to convert a total of 138,830 shares of series A preferred stock to 138,830,000 shares of $0.001 par value common stock.

 

The excess of the value of the preferred shares issued in excess of the value of the prepaid royalties has been expensed as a financing cost.

 

There were 81,170 and 120,000 shares of series A convertible preferred stock issued and outstanding as of December 31, 2015 and 2014. Additionally, the Company had accrued dividends payable on series A convertible preferred stock totaling $19,000 and $0 at December 31, 2015 and 2014.

 

Common Stock

 

On March 2, 2015, the Company effected a 1:50 reverse stock split. The effects of the reverse split are shown retroactively in these financial statements.

 

The authorized common stock of the Company consists of 275,000,000 shares and carries a par value of $0.001. During the year ended December 31, 2014, the Company bought back 380,000 post-split shares of common stock into treasury from a former officer for $100. The shares are being carried as treasury shares as reflected on the balance sheet.

 

During the year ended December 31, 2015, the Company rescinded 730,000 common shares previously issued pursuant to certain agreements. The Company determined the holders did not have legal right to the shares as issued.

 

During the year ended December 31, 2015, the Company issued 138,830,000 common shares from the conversion of 138,830 shares of Series A Preferred Stock.

 

During the year ended December 31, 2015, the Company issued 900,000 shares of common stock for total cash proceeds of $45,000 and 26,211 shares to account for rounding in our 1:50 stock split as previously discussed.

 

There were 142,162,211 and 3,136,000 common shares issued and 141,782,211 and 2,756,000 outstanding (post-split) at December 31, 2015 and 2014, respectively.

 

Note 4 – Income Taxes

 

We did not provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented because we have experienced operating losses since inception. Pursuant to FASB ASC Topic 740, when it is more likely than not that a tax asset cannot be realized through future income, the Company must provide an allowance for this future tax benefit. We provided a full valuation allowance on the net deferred tax asset, consisting of net operating loss carry-forwards, because management has determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax assets during the carry-forward period.

 

The sources and tax effects of the temporary differences for the periods presented are as follows:

 

 
F-10
 

 
 

HEMCARE HEALTH SERVICES INC.

(Formerly NSU Resources, Inc.)

Notes to Financial Statements

December 31, 2015 and 2014

 

Note 4 – Income Taxes (continued)

 

 

 

December 31,
2015

 

 

December 31,
2014

 

Net operating loss carry forward

 

$748,640

 

 

$318,139

 

Applicable Canadian Federal and Provincial tax rates

 

 

26.5%

 

 

26.5%

Deferred tax asset

 

 

198,390

 

 

 

84,307

 

Valuation allowance

 

 

(198,390)

 

 

(84,307)

Net deferred tax asset

 

$-

 

 

$-

 

 

This represents an increase in the net operating loss carry forward of $430,501 and $19,869 for the years ended December 31, 2015 and 2014. A reconciliation of income taxes computed at the United States federal statutory rate of 35% to the income tax recorded is as follows: 

 

 

 

December 31,
2015

 

 

December 31,
2014

 

Tax benefit at United States Federal statutory rate (35%)

 

$220,538

 

 

$65,221

 

Differences in U.S. and Canadian tax rates on provision

 

 

(36,592)

 

 

(15,839)

Non-deductible losses-prepaids

 

 

(69,862)

 

 

(42,428)

Increase in valuation allowance

 

 

(114,083)

 

 

(6,954)

Income tax provision

 

$-

 

 

$-

 

 

This represents an increase in the valuation allowance of $114,083 and $6,954 for the years ended December 31, 2015 and 2014. The Company did not pay any income taxes during the years ended December 31, 2015 or 2014, or since inception. 

 

The net federal operating loss carry forward will begin to expire in 2026.  This carry forward may be limited upon the consummation of a business combination under IRC Section 381. Tax years commencing in 2012 remain open for examination by the IRS, where applicable. 

 

Note 5 – Related Party Transactions

 

During the years ended December 31, 2015 and 2014, the Company received loans from its officers totaling $15,784 and $18,035 to fund operations via expenses paid directly to vendors on behalf of the Company. These loans are non-interest bearing, are due on demand and as such included in current liabilities. Imputed interest has been considered, but determined to be immaterial to the financial statements as a whole.

 

On August 8, 2015, the Company entered into a convertible note payable for $15,784 in exchange for the related party payable incurred from expenses paid on behalf of the Company. The note carries interest at a rate of 6% per annum, is due on August 24, 2016 and may be converted into common stock of the Company at the option of the noteholder at a rate of $.01 per share. The beneficial conversion feature in the note created a debt discount of $15,784 of which $5,535 was recognized during the year ended December 31, 2015 leaving an unamortized discount of $10,249 as of December 31, 2015 that will be recognized over the remaining life of the note. There was $10,634 of interest plus accrued interest totaling $360 due as of December 31, 2015.

 

 
F-11
 

 

HEMCARE HEALTH SERVICES INC.

(Formerly NSU Resources, Inc.)

Notes to Financial Statements

December 31, 2015 and 2014

 

Note 6 – Excess Cost of Prepaid Royalties Over Value

 

During the year ended December 31, 2014, the Company issued a total of 120,000 preferred shares of $1 par value Series A convertible preferred stock. The shares carried a value of $160,105 resulting in an immediate excess payment over value of $160,105 based on the Company's determination that it may not realize value for the prepayment resulting in a full charge-off to operations for $160,105.

 

During the year ended December 31, 2015, the Company issued a total of 100,000 preferred shares of $1 par value Series A convertible preferred stock. The shares carried a value of $199,607 resulting in an immediate excess payment over value of $199,607 based on the Company's determination that it may not realize value for the prepayment resulting in a full charge-off to operations for $199,607.

 

Note 7 – Notes Payable

 

During the year ended December 31, 2015, the Company entered into a note payable with an unrelated party as a settlement for payment of consulting services provided valued at $350,000. The note carries interest of 9% compounded annually and is due on November 19, 2016. There was $350,000 of principal and $19,504 of accrued interest due as of December 31, 2015. Accrued interest payable is included in "accounts payable and accrued liabilities" on the balance sheet.

 

Note 8 – Convertible Notes Payable

 

During the year ended December 31, 2015, the Company entered into a convertible note payable with an unrelated party resulting in net cash proceeds to the Company totaling $19,700. The note is convertible into common stock of the Company at the option of the noteholder at a rate of $0.01 per share. The Company measured the value of the beneficial conversion feature of the note and recorded a discount equal to the face value of the note on the date of issuance. The discount will be recognized ratably over the life of the note through the due date as shown below. A summary of the outstanding convertible note payable as of December 31, 2015 follows:

 

 

 

Due Date

 

Principal

 

 

Discount

 

 

Net Value

 

Noteholder 1

 

9/1/2016

 

$16,700

 

 

$(12,835)

 

$3,865

 

Total

 

 

 

$16,700

 

 

$(12,835)

 

$3,865

 

 

Note 9 – Subsequent Events

 

We have evaluated subsequent events through the date of this filing and determined there are no additional events to disclose.

  

 

F-12


EX-31.1 2 hcre_ex311.htm CERTIFICATION hcre_ex311.htm

EXHIBIT 31.1

 

CERTIFICATION

 

I, James Cao, Chief Executive Officer, certify that:

 

(1)

I have reviewed this report on Form 10-K for the annual period ended December 31, 2015 of Hemcare Health Services 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 this 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 and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-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 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 and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the registrant's auditors and the audit committee of 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.

 

 

Hemcare Health Services Inc.

Date: May 23, 2016

By:

/s/ James Cao

James Cao

Chief Executive Officer

(Principal Executive Officer)

 

EX-32.1 3 hcre_ex321.htm CERTIFICATION hcre_ex321.htm

EXHIBIT 32.1

 

CERTIFICATION 

PURSUANT TO 

18 U.S.C. SECTION 1350, 

AS ADOPTED PURSUANT TO 

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

The undersigned, James Cao, the Chief Executive Officer, and Chief Financial Officer of Hemcare Health Services, Inc hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to their knowledge, the report on Form 10-K of Hemcare Health Services Inc, for the annual period ended December 31, 2015, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and that the information contained in the report on Form 10-K fairly presents in all material respects the financial condition and results of operations of Hemcare Health Services Inc.

 

/s/ James Cao

/s/ James Cao

James Cao

James Cao

President and Chief Executive Officer

Chief Financial Officer, Secretary and Treasurer

(Principal Executive Officer)

(Principal Financial Officer)

May 23, 2016

May 23, 2016

 

 

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Dec. 31, 2015
May. 23, 2016
Document And Entity Information    
Entity Registrant Name HEMCARE HEALTH SERVICES INC.  
Entity Central Index Key 0001420368  
Document Type 10-K  
Document Period End Date Dec. 31, 2015  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Is Entity a Well-known Seasoned Issuer? No  
Is Entity a Voluntary Filer? Yes  
Is Entity's Reporting Status Current? No  
Entity Filer Category Smaller Reporting Company  
Entity Public Float   $ 0
Entity Common Stock, Shares Outstanding   141,782,211
Document Fiscal Period Focus FY  
Document Fiscal Year Focus 2015  
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Dec. 31, 2015
Dec. 31, 2014
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Cash $ 20,334
Prepaid expenses 2,630
Total current assets 22,964
Total assets 22,964 $ 0
Current liabilities    
Accounts payable and accrued liabilities 86,896 $ 67,665
Dividends payable 19,000
Related party payables 37,249 $ 37,249
Current notes payables 350,000
Related party convertible notes payable, net of discounts $10,249 and $0 385
Convertible notes payable, net of discounts $12,835 and $0 3,865
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Accumulated deficit (3,254,352) (2,605,244)
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Dec. 31, 2014
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Dec. 31, 2014
Statements Of Operations    
Revenue
Operating expenses    
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Professional fees 375,284 $ 26,340
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Other income (expense)    
Other income 937 $ 100
Interest expense (32,177)
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Common Stock
Additional Paid-In Capital
Other Comprehensive Income
Treasury Stock
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Dec. 31, 2014
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Net cash used in investing activities
Cash flows from financing activities    
Proceeds from convertible notes payable $ 19,700
Repayments of convertible notes payable (3,000)
Repayments of related party convertible notes payable (5,150)
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Net change in cash $ 20,334
Cash at beginning of period
Cash at end of period $ 20,334
Supplemental cash flow information    
Cash paid for interest
Cash paid for income taxes
Non-cash investing and financing activities    
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Nature of Business
12 Months Ended
Dec. 31, 2015
Notes to Financial Statements  
Note 1 - Nature of Business

The Company was organized January 17, 2007 (Date of Inception) under the laws of the State of Nevada, as DBL Senior Care, Inc. The Company subsequently changed its name on December 11, 2009 to Elemental Protective Coatings Corp, subsequently changed its name on January 27, 2011 to Bio-Carbon Solutions International, Inc., then to NSU Resources Inc on October 31, 2011 and more recently to HemCare Health Services Inc. on March 2, 2015. The Company produces and distributes a line of all-in-one horse feed supplement.

 

The former business of the Company was to provide personal care services to elderly, physically disabled or other home-bound individuals suffering infirmity. During the year ended December 31, 2009, the board of directors changed the Company's focus toward the manufacture and sale of fire retardant products. The Company then changed its focus to the licensing of certain technologies related to rare earth minerals mining then to having the exclusive rights to the use of Optimum Performance (a proprietary formulation of a highly potent all-in-one daily feed supplement for the Horse industry. Currently, the Company has shifted its focus to hemorrhoid medical procedures and entered into a license agreement to open hemorrhoid treatment centers and promote the Ultroid Hemorrhoid System globally

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Significant Accounting Policies
12 Months Ended
Dec. 31, 2015
Notes to Financial Statements  
Note 2 - Significant Accounting Policies

Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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.

 

Cash

 

For the Statements of Cash Flows, all highly liquid investments with maturity of three months or less are considered to be cash equivalents.  There were no cash equivalents as of December 31, 2015 or 2014.

 

Income taxes

 

Income taxes are provided for using the liability method of accounting in accordance with FASB ASC Topic 740 (formally SFAS No. 109 "Accounting for Income Taxes").  A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting.  Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis.  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 effect of changes in tax laws and rates on the date of enactment.

 

Revenue Recognition

 

Revenue is recognized when persuasive evidence of an agreement exists, the price is fixed or determinable, goods are delivered or services performed and collectability is reasonably assured. The Company did not generate any revenues during the years ended December 31, 2015 or 2014.

 

Convertible debt

 

The Company records a beneficial conversion feature related to the issuance of convertible debts that have conversion features at fixed or adjustable rates. The beneficial conversion feature for the convertible instruments is recognized and measured by allocating a portion of the proceeds as an increase in additional paid-in capital and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features. The beneficial conversion feature will be accreted by recording additional non-cash interest expense over the expected life of the convertible notes.

 

Share Based Expenses

 

The Company complies with FASB ASC Topic 718 Compensation—Stock Compensation, which establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that is based on the fair value of the entity's equity instruments or that may be settled by the issuance of those equity instruments. FASB ASC Topic 718 primarily focuses on accounting for transactions in which an entity obtains employee services in share-based payment transactions. This statement requires a public entity to expense the cost of employee services received in exchange for an award of equity instruments. This statement also provides guidance on valuing and expensing these awards, as well as disclosure requirements of these equity arrangements. The Company adopted FASB ASC Topic 718 upon formation of the Company and expenses share based costs in the period incurred.

 

Going concern

 

The Company's financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern.  This contemplates the realization of assets and the liquidation of liabilities in the normal course of business.  Currently, the Company has no cash, no material assets, accumulated losses of $3,428,812, a working capital deficit of $118,891, nor does it have operations or a source of revenue sufficient to cover its operation costs and allow it to continue as a going concern.  The Company will be dependent upon the raising of additional capital through placement of our common stock in order to implement its business plan, or merge with an operating company.  There can be no assurance that the Company will be successful in either situation in order to continue as a going concern.  The officers and directors have committed to advancing certain operating costs of the Company.

 

Valuation of Investments in Securities and Securities at fair value – Definition and Hierarchy

 

FASB ASC 820-10-15 defines fair value, thereby eliminating inconsistencies in guidance found in various prior accounting pronouncements, and increases disclosures surrounding fair value calculations. FASB ASC 820-10-15 establishes a three-tiered fair value hierarchy that prioritizes inputs to valuation techniques used in fair value calculations. The three levels of inputs are defined as follows:

 

Level 1 – unadjusted quoted prices for identical assets or liabilities in active markets accessible by the Company at the measurement date.

 

Level 2 – inputs that are observable in the marketplace other than those inputs classified as Level 1.

 

Level 3 – inputs that are unobservable in the marketplace and significant to the valuation.

 

The Company has no assets or liabilities that are required to be carried at fair value. Accounts payable and related party payables have fair values that approximate the carrying value due to the short term nature of these instruments.

 

Recent Accounting Pronouncements

 

Recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not, or are not believed by management to, have a material impact on the Company's present or future consolidated financial statements.

 

Net loss per common share

 

Net loss per share is calculated in accordance with FASB ASC Topic 260 (formerly SFAS No. 128, Earnings Per Share). The weighted-average number of common shares outstanding during each period is used to compute basic loss per share. Diluted loss per share is computed using the weighted average number of shares and dilutive potential common shares outstanding. Dilutive potential common shares are additional common shares assumed to be exercised. Basic net loss per common share is based on the weighted average number of shares of common stock outstanding during the periods presented. The Company had 84,668,400 common stock equivalents that were excluded from earnings per share due to the anti-dilutive nature.

XML 18 R9.htm IDEA: XBRL DOCUMENT v3.4.0.3
Stockholders' Equity
12 Months Ended
Dec. 31, 2015
Notes to Financial Statements  
Note 3 - Stockholders' Equity

Series A Convertible Preferred Stock

 

As discussed in the 8K filed with the SEC on June 29, 2014, during the year ended December 31, 2014, the Company amended its articles of incorporation to designate the previously authorized series A preferred stock to series A convertible preferred stock. The preferred series A 12% convertible shares have a par value of $1, entitle holder to one vote and accrue dividends at 12% per year, paid quarterly. At the option of the holder, the stock can be converted into shares of the Company's common stock. The number of shares to be issued will be determined by dividing the amount of the Series A shares being converted by $0.001.

 

During the year ended December 31, 2014, the Company issued 120,000 shares of series A convertible preferred stock in exchange for a prepayment of royalties to a related party totaling $120,000. During year ended December 31, 2015, the Company issued 100,000 shares of series A convertible preferred stock in exchange for a prepayment of royalties with a deemed value of $0 due to the undeterminable nature of the true future usable value to the Company. The Company also accepted the conversion notices from certain series A convertible preferred shareholders to convert a total of 138,830 shares of series A preferred stock to 138,830,000 shares of $0.001 par value common stock.

 

The excess of the value of the preferred shares issued in excess of the value of the prepaid royalties has been expensed as a financing cost.

 

There were 81,170 and 120,000 shares of series A convertible preferred stock issued and outstanding as of December 31, 2015 and 2014. Additionally, the Company had accrued dividends payable on series A convertible preferred stock totaling $19,000 and $0 at December 31, 2015 and 2014.

 

Common Stock

 

On March 2, 2015, the Company effected a 1:50 reverse stock split. The effects of the reverse split are shown retroactively in these financial statements.

 

The authorized common stock of the Company consists of 275,000,000 shares and carries a par value of $0.001. During the year ended December 31, 2014, the Company bought back 380,000 post-split shares of common stock into treasury from a former officer for $100. The shares are being carried as treasury shares as reflected on the balance sheet.

 

During the year ended December 31, 2015, the Company rescinded 730,000 common shares previously issued pursuant to certain agreements. The Company determined the holders did not have legal right to the shares as issued.

 

During the year ended December 31, 2015, the Company issued 138,830,000 common shares from the conversion of 138,830 shares of Series A Preferred Stock.

 

During the year ended December 31, 2015, the Company issued 900,000 shares of common stock for total cash proceeds of $45,000 and 26,211 shares to account for rounding in our 1:50 stock split as previously discussed.

 

There were 142,162,211 and 3,136,000 common shares issued and 141,782,211 and 2,756,000 outstanding (post-split) at December 31, 2015 and 2014, respectively.

XML 19 R10.htm IDEA: XBRL DOCUMENT v3.4.0.3
Income Taxes
12 Months Ended
Dec. 31, 2015
Notes to Financial Statements  
Note 4 - Income Taxes

We did not provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented because we have experienced operating losses since inception. Pursuant to FASB ASC Topic 740, when it is more likely than not that a tax asset cannot be realized through future income, the Company must provide an allowance for this future tax benefit. We provided a full valuation allowance on the net deferred tax asset, consisting of net operating loss carry-forwards, because management has determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax assets during the carry-forward period.

 

The sources and tax effects of the temporary differences for the periods presented are as follows:

 

    December 31,
2015
    December 31,
2014
 
Net operating loss carry forward   $ 748,640     $ 318,139  
Applicable Canadian Federal and Provincial tax rates     26.5 %     26.5 %
Deferred tax asset     198,390       84,307  
Valuation allowance     (198,390 )     (84,307 )
Net deferred tax asset   $ -     $ -  

 

This represents an increase in the net operating loss carry forward of $430,501 and $19,869 for the years ended December 31, 2015 and 2014. A reconciliation of income taxes computed at the United States federal statutory rate of 35% to the income tax recorded is as follows: 

 

    December 31,
2015
    December 31,
2014
 
                 
Tax benefit at United States Federal statutory rate (35%)   $ 220,538     $ 65,221  
Differences in U.S. and Canadian tax rates on provision     (36,592 )     (15,839 )
Non-deductible losses-prepaids     (69,862 )     (42,428 )
Increase in valuation allowance     (114,083 )     (6,954 )
Income tax provision   $ -     $ -  

 

This represents an increase in the valuation allowance of $114,083 and $6,954 for the years ended December 31, 2015 and 2014. The Company did not pay any income taxes during the years ended December 31, 2015 or 2014, or since inception. 

 

The net federal operating loss carry forward will begin to expire in 2026.  This carry forward may be limited upon the consummation of a business combination under IRC Section 381. Tax years commencing in 2012 remain open for examination by the IRS, where applicable. 

XML 20 R11.htm IDEA: XBRL DOCUMENT v3.4.0.3
Related Party Transactions
12 Months Ended
Dec. 31, 2015
Notes to Financial Statements  
Note 5 - Related Party Transactions

During the years ended December 31, 2015 and 2014, the Company received loans from its officers totaling $15,784 and $18,035 to fund operations via expenses paid directly to vendors on behalf of the Company. These loans are non-interest bearing, are due on demand and as such included in current liabilities. Imputed interest has been considered, but determined to be immaterial to the financial statements as a whole.

 

On August 8, 2015, the Company entered into a convertible note payable for $15,784 in exchange for the related party payable incurred from expenses paid on behalf of the Company. The note carries interest at a rate of 6% per annum, is due on August 24, 2016 and may be converted into common stock of the Company at the option of the noteholder at a rate of $.01 per share. The beneficial conversion feature in the note created a debt discount of $15,784 of which $5,535 was recognized during the year ended December 31, 2015 leaving an unamortized discount of $10,249 as of December 31, 2015 that will be recognized over the remaining life of the note. There was $10,634 of interest plus accrued interest totaling $360 due as of December 31, 2015.

XML 21 R12.htm IDEA: XBRL DOCUMENT v3.4.0.3
Excess Cost of Prepaid Royalties Over Value
12 Months Ended
Dec. 31, 2015
Notes to Financial Statements  
Note 6 - Excess Cost of Prepaid Royalties Over Value

During the year ended December 31, 2014, the Company issued a total of 120,000 preferred shares of $1 par value Series A convertible preferred stock. The shares carried a value of $160,105 resulting in an immediate excess payment over value of $160,105 based on the Company's determination that it may not realize value for the prepayment resulting in a full charge-off to operations for $160,105.

 

During the year ended December 31, 2015, the Company issued a total of 100,000 preferred shares of $1 par value Series A convertible preferred stock. The shares carried a value of $199,607 resulting in an immediate excess payment over value of $199,607 based on the Company's determination that it may not realize value for the prepayment resulting in a full charge-off to operations for $199,607.

XML 22 R13.htm IDEA: XBRL DOCUMENT v3.4.0.3
Notes Payable
12 Months Ended
Dec. 31, 2015
Notes to Financial Statements  
Note 7 - Notes Payable

During the year ended December 31, 2015, the Company entered into a note payable with an unrelated party as a settlement for payment of consulting services provided valued at $350,000. The note carries interest of 9% compounded annually and is due on November 19, 2016. There was $350,000 of principal and $19,504 of accrued interest due as of December 31, 2015. Accrued interest payable is included in "accounts payable and accrued liabilities" on the balance sheet.

XML 23 R14.htm IDEA: XBRL DOCUMENT v3.4.0.3
Convertible Notes Payable
12 Months Ended
Dec. 31, 2015
Notes to Financial Statements  
Note 8 - Convertible Notes Payable

During the year ended December 31, 2015, the Company entered into a convertible note payable with an unrelated party resulting in net cash proceeds to the Company totaling $19,700. The note is convertible into common stock of the Company at the option of the noteholder at a rate of $0.01 per share. The Company measured the value of the beneficial conversion feature of the note and recorded a discount equal to the face value of the note on the date of issuance. The discount will be recognized ratably over the life of the note through the due date as shown below. A summary of the outstanding convertible note payable as of December 31, 2015 follows:

 

    Due Date   Principal     Discount     Net Value  
                             
Noteholder 1   9/1/2016   $ 16,700     $ (12,835 )   $ 3,865  
Total       $ 16,700     $ (12,835 )   $ 3,865  

 

XML 24 R15.htm IDEA: XBRL DOCUMENT v3.4.0.3
Subsequent Events
12 Months Ended
Dec. 31, 2015
Notes to Financial Statements  
Note 9 - Subsequent Events

We have evaluated subsequent events through the date of this filing and determined there are no additional events to disclose.

XML 25 R16.htm IDEA: XBRL DOCUMENT v3.4.0.3
Significant Accounting Policies (Policies)
12 Months Ended
Dec. 31, 2015
Significant Accounting Policies Policies  
Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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.

Cash

For the Statements of Cash Flows, all highly liquid investments with maturity of three months or less are considered to be cash equivalents.  There were no cash equivalents as of December 31, 2015 or 2014.

Income taxes

Income taxes are provided for using the liability method of accounting in accordance with FASB ASC Topic 740 (formally SFAS No. 109 "Accounting for Income Taxes").  A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting.  Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis.  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 effect of changes in tax laws and rates on the date of enactment.

Revenue Recognition

Revenue is recognized when persuasive evidence of an agreement exists, the price is fixed or determinable, goods are delivered or services performed and collectability is reasonably assured. The Company did not generate any revenues during the years ended December 31, 2015 or 2014.

Convertible debt

The Company records a beneficial conversion feature related to the issuance of convertible debts that have conversion features at fixed or adjustable rates. The beneficial conversion feature for the convertible instruments is recognized and measured by allocating a portion of the proceeds as an increase in additional paid-in capital and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features. The beneficial conversion feature will be accreted by recording additional non-cash interest expense over the expected life of the convertible notes.

Share Based Expenses

The Company complies with FASB ASC Topic 718 Compensation—Stock Compensation, which establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that is based on the fair value of the entity's equity instruments or that may be settled by the issuance of those equity instruments. FASB ASC Topic 718 primarily focuses on accounting for transactions in which an entity obtains employee services in share-based payment transactions. This statement requires a public entity to expense the cost of employee services received in exchange for an award of equity instruments. This statement also provides guidance on valuing and expensing these awards, as well as disclosure requirements of these equity arrangements. The Company adopted FASB ASC Topic 718 upon formation of the Company and expenses share based costs in the period incurred.

Going concern

The Company's financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern.  This contemplates the realization of assets and the liquidation of liabilities in the normal course of business.  Currently, the Company has no cash, no material assets, accumulated losses of $3,428,812, a working capital deficit of $118,891, nor does it have operations or a source of revenue sufficient to cover its operation costs and allow it to continue as a going concern.  The Company will be dependent upon the raising of additional capital through placement of our common stock in order to implement its business plan, or merge with an operating company.  There can be no assurance that the Company will be successful in either situation in order to continue as a going concern.  The officers and directors have committed to advancing certain operating costs of the Company.

Valuation of Investments in Securities and Securities at fair value – Definition and Hierarchy

FASB ASC 820-10-15 defines fair value, thereby eliminating inconsistencies in guidance found in various prior accounting pronouncements, and increases disclosures surrounding fair value calculations. FASB ASC 820-10-15 establishes a three-tiered fair value hierarchy that prioritizes inputs to valuation techniques used in fair value calculations. The three levels of inputs are defined as follows:

 

Level 1 – unadjusted quoted prices for identical assets or liabilities in active markets accessible by the Company at the measurement date.

 

Level 2 – inputs that are observable in the marketplace other than those inputs classified as Level 1.

 

Level 3 – inputs that are unobservable in the marketplace and significant to the valuation.

 

The Company has no assets or liabilities that are required to be carried at fair value. Accounts payable and related party payables have fair values that approximate the carrying value due to the short term nature of these instruments.

Recent Accounting Pronouncements

Recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not, or are not believed by management to, have a material impact on the Company's present or future consolidated financial statements.

Net loss per common share

Net loss per share is calculated in accordance with FASB ASC Topic 260 (formerly SFAS No. 128, Earnings Per Share). The weighted-average number of common shares outstanding during each period is used to compute basic loss per share. Diluted loss per share is computed using the weighted average number of shares and dilutive potential common shares outstanding. Dilutive potential common shares are additional common shares assumed to be exercised. Basic net loss per common share is based on the weighted average number of shares of common stock outstanding during the periods presented. The Company had 84,668,400 common stock equivalents that were excluded from earnings per share due to the anti-dilutive nature.

 

XML 26 R17.htm IDEA: XBRL DOCUMENT v3.4.0.3
Income Taxes (Tables)
12 Months Ended
Dec. 31, 2015
Income Taxes Tables  
Schedule of deferred income tax assets
    December 31,
2015
    December 31,
2014
 
Net operating loss carry forward   $ 748,640     $ 318,139  
Applicable Canadian Federal and Provincial tax rates     26.5 %     26.5 %
Deferred tax asset     198,390       84,307  
Valuation allowance     (198,390 )     (84,307 )
Net deferred tax asset   $ -     $ -  
Schedule of income Taxes
    December 31,
2015
    December 31,
2014
 
                 
Tax benefit at United States Federal statutory rate (35%)   $ 220,538     $ 65,221  
Differences in U.S. and Canadian tax rates on provision     (36,592 )     (15,839 )
Non-deductible losses-prepaids     (69,862 )     (42,428 )
Increase in valuation allowance     (114,083 )     (6,954 )
Income tax provision   $ -     $ -  
XML 27 R18.htm IDEA: XBRL DOCUMENT v3.4.0.3
Convertible Notes Payable (Tables)
12 Months Ended
Dec. 31, 2015
Convertible Notes Payable Tables  
Summary of the outstanding convertible notes payable
    Due Date   Principal     Discount     Net Value  
                             
Noteholder 1   9/1/2016   $ 16,700     $ (12,835 )   $ 3,865  
Total       $ 16,700     $ (12,835 )   $ 3,865  
XML 28 R19.htm IDEA: XBRL DOCUMENT v3.4.0.3
Stockholders' Equity (Details Narrative) - USD ($)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dividends payable $ 19,000
Conversion of preferred shares to common shares, Amount  
Common stock issued for cash, Amount $ 45,000  
Common stock; shares authorized 275,000,000 275,000,000
Common stock; shares issued 142,162,211 3,136,000
Common stock; shares outstanding 141,782,211 2,756,000
Common Stock    
Recession of common shares (730,000)  
Conversion of preferred shares to common shares, Amount $ 138,830  
Issuance of common shares for rounding in stock split, Shares 26,211  
Common stock issued for cash, Amount $ 900  
Common stock issued for cash, Shares 900,000  
Series A convertible preferred Stock [Member]    
Repayment of royalty to related party $ 100,000 $ 120,000
Repayment of royalty to related party value $ 0 $ 120,000
Series A convertible preferred stock; shares issued 81,170 120,000
Series A convertible preferred stock; shares outstanding 81,170 120,000
Conversion of preferred shares to common shares 138,830,000  
XML 29 R20.htm IDEA: XBRL DOCUMENT v3.4.0.3
Income Taxes (Details) - USD ($)
Dec. 31, 2015
Dec. 31, 2014
Income Taxes Details    
Net operating loss carry forward $ 748,640 $ 318,139
Applicable Canadian Federal and Provincial tax rates 26.50% 26.50%
Deferred tax asset $ 198,390 $ 84,307
Valuation allowance $ (198,390) $ (84,307)
Net deferred tax asset
XML 30 R21.htm IDEA: XBRL DOCUMENT v3.4.0.3
Income Taxes (Details 1) - USD ($)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Income Taxes Details 1    
Tax benefit at United States Federal statutory rate (35%) $ 220,538 $ 65,221
Differences in U.S. and Canadian tax rates on provision (36,592) (15,839)
Non-deductible losses-prepaids (69,862) (42,428)
Increase in valuation allowance $ (114,083) $ (6,954)
Income tax provision
XML 31 R22.htm IDEA: XBRL DOCUMENT v3.4.0.3
Income Taxes (Details Narrative) - USD ($)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Income Taxes Details Narrative    
Net operating loss carryforwards $ 430,501 $ 19,869
United States federal statutory rate 35.00%  
Net operating loss carryforwards, expiration date 2026  
Valuation allowance $ 114,083 $ 6,954
XML 32 R23.htm IDEA: XBRL DOCUMENT v3.4.0.3
Related Party Transactions (Details Narrative) - USD ($)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Related Party Transactions Details Narrative    
Unamortized discount $ 10,249 $ 0
Accrued interest 10,634  
Proceeds from related party loans 5,535  
Related party payables 360  
Expenses paid on behalf of company by related parties $ 15,784 $ 18,035
XML 33 R24.htm IDEA: XBRL DOCUMENT v3.4.0.3
Excess Cost of Prepaid Royalties Over Value (Details Narrative) - $ / shares
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Series A convertible preferred stock; par value $ 1.00 $ 1.00
Series A convertible preferred Stock [Member]    
Series A convertible preferred stock; par value $ 1.00 $ 1.00
Share issued 100,000  
XML 34 R25.htm IDEA: XBRL DOCUMENT v3.4.0.3
Notes Payable (Details Narrative)
12 Months Ended
Dec. 31, 2015
USD ($)
Notes Payable Details Narrative  
Note payable entered into for professional fees $ 350,000
Accrued interest $ 19,504
XML 35 R26.htm IDEA: XBRL DOCUMENT v3.4.0.3
Convertible Notes Payable (Details) - USD ($)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Principal $ 16,700  
Discount (12,835)  
Net Value $ 3,865
Noteholder 1 [Member]    
Due Date 9/1/2016  
Principal $ 16,700  
Discount (12,835)  
Net Value $ 3,865  
XML 36 R27.htm IDEA: XBRL DOCUMENT v3.4.0.3
Convertible Notes Payable (Details Narrative) - USD ($)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Convertible Notes Payable Details Narrative    
Proceeds from convertible notes payable $ 19,700
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