Nevada
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26-2137574
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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8800 N. Gainey Dr., Suite 270
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Scottsdale, Arizona
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85258
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer ¨
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Accelerated filer ¨
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Non-accelerated filer ¨ (Do not check if a smaller reporting company)
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Smaller reporting company x
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Page No.
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PART I - FINANCIAL INFORMATION
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Item 1.
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Financial Statements
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1
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Item 2.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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10
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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17
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Item 4.
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Controls and Procedures
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18
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PART II - OTHER INFORMATION
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Item 1.
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Legal Proceedings
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19
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Item1A.
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Risk Factors
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19
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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19
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Item 3.
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Defaults Upon Senior Securities
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20
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Item 4.
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Mine Safety Disclosures
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20
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Item 5.
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Other Information
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21
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Item 6.
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Exhibits
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21
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Signature
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22
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BOLLENTE COMPANIES, INC.
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||||||||
CONSOLIDATED BALANCE SHEETS
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||||||||
(unaudited)
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||||||||
March 31,
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December 31,
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|||||||
2016
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2015
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|||||||
ASSETS
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||||||||
Current assets:
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||||||||
Cash
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$ | 1,589 | $ | 3,618 | ||||
Accounts receivable
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90,025 | 72,533 | ||||||
Inventory
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134,312 | 222,537 | ||||||
Prepaid expenses
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189,183 | 205,886 | ||||||
Prepaid stock compensation
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219,375 | 306,217 | ||||||
Total current assets
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634,484 | 810,791 | ||||||
Fixed assets, net
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4,783 | 5,885 | ||||||
Other assets:
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||||||||
Security deposits
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1,500 | 1,500 | ||||||
Trademarks
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10,464 | 8,083 | ||||||
Prepaid stock compensation - long term portion
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63,889 | - | ||||||
Software
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10,000 | 10,000 | ||||||
Website
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16,277 | 21,160 | ||||||
Total other assets
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102,130 | 40,743 | ||||||
Total assets
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$ | 741,397 | $ | 857,419 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
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||||||||
Current liabilities:
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||||||||
Accounts payable
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$ | 605,614 | $ | 620,910 | ||||
Credit cards
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24,707 | 15,971 | ||||||
Customer deposits
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600 | 600 | ||||||
Accrued salaries - related party
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50,476 | 26,040 | ||||||
Accrued payroll taxes
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13,419 | 11,984 | ||||||
Notes payable - related party
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600 | 600 | ||||||
Notes payable - related party, net of debt discount
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197,500 | 195,000 | ||||||
Line of credit - related party
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17,500 | 16,000 | ||||||
Accrued interest payable
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4 | 4 | ||||||
Accrued interest payable - related party
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2,819 | 4,316 | ||||||
Total current liabilities
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913,239 | 891,425 | ||||||
Long-term liabilities:
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||||||||
Notes payable - related party
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233,000 | 233,000 | ||||||
Total long-term liabilities
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233,000 | 233,000 | ||||||
Total liabilities
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1,146,239 | 1,124,425 | ||||||
Stockholders' equity (deficit):
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||||||||
Preferred stock, $0.001 par value, 10,000,000 shares
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||||||||
authorized, no shares issued and outstanding
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||||||||
as of March 31, 2016 and December 31, 2015, respectively
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- | - | ||||||
Common stock, $0.001 par value, 100,000,000 shares
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||||||||
authorized, 20,818,186 and 19,350,182 shares issued and outstanding
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as of March 31, 2016 and December 31, 2015, respectively
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20,819 | 19,351 | ||||||
Additional paid-in capital
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18,255,354 | 16,763,822 | ||||||
Subscriptions payable
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180,000 | 750,000 | ||||||
Accumulated deficit
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(18,861,015 | ) | (17,800,179 | ) | ||||
Total stockholders' equity (deficit)
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(404,842 | ) | (267,006 | ) | ||||
Total liabilities and stockholders' equity (deficit)
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$ | 741,397 | $ | 857,419 |
BOLLENTE COMPANIES, INC.
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||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS
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||||||||
(unaudited)
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||||||||
For the three months ended
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March 31,
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||||||||
2016
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2015
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|||||||
Revenue
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$ | 115,524 | $ | 60,904 | ||||
Cost of goods sold
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(99,143 | ) | (77,933 | ) | ||||
Gross profit
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16,381 | (17,029 | ) | |||||
Operating expenses:
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||||||||
General and administrative
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445,354 | 317,600 | ||||||
Executive compensation
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48,750 | 108,750 | ||||||
Research and development
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931 | 124,758 | ||||||
Professional fees
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566,106 | 443,805 | ||||||
Total operating expenses
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1,061,141 | 994,913 | ||||||
Other income(expenses):
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||||||||
Other income
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193 | - | ||||||
Interest expense - related party
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(15,503 | ) | (1,966 | ) | ||||
Interest expense
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(766 | ) | - | |||||
Total other income(expenses)
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(16,076 | ) | (1,966 | ) | ||||
Net loss
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$ | (1,060,836 | ) | $ | (1,013,908 | ) | ||
Net loss per common share - basic
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$ | (0.05 | ) | $ | (0.06 | ) | ||
Weighted average number of common shares
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20,229,284 | 17,236,321 | ||||||
outstanding - basic
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BOLLENTE COMPANIES, INC.
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CONSOLIDATED STATEMENTS OF CASH FLOWS
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(unaudited)
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For the three months ended
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March 31,
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||||||||
2016
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2015
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CASH FLOWS FROM OPERATING ACTIVITIES
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Net loss
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$ | (1,060,836 | ) | $ | (1,013,908 | ) | ||
Adjustments to reconcile net loss from continuing operations
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to net cash used in operating activities from continuing operations:
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Shares issued for services
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463,000 | 204,600 | ||||||
Depreciation
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1,102 | 1,004 | ||||||
Shares issued for employment agreement
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280,000 | 130,000 | ||||||
Shares issued for prepaid stock compensation
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22,953 | 53,875 | ||||||
Amortization of website costs
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4,883 | 4,883 | ||||||
Amortization of debt discount
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2,500 | - | ||||||
Changes in operating assets and liabilities:
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||||||||
(Increase) decrease in accounts receivable
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(17,492 | ) | (11,336 | ) | ||||
(Increase) decrease in inventory
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88,225 | 68,703 | ||||||
(Increase) decrease in prepaid expenses
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16,703 | 16,370 | ||||||
(Increase) in other receivables
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- | (17,173 | ) | |||||
Increase in accounts payable
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(18,745 | ) | (9,300 | ) | ||||
Increase in accounts payable - related party
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3,449 | - | ||||||
Increase in credit card
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8,736 | 6,841 | ||||||
Increase in accrued salaries
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- | 2,074 | ||||||
Increase in accrued salaries - related party
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24,436 | 15,615 | ||||||
Increase in accrued payroll taxes
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1,435 | 53 | ||||||
Increase in accrued interest payable - related party
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(1,497 | ) | 1,907 | |||||
Net cash used in operating activities
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(181,148 | ) | (545,792 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES
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Purchase trademarks
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(2,381 | ) | - | |||||
Net cash used in investing activities
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(2,381 | ) | - | |||||
CASH FLOWS FROM FINANCING ACTIVITIES
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||||||||
Proceeds from notes payable
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- | 200,000 | ||||||
Repayments from notes payable
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- | (10,050 | ) | |||||
Proceeds from line of credit - related party
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12,000 | - | ||||||
Repayments of line of credit - related party
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(10,500 | ) | - | |||||
Proceeds from sale of common stock, net of offering costs
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155,000 | 325,000 | ||||||
Proceeds from royalty payments
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25,000 | - | ||||||
Net cash provided by financing activities
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181,500 | 514,950 | ||||||
NET CHANGE IN CASH
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(2,029 | ) | (30,842 | ) | ||||
CASH AT BEGINNING OF THE PERIOD
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3,618 | 40,446 | ||||||
CASH AT END OF THE PERIOD
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$ | 1,589 | $ | 9,604 | ||||
SUPPLEMENTAL INFORMATION:
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Interest paid
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$ | 14,500 | $ | - | ||||
Non-cash investing and financing activities:
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||||||||
Shares issued for prepaid stock compensation
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$ | 100,000 | $ | 164,600 |
March 31,
2016
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December 31, 2015
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Raw materials
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$ | 42,061 | $ | 42,061 | ||||
Finished goods
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92,251 | 180,476 | ||||||
Total
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$ | 134,312 | $ | 222,537 |
March 31,
2016
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December 31, 2015
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Website
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$ | 58,598 | $ | 58,598 | ||||
Less: Accumulated amortization
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(42,321 | ) | (37,438 | ) | ||||
Website, net
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$ | 16,277 | $ | 21,160 |
March 31,
2016
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December 31, 2015
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Note payable to an officer, director and shareholder, unsecured, 0% interest, due upon demand
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$ | 600 | $ | 600 | ||||
Note payable from a shareholder, secured, 12% interest, due June 2016
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197,500 | 195,000 | ||||||
Notes Payable – Current
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$ | 198,100 | $ | 195,600 |
March 31,
2016
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December 31, 2015
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Note payable from a shareholder, secured, 12% interest, due March 2017
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$ | 200,000 | $ | 200,000 | ||||
Note payable, to an officer, director and shareholder,
secured, 5% interest, due April 2017
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33,000 | 33,000 | ||||||
Notes payable – Long Term
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$ | 233,000 | $ | 233,000 |
·
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our ability to diversify our operations;
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·
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inability to raise additional financing for working capital;
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·
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the fact that our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require our management to make estimates about matters that are inherently uncertain;
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·
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our ability to attract key personnel;
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·
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our ability to operate profitably;
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·
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deterioration in general or regional economic conditions;
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·
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adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;
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·
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changes in U.S. GAAP or in the legal, regulatory and legislative environments in the markets in which we operate;
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·
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the inability of management to effectively implement our strategies and business plan;
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·
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inability to achieve future sales levels or other operating results;
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·
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the unavailability of funds for capital expenditures;
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·
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other risks and uncertainties detailed in this report;
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Three months ended
March 31,
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|||||||||
2016
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2015
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||||||||
Net cash used in operating activities
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$ | (181,148 | ) | $ | (545,792 | ) | |||
Net cash used in investing activities
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(2,381 | ) | - | ||||||
Net cash provided by financing activities
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181,500 | 514,950 | |||||||
Net increase/(decrease) in Cash
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(2,029 | ) | (30,842 | ) | |||||
Cash, beginning
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3,618 | 40,446 | |||||||
Cash, ending
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$ | 1,589 | $ | 9,604 |
Exhibit No.
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Description
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31.1
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Certification of Chief Executive Officer and Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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32.1
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Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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101.INS*
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XBRL Instance Document
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101.SCH*
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XBRL Taxonomy Extension Schema
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101.CAL*
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XBRL Taxonomy Extension Calculation Linkbase
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101.DEF*
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XBRL Taxonomy Extension Definition Linkbase
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101.LAB*
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XBRL Taxonomy Extension Label Linkbase
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101.PRE*
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XBRL Taxonomy Extension Presentation Linkbase
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Robertson J. Orr
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Robertson J. Orr
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President, Principal Financial Officer, and
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Principal Executive Officer
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June 6, 2016
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Document and Entity Information |
3 Months Ended |
---|---|
Mar. 31, 2016
shares
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Document And Entity Information | |
Entity Registrant Name | Bollente Companies Inc. |
Entity Central Index Key | 0001429393 |
Document Type | 10-Q |
Entity Trading Symbol | BOLC |
Document Period End Date | Mar. 31, 2016 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Is Entity a Well-known Seasoned Issuer? | No |
Is Entity a Voluntary Filer? | No |
Is Entity's Reporting Status Current? | Yes |
Entity Filer Category | Smaller Reporting Company |
Entity Common Stock, Shares Outstanding | 0 |
Document Fiscal Period Focus | Q1 |
Document Fiscal Year Focus | 2016 |
CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 20,818,186 | 19,350,182 |
Common stock, shares outstanding | $ 20,818,186 | $ 19,350,182 |
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Income Statement [Abstract] | ||
Revenue | $ 115,524 | $ 60,904 |
Cost of goods sold | (99,143) | (77,933) |
Gross profit | 16,381 | (17,029) |
Operating expenses: | ||
General and administrative | 445,354 | 317,600 |
Executive compensation | 48,750 | 108,750 |
Research and development | 931 | 124,758 |
Professional fees | 566,106 | 443,805 |
Total operating expenses | 1,061,141 | $ 994,913 |
Other income(expenses): | ||
Other income | 193 | |
Interest expense - related party | (15,503) | $ (1,966) |
Interest expense | (766) | |
Total other income(expenses) | (16,076) | $ (1,966) |
Net loss | $ (1,060,836) | $ (1,013,908) |
Basic earnings per share | ||
Net loss per common share - basic | $ (0.05) | $ (0.06) |
Weighted average number of common shares outstanding - basic | 20,229,284 | 17,236,321 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation The interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.
These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management, are necessary for a fair presentation of the information contained therein. It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company for the years ended December 31, 2014 and 2013 and notes thereto included in the Companys 10-K annual report. The Company follows the same accounting policies in the preparation of interim reports.
Principles of consolidation The consolidated financial statements include the accounts of Bollente Companies, Inc. and its wholly owned subsidiaries. On May 16, 2010, the Company acquired 100% of the outstanding stock of Bollente, Inc. On the date of acquisition, Bollente, Inc. was 2.78% owned and controlled 100% by Robertson J. Orr, a majority shareholder and officer and director of Bollente Companies, Inc. and the acquisition was accounted for by means of a pooling of the entities from the date of inception of Bollente Companies, Inc. on March 7, 2008 because the entities were under common control. On August 13, 2015, the Company formed a wholly owned subsidiary, Bollente International, Inc. All significant inter-company transactions and balances have been eliminated.
Use of 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 revenue and expenses during the reporting period. Actual results could differ significantly from those estimates.
Cash and cash equivalents For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value.
Website The Company capitalizes the costs associated with the development of the Companys website pursuant to ASC Topic 350. Other costs related to the maintenance of the website are expensed as incurred. Amortization is provided over the estimated useful lives of 3 years using the straight-line method for financial statement purposes. The Company plans to commence amortization upon completion and release of the Companys fully operational website.
Stock-based compensation The Company records stock based compensation in accordance with the guidance in ASC Topic 505 and 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.
The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718-10 and the conclusions reached by the FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50.
Earnings per share The Company follows ASC Topic 260 to account for the earnings per share. Basic earning per common share (EPS) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earning per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.
Inventory Inventories are stated at the lower of cost (average cost) or market (net realizable value).
Revenue recognition The Company records revenue when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectability is probable. The Company records revenue from the sale of product upon shipment or delivery of the products to the customer. The Company also records the shipping income when the products are sent to the customer.
Fair value of financial instruments Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2014. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.
Level 1: The preferred inputs to valuation efforts are quoted prices in active markets for identical assets or liabilities, with the caveat that the reporting entity must have access to that market. Information at this level is based on direct observations of transactions involving the same assets and liabilities, not assumptions, and thus offers superior reliability. However, relatively few items, especially physical assets, actually trade in active markets.
Level 2: FASB acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. To deal with this shortage of direct data, the board provided a second level of inputs that can be applied in three situations.
Level 3: If inputs from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as unobservable, and limits their use by saying they shall be used to measure fair value to the extent that observable inputs are not available. This category allows for situations in which there is little, if any, market activity for the asset or liability at the measurement date. Earlier in the standard, FASB explains that observable inputs are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants. |
GOING CONCERN |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Notes to Financial Statements | |
GOING CONCERN | NOTE 2 GOING CONCERN
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. As a result, the Company incurred accumulated net losses for the three months ended March 31, 2016 of ($18,861,015). In addition, the Companys development activities since inception have been financially sustained through debt and equity financing.
The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating revenues. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty. |
INVENTORY |
3 Months Ended | ||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 | |||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||
INVENTORY | NOTE 3 INVENTORY
Inventories consist of the following at:
|
WEBSITE |
3 Months Ended | |||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 | ||||||||||||||||||||||||||||||||||||
Research and Development [Abstract] | ||||||||||||||||||||||||||||||||||||
WEBSITE | NOTE 4 WEBSITE
Website consists of the following at:
Amortization expense for the three months ended March 31, 2016 and 2015 was $4,883 and $4,883, respectively.
|
NOTES PAYABLE - RELATED PARTY |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES PAYABLE- RELATED PARTY | NOTE 5 NOTES PAYABLE RELATED PARTY
Notes payable consist of the following at:
Interest expense from continuing operations for the three months ended March 31, 2016 and 2015 was $16,076 and $1,966, respectively.
NOTE 6 ROYALTY PAYMENTS
The Company has agreed to allow accredited investors the ability to receive a royalty on products sold in an effort to fund its distribution and marketing advances internationally by purchasing units. Each unit represents 0.625% royalty interest in the Gross Margin of product sold by Bollente International, Inc., costing $25,000 per unit. As of March 31, 2016, twenty-six units have been sold totaling $650,000. This amount is included in additional paid in capital since there is no obligation to repay the funds. |
ROYALTY PAYMENTS |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Royalty Payments | |
ROYALTY PAYMENTS | NOTE 6 ROYALTY PAYMENTS
The Company has agreed to allow accredited investors the ability to receive a royalty on products sold in an effort to fund its distribution and marketing advances internationally by purchasing units. Each unit represents 0.625% royalty interest in the Gross Margin of product sold by Bollente International, Inc., costing $25,000 per unit. As of March 31, 2016, twenty-six units have been sold totaling $650,000. This amount is included in additional paid in capital since there is no obligation to repay the funds. |
STOCKHOLDERS' EQUITY |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 7 STOCKHOLDERS EQUITY
The Company is authorized to issue 10,000,000 shares of it $0.001 par value preferred stock and 100,000,000 shares of its $0.001 par value common stock.
On Feburary 2, 2016, the Company issued 120,000 shares of common stock for cash received of $120,000, of which $100,000 of the funds were received as of December 31, 2015 and recorded as stock payable.
On Feburary 2, 2016, the Company issued 690,000 shares of common stock for services performed of $690,000, of which $530,000 was expensed as of December 31, 2015 and recorded as stock payable.
On February 2, 2016, the Company issued 250,000 shares of common stock owed to an employee of the Company as a bonus totaling $250,000.
On Feburary 10, 2016, the Company issued 105,000 shares of common stock for cash received of $105,000, of which $60,000 of the funds were received as of December 31, 2015 and recorded as stock payable.
On February 22, 2016, the Company issued 303,000 shares of common stock for services totaling $303,000.
In March 2016, the Company sold 90,000 shares of common stock to three investors for cash totaling $90,000 and are recorded to stock payable. As of the date of this filing, the shares have not been issued.
On March 31, 2016, the Company recorded a stock payable totaling $30,000 for 30,000 shares of common stock earned by the President of the Company as part of their employment agreement. |
PREPAID STOCK COMPENSATION |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Notes to Financial Statements | |
PREPAID STOCK COMPENSATION | NOTE 9 PREPAID STOCK COMPENSATION
During the three month ended March 31, 2016, the Company issued a total of 100,000 shares of common stock as part of a consulting agreement totaling $100,000. The value of the shares was recorded as prepaid expense and is being amortized over three years which is the related service period of the agreement.
For the three months ended March 31, 2016, the Company expensed $222,953 as professional fees with a remaining prepaid expense amount totaling $283,264 at March 31, 2016.
|
AGREEMENTS |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Notes to Financial Statements | |
AGREEMENTS | NOTE 10 AGREEMENTS
Lease agreement In January 2015, the Company executed a sublease agreement with Perigon Companies, LLC, a related party. The lease term is one year at a rate of $4,000 per month with an option to continue on a month to month basis. The Company paid a refundable security deposit of $1,500.
In January 2015, the Company executed a sublease agreement with Templar Asset Group, LLC, a related party. The lease term is one year at a rate of $2,800 per month with an option to continue on a month to month basis. The Company was not required to pay a security deposit.
Rent expense for the three months ended March 31, 2016 and 2015 was $20,400 and $24,677, respectively. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.
These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management, are necessary for a fair presentation of the information contained therein. It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company for the years ended December 31, 2014 and 2013 and notes thereto included in the Companys 10-K annual report. The Company follows the same accounting policies in the preparation of interim reports. |
Principles of consolidation | Principles of consolidation The consolidated financial statements include the accounts of Bollente Companies, Inc. and its wholly owned subsidiaries. On May 16, 2010, the Company acquired 100% of the outstanding stock of Bollente, Inc. On the date of acquisition, Bollente, Inc. was 2.78% owned and controlled 100% by Robertson J. Orr, a majority shareholder and officer and director of Bollente Companies, Inc. and the acquisition was accounted for by means of a pooling of the entities from the date of inception of Bollente Companies, Inc. on March 7, 2008 because the entities were under common control. On August 13, 2015, the Company formed a wholly owned subsidiary, Bollente International, Inc. All significant inter-company transactions and balances have been eliminated. |
Use of estimates | Use of 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 revenue and expenses during the reporting period. Actual results could differ significantly from those estimates. |
Cash and cash equivalents | Cash and cash equivalents For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value. |
Website | Website The Company capitalizes the costs associated with the development of the Companys website pursuant to ASC Topic 350. Other costs related to the maintenance of the website are expensed as incurred. Amortization is provided over the estimated useful lives of 3 years using the straight-line method for financial statement purposes. The Company plans to commence amortization upon completion and release of the Companys fully operational website. |
Stock-based compensation | Stock-based compensation The Company records stock based compensation in accordance with the guidance in ASC Topic 505 and 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.
The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718-10 and the conclusions reached by the FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50. |
Earnings per share | Earnings per share The Company follows ASC Topic 260 to account for the earnings per share. Basic earning per common share (EPS) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earning per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation. |
Inventory | Inventory Inventories are stated at the lower of cost (average cost) or market (net realizable value). |
Revenue recognition | Revenue recognition The Company records revenue when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectability is probable. The Company records revenue from the sale of product upon shipment or delivery of the products to the customer. The Company also records the shipping income when the products are sent to the customer. |
Fair value of financial instruments | Fair value of financial instruments Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2014. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.
Level 1: The preferred inputs to valuation efforts are quoted prices in active markets for identical assets or liabilities, with the caveat that the reporting entity must have access to that market. Information at this level is based on direct observations of transactions involving the same assets and liabilities, not assumptions, and thus offers superior reliability. However, relatively few items, especially physical assets, actually trade in active markets.
Level 2: FASB acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. To deal with this shortage of direct data, the board provided a second level of inputs that can be applied in three situations.
Level 3: If inputs from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as unobservable, and limits their use by saying they shall be used to measure fair value to the extent that observable inputs are not available. This category allows for situations in which there is little, if any, market activity for the asset or liability at the measurement date. Earlier in the standard, FASB explains that observable inputs are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants. |
INVENTORY (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 | |||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||
INVENTORY |
|
WEBSITE (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 | ||||||||||||||||||||||||||||||||||||
Research and Development [Abstract] | ||||||||||||||||||||||||||||||||||||
Summary of website and its amortization expense |
|
NOTES PAYABLE - RELATED PARTY (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of notes payable |
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Estimated useful lives of website | 3 years |
GOING CONCERN (Details Narrative) |
3 Months Ended |
---|---|
Mar. 31, 2016
USD ($)
| |
Notes to Financial Statements | |
Incurred accumulated net losses | $ (18,861,015) |
INVENTORY (Details) - USD ($) |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 42,061 | $ 42,061 |
Finished goods | 92,251 | 180,476 |
Total | $ 134,312 | $ 222,537 |
WEBSITE (Details) - USD ($) |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Research and Development [Abstract] | ||
Website | $ 58,598 | $ 58,598 |
Less: Accumulated amortization | (42,321) | (37,438) |
Website, net | $ 16,277 | $ 21,160 |
WEBSITE (Details Narrative) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Research and Development [Abstract] | ||
Amortization expense | $ 4,883 | $ 4,883 |
NOTES PAYABLE - RELATED PARTY (Details) - USD ($) |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Debt Disclosure [Abstract] | ||
Note payable to an officer, director and shareholder, unsecured, 0% interest, due upon demand | $ 600 | $ 600 |
Note payable from a shareholder, secured, 12% interest, due June 2016 | 197,500 | 195,000 |
Notes Payable - Current | 198,100 | 195,600 |
Note payable from a shareholder, secured, 12% interest, due March 2017 | 200,000 | 200,000 |
Note payable, to an officer, director and shareholder, secured, 5% interest, due April 2017 | 33,000 | 33,000 |
Notes payable - Long Term | $ 233,000 | $ 233,000 |
NOTES PAYABLE - RELATED PARTY (Details Narrative) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Debt Disclosure [Abstract] | ||
Interest expense from continuing operations | $ 16,076 | $ 1,966 |
ROYALTY PAYMENTS (Details Narrative) |
Mar. 31, 2016
USD ($)
|
---|---|
Royalty Payments | |
Additional paid in capital | $ 650,000 |
STOCKHOLDERS’ EQUITY (DEFICIT) (Details Narrative) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Dec. 31, 2015 |
|
Stockholders Equity Deficit Details Narrative | |||
Authorized to issue shares | 10,000,000 | 10,000,000 | |
Preferred stock par value | $ 0.001 | $ 0.001 | |
Common stock shares | 100,000,000 | 100,000,000 | |
Common stock par value | $ 0.001 | $ 0.001 | |
Stock payables | $ 30,000 | ||
Stock payable shares | 30,000 | ||
Common stock for cash | $ 90,000 | ||
Common stock for cash, Shares | 90,000 | ||
Common stock for services, Value | $ 463,000 | $ 204,600 |
PREPAID STOCK COMPENSATION (Details Narrative) - USD ($) |
3 Months Ended | |
---|---|---|
Jun. 30, 2015 |
Mar. 31, 2016 |
|
Prepaid expense amount total | $ 283,264 | |
Consulting Services [Member] | ||
Professional fees | $ 222,953 |
AGREEMENTS (Details Narrative) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Banking and Thrift [Abstract] | ||
Rent expense | $ 20,400 | $ 24,677 |
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