UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: MARCH 31, 2017
COMMISSION FILE NUMBER: 000-55489
EXTRACT PHARMACEUTICALS, INC.
(FKA Pacific Media Group Enterprises, Inc.)
(Exact name of registrant as specified in its charter)
Delaware 81-3709511
_______________________________ ___________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3952 Clairemont Mesa Blvd., Suite D-194
San Diego, California 92117
Tel: (858) 945-8876
Fax: (858) 459-1103
(Address and telephone number of principal executive offices)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 daysYes /X/ No / /
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files) Yes /X/ No / /
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.
Large accelerated filer [ ] Accelerated Filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act ). Yes [ ] No [X]
The number of Registrant’s shares of common stock, $0.0001 par value, outstanding as of April 14, 2017 was 113,886,000.
ITEM 1. FINANCIAL STATEMENTS
The un-audited quarterly financial statements for the period ended March 31, 2017, prepared by the Company, immediately follow.
PACIFIC MEDIA GROUP ENTERPRISES, INC. | ||
BALANCE SHEETS | ||
ASSETS | ||
March 31, 2017 | June 30, 2016 | |
(Unaudited) | ||
Current Assets | ||
Cash | $ 500 | $ 500 |
Total Current Assets | 500 | 500 |
Total Assets | $ 500 | $ 500 |
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||
Current Liabilities | ||
Accounts Payable | - | - |
Total Current Liabilities | - | - |
Long Term Liabilities | ||
Notes Payable | 22,992 | 500 |
Total Long Term Liabilities | 22,992 | 500 |
Total Liabilities | 22,992 | 500 |
Stockholders' Equity (Deficit) | ||
Preferred stock, $0.0001 par value, 20,000,000 shares | ||
authorized; no shares issued or outstanding | - | - |
Common stock, $0.0001 par value, 100,000,000 shares | ||
authorized; 2,109,000 shares issued and outstanding | 211 | 211 |
Additional paid-in capital | 8,999 | 8,999 |
Accumulated deficit | (31,702) | (9,210) |
Total stockholders' equity (deficit) | (22,492) | - |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ 500 | $ 500 |
The accompanying notes are an integral part of these financial statements | ||
PACIFIC MEDIA GROUP ENTERPRISES, INC. | ||||
STATEMENTS OF OPERATIONS | ||||
(UNAUDITED) | ||||
For the Three Months Ended Mar. 31, 2017 | For the Three Months Ended Mar. 31, 2016 | For the Nine Months Ended Mar. 31, 2017 | For the Nine Months Ended Mar. 31, 2016 | |
Revenue | $ - | $ - | $ - | $ - |
Total Revenue | - | - | - | - |
Expenses | ||||
General & Admin. Expenses | 1,400 | - | 22,492 | - |
Other Operating Expenses | - | - | - | - |
Total Expenses | (1,400) | - | (22,492) | - |
Net (Loss) | $ (1,400) | $ - | $ (22,492) | $ - |
Basic and Diluted Earnings (Loss) per Share | $ (0.001) | $ - | $ (0.011) | $ - |
Weighted average shares - basic and diluted | 2,109,000 | 2,100,000 | 2,109,000 | 2,100,000 |
The accompanying notes are an integral part of these financial statements | ||||
PACIFIC MEDIA GROUP ENTERPRISES, INC. | ||
STATEMENTS OF CASH FLOWS | ||
(UNAUDITED) | ||
For the Nine Months Ended Mar. 31, 2017 | For the Nine Months Ended Mar. 31, 2016 | |
OPERATING ACTIVITIES | ||
Net (Loss) | $ (22,492) | $ - |
Adjustments to reconcile net loss to cash | ||
flows provided by operating activities: | ||
Common stock issued for services | - | - |
Changes in operating assets and liabilities | ||
Accounts Receivable | - | - |
Accrued Liabilities | - | - |
Net cash used in operating activities | (22,492) | - |
CASH FLOWS (USED) BY INVESTING ACTIVITIES | ||
Investing activities | - | - |
Total cash (used) in investing activities | - | - |
FINANCING ACTIVITIES | ||
Proceeds of loan from officer | 22,492 | - |
Net cash from financing activities | 22,492 | - |
Net change in cash | - | - |
Cash at beginning of period | 500 | - |
Cash at end of period | $ 500 | $ - |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Cash paid during period for : | ||
Interest | - | - |
Income Taxes | - | - |
The accompanying notes are an integral part of these financial statements | ||
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EXTRACT PHARMACEUTICALS, INC.
(FKA Pacific Media Group Enterprises, Inc.)
Notes to Financial Statements
March 31, 2017
(Unaudited)
NOTE 1. NATURE AND BACKGROUND OF BUSINESS
Extract Pharmaceuticals, Inc. ("the Company" or "the Issuer") was organized under the laws of the State of Delaware on March 6, 2014 under the name Pacific Media Group Enterprises, Inc. The Company was established as part of the Chapter 11 Plan of Reorganization of Pacific Shores Development, Inc. ("PSD"). Initially the Company was engaged in the business of developing mobile apps designed (a) to allow patients/clients to see fee quotes from professionals for their professional services. and (b) to provide these professionals with prospects or leads for new patients/clients. On April 7, 2017 the Company amended its Certificate of Incorporation with the Secretary of State of Delaware, changing its name from Pacific Media Group Enterprises Inc. to Extract Pharmaceuticals Inc. The Company also left the mobile app development business and began development of products based on chewing gum delivery of medicinal cannabis oils.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), and include all the notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation of the financial statements have been included.
b. USE OF ESTIMATES
The preparation of financial statements in conformity with 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. Actual results could differ from those estimates.
c. BASIC AND DILUTED NET LOSS PER SHARE
Net loss per share is calculated in accordance with Codification topic 260, “Earnings Per Share” for the periods presented. Basic net loss per share is computed using the weighted average number of common shares outstanding. Diluted loss per share has not been presented because there are no dilutive items. Diluted earnings loss per share is based on the assumption that all dilutive stock options, warrants, and convertible debt are converted or exercised by applying the treasury stock method. Under this method, options and warrants are assumed exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Options, warrants and/or convertible debt will have a dilutive effect, during periods of net profit, only when the average market price of the common stock during the period exceeds the exercise or conversion price of the items.
d. CASH and CASH EQUIVALENTS
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For the Balance Sheets and Statements of Cash Flows, all highly liquid investments with initiated maturity of three months or less are considered to be cash equivalents. The Company had no cash equivalents as of March 31, 2017.
e. REVENUE RECOGNITION
The Company recognizes revenue in accordance with ASC topic 605 “Revenue Recognition, and other applicable revenue recognition guidance under US GAAP. Sales revenue is recognized for our retail and wholesale customers when: (i) persuasive evidence of a sales arrangement exists, (ii) the sales terms are fixed or determinable, (iii) title and risk of loss have transferred, and (iv) collectability is reasonably assured — generally when products are shipped to the customer and services are rendered, except in situations in which title passes upon receipt of the products by the customer. In this case, revenues are recognized upon services rendered.
f. ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS
Accounts receivable are recorded at invoiced amount and generally do not bear interest. An allowance for doubtful accounts is established, as necessary, based on past experience and other factors which, in management's judgment, deserve current recognition in estimating bad debts. Such factors include growth and composition of accounts receivable, the relationship of the allowance for doubtful accounts to accounts receivable, and current economic conditions. The determination of the collectability of amounts due requires the Company to make judgments regarding future events and trends. Allowances for doubtful accounts are determined based on assessing the Company’s portfolio on an individual customer and on an overall basis. This process consists of a review of historical collection experience, current aging status of the customer account, and the financial condition of the Company’s customers. Based on a review of these factors, the Company establishes or adjusts the allowance for specific customers and the accounts receivable portfolio as a whole. At March 31, 2017 and June 30, 2016 an allowance for doubtful accounts was not considered necessary as there were no accounts receivable.
g. SHARE-BASED COMPENSATION
Codification topic 718 “Stock Compensation” requires the cost resulting from all share-based transactions be recorded in the financial statements and establishes fair value as the measurement objective for share-based payment transactions with employees and acquired goods or services from non-employees. The codification also provides guidance on valuing and expensing these awards, as well as disclosure requirements of these equity arrangements. The Company adopted the codification upon its creation and will expense share based costs in the period incurred. The Company completed one share-based transaction for mobile app development and programming services on April 1, 2016 valued at $9,000.
h. INCOME TAXES
Income taxes are provided in accordance with the FASB Accounting Standards Classification. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
i. IMPACT OF NEW ACCOUNTING STANDARDS
The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company's results of operations, financial position, or cash flow.
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NOTE 3. GOING CONCERN
The Company's financial statements are prepared in accordance with GAAP applicable to a going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. As of March 31, 2017 the Company did not have significant cash or other material assets, nor did it have operations or a source of revenue sufficient to cover its operating costs and allow it to continue as a going concern. The Company’s officers and directors have committed to advancing certain operating costs of the Company.
While the Company believes in will be able to generate sufficient revenues and/or raise additional funds, there can be no assurances that it will accomplish either. The Company’s ability to continue as a going concern is dependent upon its ability to achieve profitable operations or obtain adequate financing. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 4. STOCKHOLDERS' EQUITY
As of March 31, 2017 the authorized share capital of the Company consisted of 100,000,000 shares of common stock with $0.0001 par value, and 20,000,000 shares of preferred stock also with $0.0001 par value.
COMMON STOCK: The Company's first issuance of common stock, totaling 580,000 shares, took place on March 6, 2014 pursuant to the Chapter 11 Plan of Reorganization confirmed by the U.S. Bankruptcy Court in the matter of PSD. The Court ordered the distribution of shares in the Company to all general unsecured creditors of PSD, with these creditors to receive their PRO RATA share (according to amount of debt held) of a pool of 80,000 shares in the Company. The Court also ordered the distribution of shares in the Company to all administrative creditors of PSD, with these creditors to receive one share of common stock in the Company for each $0.10 of PSD's administrative debt which they held. A total of 500,000 shares were issued to PSD’s administrative creditors.
The Court also ordered the distribution of 2,500,000 warrants in the Company to all administrative creditors of PSD, with these creditors to receive five warrants in the Company for each $0.10 of PSD's administrative debt which they held. These creditors received 2,500,000 warrants consisting of 500,000 "A Warrants" each convertible into one share of common stock at an exercise price of $4.00; 500,000 "B Warrants" each convertible into one share of common stock at an exercise price of $5.00; 500,000 "C Warrants" each convertible into one share of common stock at an exercise price of $6.00; 500,000 "D Warrants" each convertible into one share of common stock at an exercise price of $7.00; and 500,000 "E Warrants" each convertible into one share of common stock at an exercise price of $8.00. All warrants are exercisable at any time prior to August 30, 2019. As of the date of this report, no warrants have been exercised.
On June 1, 2014 the Company issued 1,520,000 common shares for services at par value, $0.0001 per share for $152. On April 1, 2016 the Company issued 9,000 common shares for services related to mobile app programming and development valued at $1.00 per share for $9,000.
As a result of these issuances there were 2,109,000 common shares issued and outstanding, and a total of 2,500,000 warrants to acquire common shares issued and outstanding, at March 31, 2017.
PREFERRED STOCK: The authorized share capital of the Company includes 20,000,000 shares of preferred stock with $0.0001 par value. As of March 31, 2017 no shares of preferred stock had been issued and no shares of preferred stock were outstanding.
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NOTE 5. INCOME TAXES
The Company has had no revenues and made no U.S. federal income tax provision since its inception on March 6, 2014.
NOTE 6. RELATED PARTY TRANSACTIONS
On June 1, 2014 the Company issued 1,520,000 shares of common stock in a private placement for services valued at par value of $0.0001 per share. Of these shares, 20,000 were issued to the former CEO and director of the Company and 1,500,000 were issued to the current CEO and director of the Company. On April 1, 2016 the Company issued a Note for $500 to the CEO of the company. On August 5, 2016 the Company issued a Note for $2,500 to the CFO and Secretary of the Company, and on August 25, 2016 the Company issued a second Note for $2,500 to the CFO and Secretary of the Company; on December 30, 2016 the Company issued a Note for $14,318 to the CFO and Secretary of the Company; and on March 30, 2017 the Company issued a Note for $3,174 to the CFO and Secretary of the Company. All five Notes are non-interest bearing. The unpaid principal balance on each of the four notes will be due and payable three years from the date of issuance of the notes. The conversion rate will be one (1) share of common stock for every one (1) dollar of debt principal converted. Since the price of the shares issued recently is same as the conversion price, there was no beneficial conversion feature.
The Company utilizes an office space of approximately 100 square feet in the residence of the Company’s CEO, which is provided at no cost by the CEO. The value of the space is immaterial. The space is believed to be adequate for the Company’s needs at this time.
NOTE 7. SUBSEQUENT EVENTS
On April 7, 2017 the Company amended its Certificate of Incorporation with the State of Delaware, changing its name from Pacific Media Group Enterprises Inc. to Extract Pharmaceuticals Inc. and changing the number of authorized common shares from 100,000,000 to 300,000,000. The number of authorized preferred shares remained unchanged at 20,000,000.
Also on April 7, 2017 the Company affected a forward split of its shares, Fifty-Four (54) new shares for each One (1) old share. As a result of this the 2,109,000 common shares outstanding as of March 31, 2017 have been split such that 113,886,000 common shares are outstanding as of the date of the filing of this report on Form 10-Q.
On April 10, 2017 the Directors voted to terminate the Company’s involvement in the mobile application development business and to pursue instead the business of development and sale of products based on chewing gum delivery of medicinal cannabis oils. The Company sold all of its interest in the mobile application development business to its CFO and Secretary in exchange for cancellation of the Company’s Notes due to him which totaled $22,492. On the same date the Company repaid the loan of $500 due to its CEO, cancelling the Note payable to him.
Also on April 10, 2017 the Directors voted to appoint Mr. Peter E. Maddocks to the Board of Directors of the Company and also voted to appoint Mr. Maddocks as CEO and CFO of the Company. On the same date two Directors, Maurice Masters and Daniel Masters resigned their positions as Officers and Directors of the Company.
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ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed financial statements and related notes included in this Quarterly Report on Form 10-Q and the audited financial statements and notes thereto as of and for the year ended June 30, 2016.
FORWARD-LOOKING STATEMENTS
The discussion contained herein contains "forward-looking statements" that involve risk and uncertainties. These statements may be identified by the use of terminology such as "believes," "expects," "may," "should" or anticipates" or expressing this terminology negatively or similar expressions or by discussions of strategy. The cautionary statements made in this Form 10-Q should be read as being applicable to all related forward-looking statements wherever they appear in this Form 10-Q. Our actual results could differ materially from those discussed in this report.
BUSINESS AND PLAN OF OPERATION
Extract Pharmaceuticals, Inc. ("the Company" or "the Issuer") was organized under the laws of the State of Delaware on March 6, 2014 under the name Pacific Media Group Enterprises, Inc. The Company was established as part of the implementation of the Chapter 11 plan of reorganization of Pacific Shores Development, Inc. (“PSD”). PSD had been in the residential real estate development business and the predecessor of the issuer was a subsidiary of PSD operating as an in-house advertising agency to plan and create advertising and media planning and buying for its parent, PSD. Under PSD's Plan of Reorganization the Company was incorporated to: (1) receive and own the interest which PSD had in the advertising business; and (2) issue shares of its common stock to PSD's creditors “in order to enhance the Debtor’s distribution to its Creditors.” Management of PSD “agreed to use its best efforts to develop an active business within [the Company] and to have the shares… publicly traded on the Over-The-Counter Bulletin Board market in order to provide an opportunity for liquidity to the Creditors.” The Company entered the mobile app business and became a reporting issuer in partial fulfillment of that commitment to the court and creditors. Subsequent to March 31, 2017 the name of the corporation and its business direction changed as discussed in Footnote Note 7, Subsequent Events, of the footnotes to our financial statements.
In December 2016 we completed initial development of the Android version of our first mobile app, and during the three months ended March 31, 2017 we worked on the IOS version of that app. As of March 31, 2017 the IOS version was still not complete and therefore no marketing efforts had been undertaken and no revenues were realized. Further, we did not anticipate any revenues until, at the earliest, late in calendar 2017. This was because our plan was to offer the service free until such time as there was a substantial volume of users. Only at that point would we begin to charge the professional service providers for our service. Because of the long lead time to first revenues and the high cost of marketing the app, the Company decided on April 10, 2017 to pursue a different business direction as discussed in Footnote Note 7, Subsequent Events, of the footnotes to our financial statements.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2017 we had assets of $500 and we had liabilities of $22,992 and an accumulated deficit of $31,702. As of June 30, 2016 we had assets of $500 and we had liabilities of $500 and we had an accumulated deficit of $9,210. Our only expenses in the three months and nine months periods ended March 31, 2017 were for professional, general, and administrative expenses. For the three months ended March 31, 2017 these totaled $1,400 and for the nine months ended March 31, 2017 these totaled $22,492. We had no revenues during the period. In the three and nine months ended March 31,
10
2016 we had no expenses and no revenue. Our increase in liabilities from $0 at March 31, 2016 to $22,992 at March 31, 2017 was the result of general and administrative expenses arising from our registration as a reporting issuer with the SEC and our set-up with a licensed stock transfer agent. We will, in all likelihood, sustain continued operating expenses without corresponding revenues, until at least the fourth quarter of 2017. Until then we will continue to depend upon officers and directors to make loans to the Company to meet any costs that may occur. All such advances will be interest-free.
RESULTS OF OPERATIONS
The Company has not yet realized any revenues or earnings from operations however, as noted above, it incurs ongoing expenses related to its SEC registration and status as a reporting issuer. We completed development of the Android version of our first mobile app in December 2016 and during the three months ended March 31, 2017 we concentrated on developing the iOS version of our first app. All such efforts have since been abandoned and the Company’s future results will be based on its efforts to develop a chewing gum product for delivery of medicinal cannabis oils.
GOING CONCERN
The accompanying financial statements are presented on a going concern basis. The Company's financial condition raises substantial doubt about the Company's ability to continue as a going concern. The Company has little cash and its proposed products are still in development and therefore generate no revenues from operations. It is relying on advances from officers and directors to meet its limited operating expenses. The accompanying financial statements are presented on a going concern basis under US GAAP.
OFF-BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
ITEM 4. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Our management, with the participation of our President and Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures were not effective for the same reasons that our internal control over financial reporting were not adequate.
INTERNAL CONTROL OVER FINANCIAL REPORTING
Our Principal Executive Officer and Principal Financial Officer have concluded that our internal control over financial reporting was not effective during the fiscal years ended June 30 2016 and 2015 and the three and nine months ended March 31, 2017 at the reasonable assurance level, as a result of a material weakness primarily related to a lack of a sufficient number of personnel with appropriate training and experience in accounting principles generally accepted in the United States of America, or GAAP.
We are currently in the process of evaluating the steps necessary to remediate this material weakness.
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CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There was no change in our internal control over financial reporting that occurred during the quarterly period ended March 31, 2017 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within any company have been detected.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
There have been no material changes to the risks to our business from those described in our Form 10-A as filed with the SEC on September 29, 2016.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. REMOVED AND RESERVED
ITEM 5. OTHER INFORMATION
Please see the Form 8-K filed on April 12, 2017 concerning our change of name, change of business, change of control, and change of management.
ITEM 6. - EXHIBITS
No.
Description
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30.1
Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
30.2
Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the
Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31
12
Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101
The following materials from the Company’s Quarterly Report on Form 10-Q for
the quarter ended March 31, 2017, formatted in XBRL (eXtensible Business Reporting Language); (i) Balance Sheets at March 31, 2017 and June 30, 2016, (ii) Statement of Operations for the three and Nine months periods ended March 31, 2017 and 2016, (iii) Statement of Cash Flows for the nine months periods ended March 31, 2017 and 2016, and (iv) Notes to Financial Statements.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: April 24, 2017
EXTRACT PHARMACEUTICALS, INC.
By: /s/ Peter E. Maddocks
_________________________________
Peter E. Maddocks
President, CEO, CFO, and Director
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EXHIBIT 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
I, Peter E. Maddocks, certify that:
1. I have reviewed this report on Form 10-Q of Extract Pharmaceuticals, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: April 24, 2017
/s/ Peter E. Maddocks
--------------------------------
Name: Peter E. Maddocks
Title: President and Chief Executive Officer
EXHIBIT 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
I, Peter E. Maddocks, certify that:
1. I have reviewed this report on Form 10-Q of Extract Pharmaceuticals, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: April 24, 2017
/s/ Peter E. Maddocks
--------------------------------
Name: Peter E. Maddocks
Title: Chief Financial Officer
EXHIBIT 32
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 on Form 10-Q of Extract Pharmaceuticals, Inc. (the “Company”), for the quarter ended March 31, 2017, as filed with the Securities and Exchange Commission (the “Report”), the undersigned, Peter E. Maddocks, chief executive officer of the Company and chief financial officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
By: /s/ Peter E. Maddocks
Peter E. Maddocks
Chief Executive Officer and Chief Financial Officer
Dated: April 24, 2017
Document and Entity Information - USD ($) |
9 Months Ended | ||
|---|---|---|---|
Mar. 31, 2017 |
Mar. 21, 2017 |
Dec. 31, 2015 |
|
| Document and Entity Information: | |||
| Entity Registrant Name | Pacific Media Group Enterprises, Inc. | ||
| Document Type | 10-Q | ||
| Document Period End Date | Mar. 31, 2017 | ||
| Trading Symbol | pmge | ||
| Amendment Flag | false | ||
| Entity Central Index Key | 0001683252 | ||
| Current Fiscal Year End Date | --06-30 | ||
| Entity Common Stock, Shares Outstanding | 2,109,000 | ||
| Entity Public Float | $ 210,900 | ||
| Entity Filer Category | Smaller Reporting Company | ||
| Entity Current Reporting Status | Yes | ||
| Entity Voluntary Filers | No | ||
| Entity Well-known Seasoned Issuer | No | ||
| Document Fiscal Year Focus | 2017 | ||
| Document Fiscal Period Focus | Q3 |
Statement of Financial Position - USD ($) |
Mar. 31, 2017 |
Jun. 30, 2016 |
|---|---|---|
| Assets, Current | ||
| Cash and Cash Equivalents, at Carrying Value | $ 500 | $ 500 |
| Assets, Current | 500 | 500 |
| Assets, Noncurrent | ||
| Assets | 500 | 500 |
| Liabilities, Noncurrent | ||
| Notes Payable, Noncurrent | 22,992 | 500 |
| Liabilities, Noncurrent | 22,992 | 500 |
| Liabilities | 22,992 | 500 |
| Common Stock, Value, Issued | 211 | 211 |
| Additional Paid in Capital, Common Stock | 8,999 | 8,999 |
| Retained Earnings (Accumulated Deficit) | (31,702) | (9,210) |
| Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | (22,492) | |
| Liabilities and Equity | $ 500 | $ 500 |
Statement of Financial Position - Parenthetical - $ / shares |
Mar. 31, 2017 |
Jun. 30, 2016 |
|---|---|---|
| Balance Sheets | ||
| Preferred Stock, Par Value | $ 0.0001 | $ 0.0001 |
| Preferred Stock, Shares Authorized | 20,000,000 | 20,000,000 |
| Common Stock, Par Value | $ 0.0001 | $ 0.0001 |
| Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
| Common Stock, Shares Issued | 2,109,000 | 2,109,000 |
| Common Stock, Shares Outstanding | 2,109,000 | 2,109,000 |
Statement of Income - USD ($) |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Mar. 31, 2017 |
Mar. 31, 2016 |
|
| Operating Expenses | ||||
| General and Administrative Expense | $ 1,400 | $ 22,492 | ||
| Operating Expenses | 1,400 | 22,492 | ||
| Operating Income (Loss) | (1,400) | (22,492) | ||
| Interest and Debt Expense | ||||
| Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest | (1,400) | (22,492) | ||
| Income (Loss) from Continuing Operations, Including Portion Attributable to Noncontrolling Interest | $ (1,400) | (22,492) | ||
| Net Income (Loss) Attributable to Parent | $ (22,492) | |||
| Earnings Per Share | ||||
| Earnings Per Share, Basic | $ (0.001) | $ (0.011) | ||
| Weighted Average Number of Shares Outstanding, Basic | 2,109,000 | 2,100,000 | 2,109,000 | 2,100,000 |
| Earnings Per Share, Diluted | $ (0.00) | $ (0.01) | ||
| Weighted Average Number of Shares Outstanding, Diluted | 2,109,000 | 2,100,000 | 2,109,000 | 2,100,000 |
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies |
9 Months Ended |
|---|---|
Mar. 31, 2017 | |
| Notes | |
| Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies |
NOTE 1. NATURE AND BACKGROUND OF BUSINESS
Extract Pharmaceuticals, Inc. ("the Company" or "the Issuer") was organized under the laws of the State of Delaware on March 6, 2014 under the name Pacific Media Group Enterprises, Inc. The Company was established as part of the Chapter 11 Plan of Reorganization of Pacific Shores Development, Inc. ("PSD"). Initially the Company was engaged in the business of developing mobile apps designed (a) to allow patients/clients to see fee quotes from professionals for their professional services. and (b) to provide these professionals with prospects or leads for new patients/clients. On April 7, 2017 the Company amended its Certificate of Incorporation with the Secretary of State of Delaware, changing its name from Pacific Media Group Enterprises Inc. to Extract Pharmaceuticals Inc. The Company also left the mobile app development business and began development of products based on chewing gum delivery of medicinal cannabis oils.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), and include all the notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation of the financial statements have been included.
b. USE OF ESTIMATES
The preparation of financial statements in conformity with 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. Actual results could differ from those estimates.
c. BASIC AND DILUTED NET LOSS PER SHARE
Net loss per share is calculated in accordance with Codification topic 260, “Earnings Per Share” for the periods presented. Basic net loss per share is computed using the weighted average number of common shares outstanding. Diluted loss per share has not been presented because there are no dilutive items. Diluted earnings loss per share is based on the assumption that all dilutive stock options, warrants, and convertible debt are converted or exercised by applying the treasury stock method. Under this method, options and warrants are assumed exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Options, warrants and/or convertible debt will have a dilutive effect, during periods of net profit, only when the average market price of the common stock during the period exceeds the exercise or conversion price of the items.
d. CASH and CASH EQUIVALENTS
For the Balance Sheets and Statements of Cash Flows, all highly liquid investments with initiated maturity of three months or less are considered to be cash equivalents. The Company had no cash equivalents as of March 31, 2017.
e. REVENUE RECOGNITION
The Company recognizes revenue in accordance with ASC topic 605 “Revenue Recognition, and other applicable revenue recognition guidance under US GAAP. Sales revenue is recognized for our retail and wholesale customers when: (i) persuasive evidence of a sales arrangement exists, (ii) the sales terms are fixed or determinable, (iii) title and risk of loss have transferred, and (iv) collectability is reasonably assured — generally when products are shipped to the customer and services are rendered, except in situations in which title passes upon receipt of the products by the customer. In this case, revenues are recognized upon services rendered.
f. ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS
Accounts receivable are recorded at invoiced amount and generally do not bear interest. An allowance for doubtful accounts is established, as necessary, based on past experience and other factors which, in management's judgment, deserve current recognition in estimating bad debts. Such factors include growth and composition of accounts receivable, the relationship of the allowance for doubtful accounts to accounts receivable, and current economic conditions. The determination of the collectability of amounts due requires the Company to make judgments regarding future events and trends. Allowances for doubtful accounts are determined based on assessing the Company’s portfolio on an individual customer and on an overall basis. This process consists of a review of historical collection experience, current aging status of the customer account, and the financial condition of the Company’s customers. Based on a review of these factors, the Company establishes or adjusts the allowance for specific customers and the accounts receivable portfolio as a whole. At March 31, 2017 and June 30, 2016 an allowance for doubtful accounts was not considered necessary as there were no accounts receivable.
g. SHARE-BASED COMPENSATION
Codification topic 718 “Stock Compensation” requires the cost resulting from all share-based transactions be recorded in the financial statements and establishes fair value as the measurement objective for share-based payment transactions with employees and acquired goods or services from non-employees. The codification also provides guidance on valuing and expensing these awards, as well as disclosure requirements of these equity arrangements. The Company adopted the codification upon its creation and will expense share based costs in the period incurred. The Company completed one share-based transaction for mobile app development and programming services on April 1, 2016 valued at $9,000.
h. INCOME TAXES
Income taxes are provided in accordance with the FASB Accounting Standards Classification. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
i. IMPACT OF NEW ACCOUNTING STANDARDS
The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company's results of operations, financial position, or cash flow.
|
Substantial Doubt about Going Concern |
9 Months Ended |
|---|---|
Mar. 31, 2017 | |
| Notes | |
| Substantial Doubt about Going Concern |
NOTE 3. GOING CONCERN
The Company's financial statements are prepared in accordance with GAAP applicable to a going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. As of March 31, 2017 the Company did not have significant cash or other material assets, nor did it have operations or a source of revenue sufficient to cover its operating costs and allow it to continue as a going concern. The Company’s officers and directors have committed to advancing certain operating costs of the Company.
While the Company believes in will be able to generate sufficient revenues and/or raise additional funds, there can be no assurances that it will accomplish either. The Company’s ability to continue as a going concern is dependent upon its ability to achieve profitable operations or obtain adequate financing. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
|
Stockholders' Equity Note Disclosure |
9 Months Ended |
|---|---|
Mar. 31, 2017 | |
| Notes | |
| Stockholders' Equity Note Disclosure |
NOTE 4. STOCKHOLDERS' EQUITY
As of March 31, 2017 the authorized share capital of the Company consisted of 100,000,000 shares of common stock with $0.0001 par value, and 20,000,000 shares of preferred stock also with $0.0001 par value.
COMMON STOCK: The Company's first issuance of common stock, totaling 580,000 shares, took place on March 6, 2014 pursuant to the Chapter 11 Plan of Reorganization confirmed by the U.S. Bankruptcy Court in the matter of PSD. The Court ordered the distribution of shares in the Company to all general unsecured creditors of PSD, with these creditors to receive their PRO RATA share (according to amount of debt held) of a pool of 80,000 shares in the Company. The Court also ordered the distribution of shares in the Company to all administrative creditors of PSD, with these creditors to receive one share of common stock in the Company for each $0.10 of PSD's administrative debt which they held. A total of 500,000 shares were issued to PSD’s administrative creditors.
The Court also ordered the distribution of 2,500,000 warrants in the Company to all administrative creditors of PSD, with these creditors to receive five warrants in the Company for each $0.10 of PSD's administrative debt which they held. These creditors received 2,500,000 warrants consisting of 500,000 "A Warrants" each convertible into one share of common stock at an exercise price of $4.00; 500,000 "B Warrants" each convertible into one share of common stock at an exercise price of $5.00; 500,000 "C Warrants" each convertible into one share of common stock at an exercise price of $6.00; 500,000 "D Warrants" each convertible into one share of common stock at an exercise price of $7.00; and 500,000 "E Warrants" each convertible into one share of common stock at an exercise price of $8.00. All warrants are exercisable at any time prior to August 30, 2019. As of the date of this report, no warrants have been exercised.
On June 1, 2014 the Company issued 1,520,000 common shares for services at par value, $0.0001 per share for $152. On April 1, 2016 the Company issued 9,000 common shares for services related to mobile app programming and development valued at $1.00 per share for $9,000.
As a result of these issuances there were 2,109,000 common shares issued and outstanding, and a total of 2,500,000 warrants to acquire common shares issued and outstanding, at March 31, 2017.
PREFERRED STOCK: The authorized share capital of the Company includes 20,000,000 shares of preferred stock with $0.0001 par value. As of March 31, 2017 no shares of preferred stock had been issued and no shares of preferred stock were outstanding.
NOTE 5. INCOME TAXES
The Company has had no revenues and made no U.S. federal income tax provision since its inception on March 6, 2014.
|
Related Party Transactions Disclosure |
9 Months Ended | ||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | |||||||||||||||||||||||||||||||
| Notes | |||||||||||||||||||||||||||||||
| Related Party Transactions Disclosure |
NOTE 6. RELATED PARTY TRANSACTIONS
On June 1, 2014 the Company issued 1,520,000 shares of common stock in a private placement for services valued at par value of $0.0001 per share. Of these shares, 20,000 were issued to the former CEO and director of the Company and 1,500,000 were issued to the current CEO and director of the Company. On April 1, 2016 the Company issued a Note for $500 to the CEO of the company. On August 5, 2016 the Company issued a Note for $2,500 to the CFO and Secretary of the Company, and on August 25, 2016 the Company issued a second Note for $2,500 to the CFO and Secretary of the Company; on December 30, 2016 the Company issued a Note for $14,318 to the CFO and Secretary of the Company; and on March 30, 2017 the Company issued a Note for $3,174 to the CFO and Secretary of the Company. All five Notes are non-interest bearing. The unpaid principal balance on each of the four notes will be due and payable three years from the date of issuance of the notes. The conversion rate will be one (1) share of common stock for every one (1) dollar of debt principal converted. Since the price of the shares issued recently is same as the conversion price, there was no beneficial conversion feature.
The Company utilizes an office space of approximately 100 square feet in the residence of the Company’s CEO, which is provided at no cost by the CEO. The value of the space is immaterial. The space is believed to be adequate for the Company’s needs at this time.
|
Subsequent Events |
9 Months Ended |
|---|---|
Mar. 31, 2017 | |
| Notes | |
| Subsequent Events |
NOTE 7. SUBSEQUENT EVENTS
On April 7, 2017 the Company amended its Certificate of Incorporation with the State of Delaware, changing its name from Pacific Media Group Enterprises Inc. to Extract Pharmaceuticals Inc. and changing the number of authorized common shares from 100,000,000 to 300,000,000. The number of authorized preferred shares remained unchanged at 20,000,000.
Also on April 7, 2017 the Company affected a forward split of its shares, Fifty-Four (54) new shares for each One (1) old share. As a result of this the 2,109,000 common shares outstanding as of March 31, 2017 have been split such that 113,886,000 common shares are outstanding as of the date of the filing of this report on Form 10-Q.
On April 10, 2017 the Directors voted to terminate the Company’s involvement in the mobile application development business and to pursue instead the business of development and sale of products based on chewing gum delivery of medicinal cannabis oils. The Company sold all of its interest in the mobile application development business to its CFO and Secretary in exchange for cancellation of the Company’s Notes due to him which totaled $22,492. On the same date the Company repaid the loan of $500 due to its CEO, cancelling the Note payable to him.
Also on April 10, 2017 the Directors voted to appoint Mr. Peter E. Maddocks to the Board of Directors of the Company and also voted to appoint Mr. Maddocks as CEO and CFO of the Company. On the same date two Directors, Maurice Masters and Daniel Masters resigned their positions as Officers and Directors of the Company.
|
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies: Use of Estimates, Policy (Policies) |
9 Months Ended |
|---|---|
Mar. 31, 2017 | |
| Policies | |
| Use of Estimates, Policy |
b. USE OF ESTIMATES
The preparation of financial statements in conformity with 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. Actual results could differ from those estimates.
|
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies: Earnings Per Share, Policy (Policies) |
9 Months Ended |
|---|---|
Mar. 31, 2017 | |
| Policies | |
| Earnings Per Share, Policy |
c. BASIC AND DILUTED NET LOSS PER SHARE
Net loss per share is calculated in accordance with Codification topic 260, “Earnings Per Share” for the periods presented. Basic net loss per share is computed using the weighted average number of common shares outstanding. Diluted loss per share has not been presented because there are no dilutive items. Diluted earnings loss per share is based on the assumption that all dilutive stock options, warrants, and convertible debt are converted or exercised by applying the treasury stock method. Under this method, options and warrants are assumed exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Options, warrants and/or convertible debt will have a dilutive effect, during periods of net profit, only when the average market price of the common stock during the period exceeds the exercise or conversion price of the items.
|
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies: Cash and Cash Equivalents, Policy (Policies) |
9 Months Ended |
|---|---|
Mar. 31, 2017 | |
| Policies | |
| Cash and Cash Equivalents, Policy |
d. CASH and CASH EQUIVALENTS
For the Balance Sheets and Statements of Cash Flows, all highly liquid investments with initiated maturity of three months or less are considered to be cash equivalents. The Company had no cash equivalents as of March 31, 2017.
|
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies: Revenue Recognition, Policy (Policies) |
9 Months Ended |
|---|---|
Mar. 31, 2017 | |
| Policies | |
| Revenue Recognition, Policy |
e. REVENUE RECOGNITION
The Company recognizes revenue in accordance with ASC topic 605 “Revenue Recognition, and other applicable revenue recognition guidance under US GAAP. Sales revenue is recognized for our retail and wholesale customers when: (i) persuasive evidence of a sales arrangement exists, (ii) the sales terms are fixed or determinable, (iii) title and risk of loss have transferred, and (iv) collectability is reasonably assured — generally when products are shipped to the customer and services are rendered, except in situations in which title passes upon receipt of the products by the customer. In this case, revenues are recognized upon services rendered.
|
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies: Receivables, Policy (Policies) |
9 Months Ended |
|---|---|
Mar. 31, 2017 | |
| Policies | |
| Receivables, Policy |
f. ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS
Accounts receivable are recorded at invoiced amount and generally do not bear interest. An allowance for doubtful accounts is established, as necessary, based on past experience and other factors which, in management's judgment, deserve current recognition in estimating bad debts. Such factors include growth and composition of accounts receivable, the relationship of the allowance for doubtful accounts to accounts receivable, and current economic conditions. The determination of the collectability of amounts due requires the Company to make judgments regarding future events and trends. Allowances for doubtful accounts are determined based on assessing the Company’s portfolio on an individual customer and on an overall basis. This process consists of a review of historical collection experience, current aging status of the customer account, and the financial condition of the Company’s customers. Based on a review of these factors, the Company establishes or adjusts the allowance for specific customers and the accounts receivable portfolio as a whole. At March 31, 2017 and June 30, 2016 an allowance for doubtful accounts was not considered necessary as there were no accounts receivable.
|
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies: Compensation Related Costs, Policy (Policies) |
9 Months Ended |
|---|---|
Mar. 31, 2017 | |
| Policies | |
| Compensation Related Costs, Policy |
g. SHARE-BASED COMPENSATION
Codification topic 718 “Stock Compensation” requires the cost resulting from all share-based transactions be recorded in the financial statements and establishes fair value as the measurement objective for share-based payment transactions with employees and acquired goods or services from non-employees. The codification also provides guidance on valuing and expensing these awards, as well as disclosure requirements of these equity arrangements. The Company adopted the codification upon its creation and will expense share based costs in the period incurred. The Company completed one share-based transaction for mobile app development and programming services on April 1, 2016 valued at $9,000.
|
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies: Income Tax, Policy (Policies) |
9 Months Ended |
|---|---|
Mar. 31, 2017 | |
| Policies | |
| Income Tax, Policy |
h. INCOME TAXES
Income taxes are provided in accordance with the FASB Accounting Standards Classification. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. |
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies: New Accounting Pronouncements, Policy (Policies) |
9 Months Ended |
|---|---|
Mar. 31, 2017 | |
| Policies | |
| New Accounting Pronouncements, Policy |
i. IMPACT OF NEW ACCOUNTING STANDARDS
The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company's results of operations, financial position, or cash flow.
|
Related Party Transactions Disclosure: Schedule of Related Party Transactions (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | |||||||||||||||||||||||||||||||
| Tables/Schedules | |||||||||||||||||||||||||||||||
| Schedule of Related Party Transactions |
|
Related Party Transactions Disclosure: Schedule of Related Party Transactions (Details) - USD ($) |
Dec. 31, 2016 |
Aug. 25, 2016 |
Apr. 01, 2016 |
Jun. 01, 2014 |
|---|---|---|---|---|
| Details | ||||
| Shares issued to Former CEO | 20,000 | |||
| Shares issued to Current CEO | 1,500,000 | |||
| Total Shares Issu | 1,520,000 | |||
| Note Issued to CEO | $ 500 | |||
| Note Issued to CFO | $ 14,318 | $ 5,000 | ||
| Total Notes issued | $ 14,318 | $ 5,000 | $ 500 |