0001683168-19-001660.txt : 20190521 0001683168-19-001660.hdr.sgml : 20190521 20190521081453 ACCESSION NUMBER: 0001683168-19-001660 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 44 CONFORMED PERIOD OF REPORT: 20190331 FILED AS OF DATE: 20190521 DATE AS OF CHANGE: 20190521 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Teardroppers, Inc. CENTRAL INDEX KEY: 0001615780 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ADVERTISING [7310] IRS NUMBER: 462407247 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 333-197889 FILM NUMBER: 19840872 BUSINESS ADDRESS: STREET 1: 3500 75TH STREET WEST, STE. SWS CITY: ROSAMOND STATE: CA ZIP: 93650 BUSINESS PHONE: 949-751-2173 MAIL ADDRESS: STREET 1: 3500 75TH STREET WEST, STE. SWS CITY: ROSAMOND STATE: CA ZIP: 93650 10-Q 1 teardroppers_10q-033119.htm FORM 10-Q

Table of Contents

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

x        QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2019

 

o        TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

 

For the transition period from ___________ to _______________

 

Commission file number 333-177792

 

THE TEARDROPPERS, INC.

(Exact name of small business issuer as specified in its charter)

 

Nevada 20-4168979
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)

 

620 Newport Center Drive Suite 1100

Newport Beach, Ca. 92660

(Address of principal executive offices)

 

949-751-2173

(Issuer’s telephone number)

_______________________________________________

(Former name, former address and former fiscal year, if changed since last report)

 

Check whether the issues (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one)

 

  Large accelerated filer  o Accelerated filer  o
  Non-accelerated filer  o Smaller reporting company  x
  Emerging growth company  x  

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

 

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 

 

There were 45,920,000 shares of the registrant’s common stock, $0.001 par value per share, outstanding on March 31, 2019.

 

 

 

   

 

 

THE TEARDROPPERS, INC.

TABLE OF CONTENTS

 

      Page
       
Part I – FINANCIAL INFORMATION  
     
  Item 1. Condensed Unaudited Financial Statements: 3
       
    Condensed Balance Sheets at March 31, 2019 (unaudited) and December 31, 2018 (audited) 3
       
    Condensed Statements of Operations for the three month periods ended March 31, 2019 and 2018 (unaudited) 4
       
    Condensed Statements of Stockholders’ Equity for the three month periods ending March 31, 2019 and 2018 (unaudited) 5
       
    Condensed Statements of Cash Flows for the three month periods ended March 31, 2019 and March 31, 2018 (unaudited) 6
       
    Notes to Condensed Financial Statements (unaudited) 7
       
  Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 13
       
  Item 3. Quantitative and Qualitative Disclosures About Market Risk 14
       
  Item 4. Controls and Procedures 14
       
Part II – OTHER INFORMATION  
       
  Item 1.  Legal Proceedings 16
       
  Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds 16
       
  Item 3. Defaults Upon Senior Security 16
       
  Item 4. Mine Safety Disclosures 16
       
  Item 5. Other Information 16
       
  Item 6. Exhibits 16
       
    Signatures 17

 

     

 

 

 

 2 

 

 

PART I – FINANCIAL INFORMATION

ITEM 1. Condensed Unaudited Financial Statements

 

The Teardroppers, Inc.

CONDENSED BALANCE SHEETS (Unaudited)

 

 

   March 31,   December 31, 
   2019   2018 
         
ASSETS        
         
Current assets          
Cash  $50,259   $71,858 
Lease receivable   850     
Prepaid expenses   3,039    6,641 
Total current assets   54,148    78,499 
           
Fixed assets:          
Cost   288,089    288,089 
Less accumulated depreciation   (85,529)   (71,125)
Fixed assets, net   202,560    216,964 
           
Total Assets  $256,708   $295,463 
           
           
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)          
           
Current liabilities          
           
Accounts payable  $201,287   $187,862 
Accounts payable - related parties   252,975    280,288 
Customer deposits   14,500    14,500 
Deferred revenue   16,000    16,000 
Current portion of long term debt   32,358    31,501 
Accrued interest - unrelated parties   145,632    145,632 
Line of credit from related party   281,545    225,695 
Accrued interest -related parties   25,196    19,566 
Total current liabilities   969,493    921,044 
           
Long term note payable ( net of current portion)   133,632    142,031 
           
Total Liabilities   1,103,125    1,064,075 
           
Stockholders' Deficit          
Preferred stock, par value $0.001, 20,000,000 shares authorized, 0 shares issued, respectively
Common stock, par value $0.001, authorized 200,000,000 shares issued 45,920,000     45,920       45,920  
Additional paid in capital   828,558    828,558 
Accumulated deficit   (1,720,895)   (1,642,090)
Total Stockholders' Deficit   (846,417)   (767,612)
           
Total Liabilities and Stockholders' Deficit  $256,708   $295,463 

 

The accompanying notes are an integral part of the unaudited condensed financial statements.

 

 

 

 3 

 

 

The Teardroppers, Inc.

CONDENSED STATEMENTS OF OPERATIONS (Unaudited)

 

   Three Months Ended 
   March 31,   March 31, 
   2019   2018 
         
Revenues  $13,275   $4,000 
Cost of revenues        
Gross margin   13,275    4,000 
           
Operating expenses:          
Consulting - related party   27,000    26,500 
Consulting - unrelated party   26,486    5,000 
General and administrative   26,169    23,450 
Professional fees   2,125    3,262 
    81,780    58,212 
           
Operating income (loss)   (68,505)   (54,212)
           
Other income (expense):          
Interest expense related parties   (10,300)   (467)
Interest expense - unrelated parties       (16,262)
    (10,300)   (16,729)
           
Net Income Before Taxes   (78,805)   (70,941)
           
Income Tax Provision        
           
Net loss  $(78,805)  $(70,941)
           
Net loss per share (Basic and fully diluted)  $(0.00)  $(0.00)
           
Weighted average number of common shares outstanding     45,920,000       41,530,889  

 

 

The accompanying notes are an integral part of the unaudited condensed financial statements.

 

 

 

 4 

 

 

The Teardroppers, Inc.

CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)

 

 

   Common Stock             
       Amount   Additional   Accumulated   Shareholders' 
   Shares   ($.0001 Par)   Paid in Capital   Deficit   Deficit 
                     
                     
                     
Balance December 31, 2017   41,550,000   $41,550   $283,728   $(1,262,880)  $(937,602)
                          
Assets acquired in exchange for stock   140,000    140    27,860        28,000 
                          
Assets sold for cancellation of stock   (160,000)   (160)   (18,640)       (18,800)
                          
Net loss for the period               (70,941)   (70,941)
                          
Balance March 31, 2018   41,530,000   $41,530   $292,948   $(1,333,821)  $(999,343)
                          
                          
                          
Balance December 31, 2018   45,920,000   $45,920   $828,558   $(1,642,090)  $(767,612)
                          
Net loss for the period               (78,805)   (78,805)
                          
Balance March 31, 2019   45,920,000   $45,920   $828,558   $(1,720,895)  $(846,417)

 

The accompanying notes are an integral part of the unaudited condensed financial statements.

 

 

 

 5 

 

 

The Teardroppers, Inc.

CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)

     

   Three Months Ended 
   March 31,   March 31, 
   2019   2018 
         
Cash Flows From Operating Activities:          
Net loss  $(78,805)  $(70,941)
           
Adjustments to reconcile net loss to net cash provided by (used for) operating activities:                
Depreciation   14,404    12,767 
           
Changes in Operating Assets and Liabilities          
Increase in lease receivable   (850)    
Increase (decrease) in prepaid expenses   3,602    (2,780)
Increase in accounts payable   13,425    10,312 
Increase (decrease) in accounts payable - related parties   (27,313)   24,340 
Increase in accrued interest       6,382 
Increase in accrued interest-related parties   5,630    467 
Increase in deferred revenue       12,000 
           
Net cash used for operating activities   (69,907)   (7,453)
           
Cash Flows From Investing Activities:        
           
Cash Flows From Financing Activities:          
Proceeds from line of credit  unrelated party       75,000 
Principal payments on long term debt   (7,542)   (2,020)
Proceeds from line of credit related party   55,850    54,750 
Repayments on line of credit related party       (44,050)
           
Net cash provided by financing activities   48,308    83,680 
           
Net Increase (Decrease) In Cash   (21,599)   76,227 
           
Cash At The Beginning Of The Period   71,858    40,027 
           
Cash At The End Of The Period   50,259    116,254 
           
           
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION          
           
Assets acquired for debt  $   $28,000 
Debt converted to stock  $   $(28,000)
Assets sold for cancellation of stock  $    (18,800)
           
Cash paid during the year for:          
Interest  $4,670   $9,880 
Franchise and income tax  $   $ 

 

The accompanying notes are an integral part of the unaudited condensed financial statements.

 

 

 

 6 

 

 

TEARDROPPERS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited)

For the Three Months Ended March 31, 2019 and 2018

 

 

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

 

On June 3, 2013, Teardroppers, Inc. (the “Company”), was incorporated under the laws of the state of Nevada.

 

We are in the business of mobile billboard advertising, providing billboard advertising space on custom designed "Teardrop Trailers" and various sizes of cargo type trailers. Teardrop Trailers, are usually designed for short-period accommodations for vacationers and travelers. Teardrop Trailers are designed to be towed behind new and vintage vehicles and pickup trucks.

 

In addition, we own cargo trailers with flat non rivet panel siding that can be used for hauling and transportation. These trailers range in size from 15 feet to 53 feet. We lease these trailers for transportation of goods and for advertising of their respective business or the businesses of lessee clients.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

 

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

 

Interim Financial Statements

 

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to form 10Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In our opinion the financial statements include all adjustments (consisting of normal recurring accruals) necessary in order to make the financial statements not misleading. Operating results for the three months ended March 31, 2019 are not necessarily indicative of the final results that may be expected for the year ended December 31, 2019. For more complete financial information, these unaudited financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2018 filed with the SEC.

 

Use of estimates

 

The preparation of financial statements in conformity with U.S. GAAP 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. Accordingly, actual results could differ from those estimates. Such estimates include management’s assessments of the carrying value of certain assets, useful lives of assets, and related depreciation and amortization methods applied.

 

Cash equivalents

 

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

 

 

 

 7 

 

 

Fair value of financial instruments

 

The Company adopted the provisions of FASB Accounting Standards Codification (“ASC”) 820 (the “Fair Value Topic”) which defines fair value, establishes a framework for measuring fair value under U.S. GAAP, and expands disclosures about fair value measurements.

 

The Fair Value Topic defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. It requires that valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs. It also establishes a fair value hierarchy, which prioritizes the valuation inputs into three broad levels.

 

The carrying amount of the Company’s financial assets and liabilities, such as cash, accounts payable, accrued expenses, and deferred revenue approximate their fair value because of the short-term maturity of those instruments. The Company’s note payable approximates the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at March 31, 2019 and December 31, 2018.

  

The Company had no assets or liabilities measured at fair value on a recurring basis for as of March 31, 2019 and December 31, 2018, respectively, using the market and income approaches.

 

Property and equipment

 

Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method over the assets estimated useful life of three (3) years for equipment, five (5) years for automobile, and seven (7) years for furniture and fixtures. Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in statements of operations.

 

Revenue recognition

 

On January 1, 2018, the Company adopted the provisions of ASC 606 Revenue from Contracts with Customers, and related Accounting Standards Updates.  This new revenue recognition standard has a five step process: a) Determine whether a contract exists; b) Identify the performance obligations; c) Determine the transaction price; d) Allocate the transaction price; and e) Recognize revenue when (or as) performance obligations are satisfied. The impact of the Company’s initial application of ASC 606 did not have a material impact on its financial statements and disclosures.

 

The primary source of revenue is from the rental of advertising space on custom designed Teardrop Trailers. The length of the rental agreements varies from one to thirty days. Customers pay in advance and revenue is recognized based on the number of days of each contract that have expired. For the three months ended March 31, 2019 and 2018 the Company recognized no income from the rental of the trailers.

 

In March 2018, the Company entered into a four-year agreement to lease equipment to an unrelated third party. As of March 31, 2019, and 2018, recognized lease income was $12,000 and $4,000, respectively.

 

In January 2019, the Company entered into a two-year agreement to lease a vehicle to an unrelated third party. The lease is classified as an operating lease. The term of the lease is 24 months at $425 per month. The vehicle being leased is reported on the balance sheet in fixed assets at a cost of $30,089. Lease income is reported each month as the payments are due. As of March 31, 2019, recognized lease income was $1,275 on the Statement of Operations. The payments received are reported as an operating activity on the Statement of Cash Flows.

 

 

 

 8 

 

 

Net income (loss) per share

 

The Company computes basic and diluted earnings per share amounts pursuant to ASC 260-10-45. Basic earnings per share is computed by dividing net income (loss) available to common shareholders, by the weighted average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted earnings per share is computed by dividing net income (loss) available to common shareholders by the diluted weighted average number of shares of common stock during the period

 

The diluted weighted average number of common shares outstanding is the basic weighted number of shares adjusted as of the first day of the year for any potentially diluted debt or equity.

 

There were no potentially dilutive shares outstanding as of March 31, 2019 and 2018, respectively.

 

Subsequent events

 

The Company follows the guidance in ASC 855-10-50 for the disclosure of subsequent events. The Company will evaluate subsequent events through the date the financial statements were issued.  

 

Recently issued accounting pronouncements

 

The Company has implemented all new accounting pronouncements that are in effect and applicable to the Company.  These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

NOTE 3 – GOING CONCERN

 

The Company's consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustment relating to recoverability and classification of recorded amounts of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

 

The Company has a minimum cash balance available for payment of ongoing operating expenses. Its continued existence is dependent upon its ability to continue to execute its operating plan and to obtain additional debt or equity financing. There can be no assurance the necessary debt or equity financing will be available or will be available on terms acceptable to the Company.

 

NOTE 4 – PROPERTY AND EQUIPMENT

 

Property and equipment consists of the following at March 31, 2019 and December 31, 2018:

 

   March 31, 2019   December 31, 2018 
Property and equipment, net  $288,089   $288,089 
Less: accumulated depreciation   (85,529)   (71,125)
Property and equipment, net  $202,560   $216,964 

 

Depreciation expense for the three months ended March 31, 2019 and 2018 was $14,404 and $12,767 respectively.

 

 

 

 9 

 

 

On February 22, 2018, the Company sold a 1971 Corvette LS-5 to a related part for the cancellation of 160,000 shares of stock.

 

On March 1, 2018, the Company purchased a 2013 Ford F-150 truck from a related party for use in the business operations at a cost of $28,000. The vehicle was acquired from the father of the majority shareholder. The debt was immediately converted into 140,000 shares of stock at $.20 per share.

 

On December 22, 2018, the Company acquired a Ford F-150 truck for use in the business operations from the majority shareholder. The agreement was in the form of a long-term lease and was recorded at $30,089, the net present value of the lease payments. See Note 7 for additional details.

 

NOTE 5 – LOAN PAYABLE

 

During 2014, the Company entered into a loan agreement with Gemini Southern, LLC whereby the monies paid to the Company by Gemini Southern, LLC pursuant to the consulting agreement dated September 20, 2013. The balance will be paid back with interest commencing on January 1, 2015 at a rate of 10% per annum with a maturity date of December 12, 2018. On April 1, 2018, the balance of the debt, $525,000, was converted into 4,375,000 of common stock. As of March 31, 2019, and December 31, 2018, the loan amount was $0. The Company recorded accrued interest on this loan of $145,632 as of March 31, 2019 and December 31, 2018, respectively. The accrued interest was not part of the conversion agreement and continues to be reflected as a liability. Effective April 1, 2018, the line of credit is considered related party debt. See Note 7 for details of the transactions.

 

NOTE 6 – LINE OF CREDIT FROM RELATED PARTY

 

On February 25, 2014, the Company entered into a line of credit with DEVCAP Partners, LLC, a California limited liability company, for an amount up to $450,000 with a maturity date of June 1, 2018, bearing interest of 10% per annum. DEVCAP Partners, LLC is a related party to the Company as it is the majority shareholder of the Company. As of March 31, 2019, and December 31, 2018, the balance of the line of credit was $56,545 and $695, respectively. The Company recorded accrued interest of $9,902 and $9,820 on the line of credit at March 31, 2019 and December 31, 2018, respectively.

 

On August 13, 2015, the company entered into a line of credit with General Pacific Partners, LLC, a California limited liability company, for an amount up to $450,000. The line of credit is a demand loan bearing interest of 10% per annum. General Pacific Partners, LLC is a related party to the Company as it is owned by a majority shareholder of the Company. As of March 31, 2019, and December 31, 2018 the balance of the line of credit was $0. The Company recorded accrued interest of $4,732 at March 31, 2019 and December 31, 2018, respectively.

 

During 2014, the Company entered into a line of credit agreement with Gemini Southern, LLC. On April 1, 2018, the Company converted $525,000 of debt owed to Gemini Southern, LLC into 4,375,000 shares of stock. Gemini Southern, LLC will be treated as a related party for all activity from the date of the conversion forward. The line of credit is a demand loan with a maximum of $450,000 bearing interest at 10%, maturing December 2019. At March 31, 2019, and December 31, 2018, the balance due on the line was $225,000. The Company recorded accrued interest of $10,562 and $5,014 as of March 31, 2019 and December 31, 2018, respectively.

 

NOTE 7 – LONG-TERM LIABILITIES – RELATED PARTY

 

On October 1, 2017, the Company acquired from Gemini Southern, LLC a 2006 Ultra-Comp 53” NASCAR type vehicle transport hauler (the “Hauler”) to be used for promotional / advertising services. The purchase price of the Hauler was $165,000. The Company paid for the Hauler with a promissory note (the “Hauler Note”). The Hauler Note bears interest at 12% per annum and is payable as follows: (i) interest only from October 1, 2017 through February 28, 2018; (ii) $ $3,670 per month from March 1, 2018 through February 28, 2022; and $45,000 on February 1, 2022. The trailer is collateral for the promissory note. The balance of the loan was $137,105 and $143,866 as of March 31, 2019 and December 31, 2018, respectively. Accrued interest was $0 at March 31, 2019 and December 31, 2018, respectively.

 

 

 

 10 

 

 

Principal payments for the next five years will be as follows:

 

2019   $ 28,299  
2020     31,888  
2021     35,932  
2022     47,747  
2023      
Total   $ 143,866  

 

On December 22, 2018, the Company leased a vehicle from the majority shareholder. The term of the lease is 84 months with payments of $423 per month. At the end of the lease the Company can purchase the vehicle for $2,500. As of March 31, 2019, it is reasonably expected that the Company will exercise the purchase option. The value of the asset and corresponding liability at the date of inception was $30,089, the net present value of the lease payments, including the purchase option, using an interest rate of 6.649% in accordance with the provisions of ASC 842. The balance of the lease liability at March 31, 2019 and December 31, 2018 was $28,885 and $29,666, respectively.

 

Principal payments for the next five years will be as follows:

 

2019   $ 3,202  
2020     3,422  
2021     3,656  
2022     3,907  
2023     4,175  
Total   $ 18,362  

 

NOTE 8 – OTHER RELATED PARTY TRANSACTIONS

 

Consulting expense to related party (DEVCAP Partners, LLC)

 

On January 1, 2014, the Company executed a three-year consulting agreement with DEVCAP Partners, LLC, (“DEVCAP”), whereby the Company agreed to pay $7,500 a month for consulting services to be provided to the Company such as marketing, architectural development, accounting, finance, corporate structure and tax planning. For the three months ended March 31, 2019 and March 31, 2018, the Company recorded consulting fee expense to DEVCAP of $22,500. The amount due but unpaid is $202,975 and $229,865 at March 31, 2019 and December 31, 2018, respectively, and is included in accounts payable related parties on the balance sheet.

 

Consulting expense to related party (Ray Gerrity)

 

On January 1, 2014, the Company entered into a verbal consulting agreement with its Chief Executive Officer, Ray Gerrity, whereby the Company agreed to pay $2,500 per quarter for consulting services related to his duties as Chief Executive Officer. For the three months ended March 31, 2019 and 2018, the Company recorded consulting fee expense of $0 and $2,500, respectively. The amount due but unpaid was $32,500 at March 31, 2019 and December 31, 2018, respectively, and was included on the balance sheet as accounts payable - related parties. Ray Gerrity resigned his position effective March 31, 2018.

 

Consulting expense to related party (Cody Ware)

 

On January 1, 2019, the Company entered into a verbal consulting agreement with its Chief Executive Officer, Cody Ware, whereby the Company agreed to pay $1,500 per month for consulting services related to his duties as Chief Executive Officer. For the three months ended March 31, 2019 the Company recorded consulting fee expense of $4,500. All fees were paid as of March 31, 2019.

 

 

 11 

 

 

NOTE 9 – STOCKHOLDERS’ DEFICIT

 

At the time of incorporation, the Company was authorized to issue 10,000 shares of common stock and 1,000 shares of preferred stock with a par value of $0.001. The Company amended its articles of incorporation to increase its authorized shares to 200,000,000 shares of common stock and 20,000,000 shares of preferred stock, both $0.001 par value.

 

NOTE 10 – SUBSEQUENT EVENTS

 

Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855 and has determined that no material subsequent events exist.

 

 

 

 12 

 

 

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Safe Harbor for Forward-Looking Statements

 

When used in this report, the words “may,” “will,” “expect,” “anticipate,” “continue,” “estimate,” “project,” “intend,” and similar expressions are intended to identify 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 regarding events, conditions, and financial trends that may affect the Company’s future plans of operations, business strategy, operating results, and financial position. Persons reviewing this report are cautioned that any forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties and that actual result may differ materially from those included within the forward-looking statements as a result of various factors.  Such factors are discussed under the “Item 2. Management’s Discussion and Analysis of Financial Condition or Plan of Operations,” and also include general economic factors and conditions that may directly or indirectly impact the Company’s financial condition or results of operations.

 

Three Months Ended March 31, 2019 Compared to Three Months Ended March 31, 2018

 

Revenues

 

The Company had $13,275 in revenue during the three months ended March 31, 2019 compared to $4,000 in revenue during the three months ended March 31, 2018. The increase in revenues was due to an increase in equipment and vehicle leasing revenues for the quarter 

 

Operating Expenses

 

For the three months ended March 31, 2019 operating expenses were $81,780 compared to $58,212 for the same period in 2018 for an increase of $21,486. The increase was primarily a result of the increase in consulting to unrelated parties to $26,486 from $5,000.

 

Interest and Financing Costs

 

Interest expense was $10,300 for the three months ended March 31, 2019 compared to $16,729 for the three months ended March 31, 2018. The decrease in interest expenses was due to a decrease in the amount of indebtedness of the company.

 

Net Income (Loss)

 

The Company incurred losses of $78,805 for the three months ended March 31, 2019 compared to $70,941 during the three months ended March 31, 2018 due to the factors discussed above.

 

LIQUIDITY AND CAPITAL RESOURCES

 

The Company’s financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustment relating to recoverability and classification of recorded amounts of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

 

The Company has a minimum cash balance available for payment of ongoing operating expenses and has incurred losses since inception and anticipates future losses in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern. Its continued existence is dependent upon its ability to continue to execute its operating plan and to obtain additional debt or equity financing. There can be no assurance the necessary debt or equity financing will be available, or will be available on terms acceptable to the Company.

 

 

 

 13 

 

 

The Company had $50,259 in cash at March 31, 2019 with availability on our related party lines of credit with DEVCAP Partners, LLC, General Pacific Partners, LLC, and Gemini Southern, LLC of $1,068,455. As at March 31, 2019 we had a working capital deficit of $915,399.

 

Operating activities

 

During the three months ended March 31, 2019, we had cash used in operating activities compared of $69,907 as compared to $7,453 during the three months ended March 31, 2018, an increase in cash outflows of $62,454. The decrease between the periods was largely due to a $27,313 reduction in accounts payable to related parties..

 

Investing activities

 

We neither generated nor used cash flow in investing activities during the three months ended March 31, 2019 and the same for the period in 2018.

 

Financing activities

 

During the three months ended March 31, 2019, we generated $48,308 from financing activities compared to $83,680 for the same period ended March 31, 2018. The decrease was primarily due to a reduction in the amount received from an unrelated party line of credit.

 

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk.

 

As a “smaller reporting company,” we are not required to provide the information under this Item 3.

 

ITEM 4. Controls and Procedures

 

Evaluation of disclosure controls and procedures

 

Based upon an evaluation of the effectiveness of our disclosure controls and procedures performed by our Chief Executive Officer as of the end of the period covered by this report, our Chief Executive Officer concluded that our disclosure controls and procedures have not been effective as a result of a weakness in the design of internal control over financial reporting identified below.

 

As used herein, “disclosure controls and procedures” mean controls and other procedures of our company that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

Management’s Report on Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). The Company’s 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 the financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

 

 

 

 14 

 

 

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 the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

 

This quarterly report does not include an attestation report of our registered independent public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered independent public accounting firm.

 

Changes in Internal Control Over Financial Reporting

 

No changes in our internal control over financial reporting occurred during the quarter ended March 31, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

 

 15 

 

 

PART II – OTHER INFORMATION

 

ITEM 1. Legal Proceedings

 

We know of no material, existing or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceeding or material pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our company.

 

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

During the three months ended March 31, 2019, the Company issued no shares of common stock.

 

ITEM 3. Default Upon Senior Securities

 

During the three months ended March 31, 2019, the Company had no senior securities issued and outstanding.

 

ITEM 4. Mine Safety Disclosures

 

Not applicable to our Company.

 

ITEM 5. Other Information

 

During the three months ended March 31, 2019, the Company reported no other information.

 

ITEM 6. Exhibits

 

Copies of the following documents are included as exhibits to this report pursuant to Item 601 of Regulation S-K

 

SEC Ref. No.   Title of Document
31.1*   Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*   Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*   Certification of the Principal Executive Officer pursuant to U.S.C. pursuant to Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*   Certification of the Principal Financial Officer pursuant to U.S.C. pursuant to Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*   XBRL Instance Document
101.SCH*   XBRL Schema Document
101.CAL*   XBRL Calculation Linkbase Document
101.DEF*   XBRL Definition Linkbase Document
101.LAB*   XBRL Label Linkbase Document
101.PRE*   XBRL Presentation Linkbase Document

 

*   Filed herewith.

 

 

 

 16 

 

 

SIGNATURES

  

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized

 

  THE TEARDROPPERS, INC.
   
   
   By: /s/ Cody Ware
    Cody Ware
Chief Executive Officer

 

Date:  May 21, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 17 

 

EX-31.1 2 teardroppers_10q-ex3101.htm CERTIFICATION

Exhibit 31.1

 

CERTIFICATIONS PURSUANT TO

SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION

 

I, Cody Ware, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of The Teardroppers, Inc. for the three month period ended March 31, 2019.

 

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(s) 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 (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

 

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

May 21, 2019

 

/s/ Cody Ware                            

Name:  Cody Ware

Its:  Chief Executive Officer (Principal Executive Officer)

 

 

EX-31.2 3 teardroppers_10q-ex3102.htm CERTIFICATION

Exhibit 31.2

 

SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION

 

I, Cody Ware, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of THE TEARDROPPERS, Inc. for the three month period ended March 31, 2019.

 

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(s) 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 (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

 

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

May 21, 2019

 

/s/ Cody Ware                            

Name: Cody Ware

Its: Principal Financial Officer

 

EX-32.1 4 teardroppers_10q-ex3201.htm CERTIFICATION

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

 

In connection with the Quarterly Report of THE TEARDROPPERS, Inc. (the “Company”) on Form 10-Q, for the three month period ended March 31, 2019 as filed with the Securities and Exchange Commission, I, Cody Ware, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)           The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)           The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

May 21, 2019

 

/s/ Cody Ware                            

Name:  Cody Ware

Its: Chief Executive Officer (Principal Executive Officer)

 

EX-32.2 5 teardroppers_10q-ex3202.htm CERTIFICATION

Exhibit 32.2

 



CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of THE TEARDROPPERS, Inc. (the “Company”) on Form 10-Q, for the three month period ended March 31, 2019 as filed with the Securities and Exchange Commission, I, Cody Ware, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)           The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)           The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

May 21, 2019

 

/s/   Cody Ware                            

Name:  Cody Ware

Its:  Chief Financial Officer (Principal Financial Officer)

 

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1. Organization and Description of Business
3 Months Ended
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Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Description of Business

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

 

On June 3, 2013, Teardroppers, Inc. (the “Company”), was incorporated under the laws of the state of Nevada.

 

We are in the business of mobile billboard advertising, providing billboard advertising space on custom designed "Teardrop Trailers" and various sizes of cargo type trailers. Teardrop Trailers, are usually designed for short-period accommodations for vacationers and travelers. Teardrop Trailers are designed to be towed behind new and vintage vehicles and pickup trucks.

 

In addition, we own cargo trailers with flat non rivet panel siding that can be used for hauling and transportation. These trailers range in size from 15 feet to 53 feet. We lease these trailers for transportation of goods and for advertising of their respective business or the businesses of lessee clients.

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2. Summary of Significant Accounting Policies
3 Months Ended
Mar. 31, 2019
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

 

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

 

Interim Financial Statements

 

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to form 10Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In our opinion the financial statements include all adjustments (consisting of normal recurring accruals) necessary in order to make the financial statements not misleading. Operating results for the three months ended March 31, 2019 are not necessarily indicative of the final results that may be expected for the year ended December 31, 2019. For more complete financial information, these unaudited financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2018 filed with the SEC.

 

Use of estimates

 

The preparation of financial statements in conformity with U.S. GAAP 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. Accordingly, actual results could differ from those estimates. Such estimates include management’s assessments of the carrying value of certain assets, useful lives of assets, and related depreciation and amortization methods applied.

 

Cash equivalents

 

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

 

Fair value of financial instruments

 

The Company adopted the provisions of FASB Accounting Standards Codification (“ASC”) 820 (the “Fair Value Topic”) which defines fair value, establishes a framework for measuring fair value under U.S. GAAP, and expands disclosures about fair value measurements.

 

The Fair Value Topic defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. It requires that valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs. It also establishes a fair value hierarchy, which prioritizes the valuation inputs into three broad levels.

 

The carrying amount of the Company’s financial assets and liabilities, such as cash, accounts payable, accrued expenses, and deferred revenue approximate their fair value because of the short-term maturity of those instruments. The Company’s note payable approximates the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at March 31, 2019 and December 31, 2018.

  

The Company had no assets or liabilities measured at fair value on a recurring basis for as of March 31, 2019 and December 31, 2018, respectively, using the market and income approaches.

 

Property and equipment

 

Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method over the assets estimated useful life of three (3) years for equipment, five (5) years for automobile, and seven (7) years for furniture and fixtures. Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in statements of operations.

 

Revenue recognition

 

On January 1, 2018, the Company adopted the provisions of ASC 606 Revenue from Contracts with Customers, and related Accounting Standards Updates.  This new revenue recognition standard has a five step process: a) Determine whether a contract exists; b) Identify the performance obligations; c) Determine the transaction price; d) Allocate the transaction price; and e) Recognize revenue when (or as) performance obligations are satisfied. The impact of the Company’s initial application of ASC 606 did not have a material impact on its financial statements and disclosures.

 

The primary source of revenue is from the rental of advertising space on custom designed Teardrop Trailers. The length of the rental agreements varies from one to thirty days. Customers pay in advance and revenue is recognized based on the number of days of each contract that have expired. For the three months ended March 31, 2019 and 2018 the Company recognized no income from the rental of the trailers.

 

In March 2018, the Company entered into a four-year agreement to lease equipment to an unrelated third party. As of March 31, 2019, and 2018, recognized lease income was $12,000 and $4,000, respectively.

 

In January 2019, the Company entered into a two-year agreement to lease a vehicle to an unrelated third party. The lease is classified as an operating lease. The term of the lease is 24 months at $425 per month. The vehicle being leased is reported on the balance sheet in fixed assets at a cost of $30,089. Lease income is reported each month as the payments are due. As of March 31, 2019, recognized lease income was $1,275 on the Statement of Operations. The payments received are reported as an operating activity on the Statement of Cash Flows.

 

Net income (loss) per share

 

The Company computes basic and diluted earnings per share amounts pursuant to ASC 260-10-45. Basic earnings per share is computed by dividing net income (loss) available to common shareholders, by the weighted average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted earnings per share is computed by dividing net income (loss) available to common shareholders by the diluted weighted average number of shares of common stock during the period

 

The diluted weighted average number of common shares outstanding is the basic weighted number of shares adjusted as of the first day of the year for any potentially diluted debt or equity.

 

There were no potentially dilutive shares outstanding as of March 31, 2019 and 2018, respectively.

 

Subsequent events

 

The Company follows the guidance in ASC 855-10-50 for the disclosure of subsequent events. The Company will evaluate subsequent events through the date the financial statements were issued.  

 

Recently issued accounting pronouncements

 

The Company has implemented all new accounting pronouncements that are in effect and applicable to the Company.  These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

XML 20 R9.htm IDEA: XBRL DOCUMENT v3.19.1
3. Going Concern
3 Months Ended
Mar. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Going Concern

NOTE 3 – GOING CONCERN

 

The Company's consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustment relating to recoverability and classification of recorded amounts of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

 

The Company has a minimum cash balance available for payment of ongoing operating expenses. Its continued existence is dependent upon its ability to continue to execute its operating plan and to obtain additional debt or equity financing. There can be no assurance the necessary debt or equity financing will be available or will be available on terms acceptable to the Company.

XML 21 R10.htm IDEA: XBRL DOCUMENT v3.19.1
4. Property and Equipment
3 Months Ended
Mar. 31, 2019
Fixed Assets  
Property and Equipment

NOTE 4 – PROPERTY AND EQUIPMENT

 

Property and equipment consists of the following at March 31, 2019 and December 31, 2018:

 

   March 31, 2019   December 31, 2018 
Property and equipment, net  $288,089   $288,089 
Less: accumulated depreciation   (85,529)   (71,125)
Property and equipment, net  $202,560   $216,964 

 

Depreciation expense for the three months ended March 31, 2019 and 2018 was $14,404 and $12,767 respectively.

 

On February 22, 2018, the Company sold a 1971 Corvette LS-5 to a related part for the cancellation of 160,000 shares of stock.

 

On March 1, 2018, the Company purchased a 2013 Ford F-150 truck from a related party for use in the business operations at a cost of $28,000. The vehicle was acquired from the father of the majority shareholder. The debt was immediately converted into 140,000 shares of stock at $.20 per share.

 

On December 22, 2018, the Company acquired a Ford F-150 truck for use in the business operations from the majority shareholder. The agreement was in the form of a long-term lease and was recorded at $30,089, the net present value of the lease payments. See Note 7 for additional details.

XML 22 R11.htm IDEA: XBRL DOCUMENT v3.19.1
5. Loan Payable
3 Months Ended
Mar. 31, 2019
Debt Disclosure [Abstract]  
Loan Payable

NOTE 5 – LOAN PAYABLE

 

During 2014, the Company entered into a loan agreement with Gemini Southern, LLC whereby the monies paid to the Company by Gemini Southern, LLC pursuant to the consulting agreement dated September 20, 2013. The balance will be paid back with interest commencing on January 1, 2015 at a rate of 10% per annum with a maturity date of December 12, 2018. On April 1, 2018, the balance of the debt, $525,000, was converted into 4,375,000 of common stock. As of March 31, 2019, and December 31, 2018, the loan amount was $0. The Company recorded accrued interest on this loan of $145,632 as of March 31, 2019 and December 31, 2018, respectively. The accrued interest was not part of the conversion agreement and continues to be reflected as a liability. Effective April 1, 2018, the line of credit is considered related party debt. See Note 7 for details of the transactions.

XML 23 R12.htm IDEA: XBRL DOCUMENT v3.19.1
6. Line of Credit from Related Party
3 Months Ended
Mar. 31, 2019
Debt Disclosure [Abstract]  
Line of Credit from Related Party

NOTE 6 – LINE OF CREDIT FROM RELATED PARTY

 

On February 25, 2014, the Company entered into a line of credit with DEVCAP Partners, LLC, a California limited liability company, for an amount up to $450,000 with a maturity date of June 1, 2018, bearing interest of 10% per annum. DEVCAP Partners, LLC is a related party to the Company as it is the majority shareholder of the Company. As of March 31, 2019, and December 31, 2018, the balance of the line of credit was $56,545 and $695, respectively. The Company recorded accrued interest of $9,902 and $9,820 on the line of credit at March 31, 2019 and December 31, 2018, respectively.

 

On August 13, 2015, the company entered into a line of credit with General Pacific Partners, LLC, a California limited liability company, for an amount up to $450,000. The line of credit is a demand loan bearing interest of 10% per annum. General Pacific Partners, LLC is a related party to the Company as it is owned by a majority shareholder of the Company. As of March 31, 2019, and December 31, 2018 the balance of the line of credit was $0. The Company recorded accrued interest of $4,732 at March 31, 2019 and December 31, 2018, respectively.

 

During 2014, the Company entered into a line of credit agreement with Gemini Southern, LLC. On April 1, 2018, the Company converted $525,000 of debt owed to Gemini Southern, LLC into 4,375,000 shares of stock. Gemini Southern, LLC will be treated as a related party for all activity from the date of the conversion forward. The line of credit is a demand loan with a maximum of $450,000 bearing interest at 10%, maturing December 2019. At March 31, 2019, and December 31, 2018, the balance due on the line was $225,000. The Company recorded accrued interest of $10,562 and $5,014 as of March 31, 2019 and December 31, 2018, respectively.

XML 24 R13.htm IDEA: XBRL DOCUMENT v3.19.1
7. Long-term Liabilities- Related Party
3 Months Ended
Mar. 31, 2019
Debt Disclosure [Abstract]  
Long-term Liabilities- Related Party

NOTE 7 – LONG-TERM LIABILITIES – RELATED PARTY

 

On October 1, 2017, the Company acquired from Gemini Southern, LLC a 2006 Ultra-Comp 53” NASCAR type vehicle transport hauler (the “Hauler”) to be used for promotional / advertising services. The purchase price of the Hauler was $165,000. The Company paid for the Hauler with a promissory note (the “Hauler Note”). The Hauler Note bears interest at 12% per annum and is payable as follows: (i) interest only from October 1, 2017 through February 28, 2018; (ii) $ $3,670 per month from March 1, 2018 through February 28, 2022; and $45,000 on February 1, 2022. The trailer is collateral for the promissory note. The balance of the loan was $137,105 and $143,866 as of March 31, 2019 and December 31, 2018, respectively. Accrued interest was $0 at March 31, 2019 and December 31, 2018, respectively.

 

Principal payments for the next five years will be as follows:

 

2019   $ 28,299  
2020     31,888  
2021     35,932  
2022     47,747  
2023      
Total   $ 143,866  

 

On December 22, 2018, the Company leased a vehicle from the majority shareholder. The term of the lease is 84 months with payments of $423 per month. At the end of the lease the Company can purchase the vehicle for $2,500. As of March 31, 2019, it is reasonably expected that the Company will exercise the purchase option. The value of the asset and corresponding liability at the date of inception was $30,089, the net present value of the lease payments, including the purchase option, using an interest rate of 6.649% in accordance with the provisions of ASC 842. The balance of the lease liability at March 31, 2019 and December 31, 2018 was $28,885 and $29,666, respectively.

 

Principal payments for the next five years will be as follows:

 

2019   $ 3,202  
2020     3,422  
2021     3,656  
2022     3,907  
2023     4,175  
Total   $ 18,362  

 

XML 25 R14.htm IDEA: XBRL DOCUMENT v3.19.1
8. Other Related Party Transactions
3 Months Ended
Mar. 31, 2019
Related Party Transactions [Abstract]  
Other Related Party Transactions

NOTE 8 – OTHER RELATED PARTY TRANSACTIONS

 

Consulting expense to related party (DEVCAP Partners, LLC)

 

On January 1, 2014, the Company executed a three-year consulting agreement with DEVCAP Partners, LLC, (“DEVCAP”), whereby the Company agreed to pay $7,500 a month for consulting services to be provided to the Company such as marketing, architectural development, accounting, finance, corporate structure and tax planning. For the three months ended March 31, 2019 and March 31, 2018, the Company recorded consulting fee expense to DEVCAP of $22,500. The amount due but unpaid is $202,975 and $229,865 at March 31, 2019 and December 31, 2018, respectively, and is included in accounts payable related parties on the balance sheet.

 

Consulting expense to related party (Ray Gerrity)

 

On January 1, 2014, the Company entered into a verbal consulting agreement with its Chief Executive Officer, Ray Gerrity, whereby the Company agreed to pay $2,500 per quarter for consulting services related to his duties as Chief Executive Officer. For the three months ended March 31, 2019 and 2018, the Company recorded consulting fee expense of $0 and $2,500, respectively. The amount due but unpaid was $32,500 at March 31, 2019 and December 31, 2018, respectively, and was included on the balance sheet as accounts payable - related parties. Ray Gerrity resigned his position effective March 31, 2018.

 

Consulting expense to related party (Cody Ware)

 

On January 1, 2019, the Company entered into a verbal consulting agreement with its Chief Executive Officer, Cody Ware, whereby the Company agreed to pay $1,500 per month for consulting services related to his duties as Chief Executive Officer. For the three months ended March 31, 2019 the Company recorded consulting fee expense of $4,500. All fees were paid as of March 31, 2019.

XML 26 R15.htm IDEA: XBRL DOCUMENT v3.19.1
9. Stockholders' Deficit
3 Months Ended
Mar. 31, 2019
Equity [Abstract]  
Stockholders' Equity (Deficit)

NOTE 9 – STOCKHOLDERS’ EQUITY (DEFICIT)

 

At the time of incorporation, the Company was authorized to issue 10,000 shares of common stock and 1,000 shares of preferred stock with a par value of $0.001. The Company amended its articles of incorporation to increase its authorized shares to 200,000,000 shares of common stock and 20,000,000 shares of preferred stock, both $0.001 par value.

XML 27 R16.htm IDEA: XBRL DOCUMENT v3.19.1
10. Subsequent Events
3 Months Ended
Mar. 31, 2019
Subsequent Events [Abstract]  
Subsequent Events

NOTE 10 – SUBSEQUENT EVENTS

 

Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855 and has determined that no material subsequent events exist.

XML 28 R17.htm IDEA: XBRL DOCUMENT v3.19.1
2. Summary of Significant Accounting Policies (Policies)
3 Months Ended
Mar. 31, 2019
Accounting Policies [Abstract]  
Basis of presentation

Basis of presentation

 

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Interim Financial Statements

Interim Financial Statements

 

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to form 10Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In our opinion the financial statements include all adjustments (consisting of normal recurring accruals) necessary in order to make the financial statements not misleading. Operating results for the three months ended March 31, 2019 are not necessarily indicative of the final results that may be expected for the year ended December 31, 2019. For more complete financial information, these unaudited financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2018 filed with the SEC.

Use of estimates

Use of estimates

 

The preparation of financial statements in conformity with U.S. GAAP 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. Accordingly, actual results could differ from those estimates. Such estimates include management’s assessments of the carrying value of certain assets, useful lives of assets, and related depreciation and amortization methods applied.

Cash equivalents

Cash equivalents

 

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

Fair value of financial instruments

Fair value of financial instruments

 

The Company adopted the provisions of FASB Accounting Standards Codification (“ASC”) 820 (the “Fair Value Topic”) which defines fair value, establishes a framework for measuring fair value under U.S. GAAP, and expands disclosures about fair value measurements.

 

The Fair Value Topic defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. It requires that valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs. It also establishes a fair value hierarchy, which prioritizes the valuation inputs into three broad levels.

 

The carrying amount of the Company’s financial assets and liabilities, such as cash, accounts payable, accrued expenses, and deferred revenue approximate their fair value because of the short-term maturity of those instruments. The Company’s note payable approximates the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at March 31, 2019 and December 31, 2018.

  

The Company had no assets or liabilities measured at fair value on a recurring basis for as of March 31, 2019 and December 31, 2018, respectively, using the market and income approaches.

Property and equipment

Property and equipment

 

Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method over the assets estimated useful life of three (3) years for equipment, five (5) years for automobile, and seven (7) years for furniture and fixtures. Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in statements of operations.

Revenue recognition

Revenue recognition

 

On January 1, 2018, the Company adopted the provisions of ASC 606 Revenue from Contracts with Customers, and related Accounting Standards Updates.  This new revenue recognition standard has a five step process: a) Determine whether a contract exists; b) Identify the performance obligations; c) Determine the transaction price; d) Allocate the transaction price; and e) Recognize revenue when (or as) performance obligations are satisfied. The impact of the Company’s initial application of ASC 606 did not have a material impact on its financial statements and disclosures.

 

The primary source of revenue is from the rental of advertising space on custom designed Teardrop Trailers. The length of the rental agreements varies from one to thirty days. Customers pay in advance and revenue is recognized based on the number of days of each contract that have expired. For the three months ended March 31, 2019 and 2018 the Company recognized no income from the rental of the trailers.

 

In March 2018, the Company entered into a four-year agreement to lease equipment to an unrelated third party. As of March 31, 2019, and 2018, recognized lease income was $12,000 and $4,000, respectively.

 

In January 2019, the Company entered into a two-year agreement to lease a vehicle to an unrelated third party. The lease is classified as an operating lease. The term of the lease is 24 months at $425 per month. The vehicle being leased is reported on the balance sheet in fixed assets at a cost of $30,089. Lease income is reported each month as the payments are due. As of March 31, 2019, recognized lease income was $1,275 on the Statement of Operations. The payments received are reported as an operating activity on the Statement of Cash Flows.

Net income (loss) per share

Net income (loss) per share

 

The Company computes basic and diluted earnings per share amounts pursuant to ASC 260-10-45. Basic earnings per share is computed by dividing net income (loss) available to common shareholders, by the weighted average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted earnings per share is computed by dividing net income (loss) available to common shareholders by the diluted weighted average number of shares of common stock during the period

 

The diluted weighted average number of common shares outstanding is the basic weighted number of shares adjusted as of the first day of the year for any potentially diluted debt or equity.

 

There were no potentially dilutive shares outstanding as of March 31, 2019 and 2018, respectively.

Subsequent events

Subsequent events

 

The Company follows the guidance in ASC 855-10-50 for the disclosure of subsequent events. The Company will evaluate subsequent events through the date the financial statements were issued.  

Recently Issued Accounting Pronouncements

Recently issued accounting pronouncements

 

The Company has implemented all new accounting pronouncements that are in effect and applicable to the Company.  These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

XML 29 R18.htm IDEA: XBRL DOCUMENT v3.19.1
4. Property and Equipment (Tables)
3 Months Ended
Mar. 31, 2019
Fixed Assets  
Property and equipment
   March 31, 2019   December 31, 2018 
Property and equipment, net  $288,089   $288,089 
Less: accumulated depreciation   (85,529)   (71,125)
Property and equipment, net  $202,560   $216,964 
XML 30 R19.htm IDEA: XBRL DOCUMENT v3.19.1
7. Long-term Liabilities- Related Party (Tables)
3 Months Ended
Mar. 31, 2019
Hauler [Member]  
Maturity of Long-term Debt
2019   $ 28,299  
2020     31,888  
2021     35,932  
2022     47,747  
2023      
Total   $ 143,866  
Other Vehicle [Member]  
Maturity of Long-term Debt
2019   $ 3,202  
2020     3,422  
2021     3,656  
2022     3,907  
2023     4,175  
Total   $ 18,362  
XML 31 R20.htm IDEA: XBRL DOCUMENT v3.19.1
2. Summary of Significant Accounting Policies (Details Narrative) - USD ($)
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Dec. 31, 2018
Fair value of assets/liabilities $ 0   $ 0
Potentially dilutive shares outstanding 0 0  
Rental of trailers [Member]      
Revenues from contracts with customers $ 0 $ 0  
Leased Equipment [Member]      
Revenues from contracts with customers 12,000 4,000  
Leased Vehicle [Member]      
Revenues from contracts with customers $ 1,275 $ 0  
Equipment [Member]      
Property and equipment estimated useful lives p3y    
Automobiles [Member]      
Property and equipment estimated useful lives p5y    
Furniture and Fixtures [Member]      
Property and equipment estimated useful lives p7y    
XML 32 R21.htm IDEA: XBRL DOCUMENT v3.19.1
4. Property and Equipment (Details) - USD ($)
Mar. 31, 2019
Dec. 31, 2018
Fixed Assets    
Property and equipment, gross $ 288,089 $ 288,089
Less: Accumulated depreciation (85,529) (71,125)
Property and equipment, net $ 202,560 $ 216,964
XML 33 R22.htm IDEA: XBRL DOCUMENT v3.19.1
4. Property and Equipment (Details Narrative) - USD ($)
2 Months Ended 3 Months Ended 12 Months Ended
Mar. 01, 2018
Feb. 22, 2018
Mar. 31, 2019
Mar. 31, 2018
Dec. 22, 2018
Depreciation expense     $ 14,404 $ 12,767  
Stock issued for purchase of vehicle, value       $ 28,000  
1971 Corvette LS-5 [Member]          
Vehicle sold for cancellation of stock, shares cancelled   160,000      
1971 Chevrolet Corvette [Member]          
Stock issued for purchase of vehicle, shares       160,000  
Stock issued for purchase of vehicle, value       $ 24,000  
1995 Featherlite Trailer [Member]          
Stock issued for purchase of vehicle, shares       300,000  
Stock issued for purchase of vehicle, value       $ 60,000  
NASCAR hauler [Member]          
Additions to property and equipment       $ 165,000  
Ford F-150 [Member]          
Stock issued for purchase of vehicle, shares 140,000        
Stock issued for purchase of vehicle, value $ 28,000        
Ford F-150 [Member]          
Additions to property and equipment         $ 30,089
XML 34 R23.htm IDEA: XBRL DOCUMENT v3.19.1
5. Loan Payable (Details Narrative) - Gemini Southern [Member] - USD ($)
3 Months Ended
Apr. 01, 2018
Mar. 31, 2019
Dec. 31, 2018
Debt converted, amount converted $ 525,000    
Debt converted, shares issued 4,375,000    
Loan balance   $ 0 $ 0
Accrued interest   $ 145,632 $ 145,632
XML 35 R24.htm IDEA: XBRL DOCUMENT v3.19.1
6. Line of Credit from Related Party (Details Narrative) - USD ($)
3 Months Ended 6 Months Ended
Mar. 31, 2019
Apr. 01, 2018
Jul. 05, 2017
Dec. 31, 2018
Credit line balance $ 281,545     $ 225,695
Accrued interest 145,632     145,632
Gemini Southern [Member]        
Debt converted, amount converted   $ 525,000    
Debt converted, shares issued   4,375,000    
DEVCAP Partners, LLC [Member]        
Line of credit maximum amount $ 450,000      
Maturity date Dec. 31, 2019      
Interest rate 10.00%      
Credit line balance $ 56,545     695
Accrued interest 9,902     9,820
General Pacific Partners, LLC [Member]        
Line of credit maximum amount $ 450,000      
Interest rate 10.00%      
Credit line balance $ 0     0
Accrued interest 4,732     4,732
Debt converted, amount converted     $ 25,000  
Debt converted, shares issued     500,000  
Gemini Southern [Member]        
Line of credit maximum amount $ 450,000      
Interest rate 10.00%      
Credit line balance $ 225,000     225,000
Accrued interest $ 10,562     $ 5,014
XML 36 R25.htm IDEA: XBRL DOCUMENT v3.19.1
7. Long-Term Liabilities - Related Party (Details)
Mar. 31, 2019
USD ($)
Hauler [Member]  
Future minimum principal payment 2019 $ 28,299
Future minimum principal payment 2020 31,888
Future minimum principal payment 2021 35,932
Future minimum principal payment 2022 47,747
Future minimum principal payment 2023 0
Future minimum principal payment total 143,866
Other Vehicle [Member]  
Future minimum principal payment 2019 3,202
Future minimum principal payment 2020 3,422
Future minimum principal payment 2021 3,656
Future minimum principal payment 2022 3,907
Future minimum principal payment 2023 4,175
Future minimum principal payment total $ 18,362
XML 37 R26.htm IDEA: XBRL DOCUMENT v3.19.1
7. Long-term Liabilities- Related Party (Details Narrative) - USD ($)
Mar. 31, 2019
Dec. 31, 2018
Hauler Note [Member]    
Debt face amount $ 165,000  
Debt stated interest rate 12.00%  
Note payable balance $ 137,105 $ 143,866
Accrued interest $ 0 0
Other Vehicle [Member]    
Debt stated interest rate 6.649%  
Capital lease amount $ 28,885 $ 29,666
XML 38 R27.htm IDEA: XBRL DOCUMENT v3.19.1
8. Other Related Party Transactions (Details Narrative) - USD ($)
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Dec. 31, 2018
Consulting fees to related party $ 27,000 $ 26,500  
Accounts payable - related parties 252,975   $ 280,288
DEVCAP Partners, LLC [Member]      
Consulting fees to related party 22,500 22,500  
Accounts payable - related parties 202,975   229,865
Ray Gerrity [Member]      
Consulting fees to related party 0 2,500  
Accounts payable - related parties 32,500   32,500
Robert Wilson [Member]      
Consulting fees to related party 0 $ 2,500  
Accounts payable - related parties $ 17,500   $ 17,500
Larry Krough [Member]      
Stock issued for services, shares 15,000    
Stock issued for services, value $ 15,000    
Cody Ware [Member]      
Consulting fees to related party $ 4,500    
XML 39 R28.htm IDEA: XBRL DOCUMENT v3.19.1
9. Stockholders' Deficit (Details Narrative) - shares
Mar. 31, 2019
Dec. 31, 2018
Equity [Abstract]    
Common stock, shares authorized 200,000,000 100,000,000
Preferred stock, shares authorized 20,000,000 20,000,000
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