Delaware
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75-2100622
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(State or other jurisdiction of
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(I.R.S. Employer Identification No.)
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incorporation or organization)
|
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117 West 9th Street Suite 316 Los Angeles California
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90015
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer ☐
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Accelerated filer ☐
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Non-accelerated filer ☐
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Smaller reporting company ☒
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(Do not check if smaller reporting company)
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Emerging growth company ☐
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PART I. – FINANCIAL INFORMATION
|
||||
Item 1. Financial Statements
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4
|
|||
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
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18
|
|||
Item 3. Quantitative and Qualitative Disclosures about Market Risk
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22
|
|||
Item 4. Controls and Procedures
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22
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|||
PART II. – OTHER INFORMATION
|
||||
Item 1. Legal Proceedings
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24
|
|||
Item 1A. Risk Factors
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24
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|||
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
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24
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|||
Item 3. Defaults Upon Senior Securities
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24
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|||
Item 4. Mine Safety Disclosures
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24
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Item 5. Other Information
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25
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|||
Item 6. Exhibits
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26
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|||
Signatures
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27 |
Condensed Consolidated Balance Sheets as of September 30, 2017 (unaudited) and December 31, 2016
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4
|
|
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Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2017 and 2016 (unaudited)
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5
|
|
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Condensed Consolidated Statements of Cash Flows for the three and nine months ended September 30, 2017 and 2016 (unaudited)
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6
|
|
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Notes to the condensed consolidated financial statements (unaudited)
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7
|
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September 30,
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December 31,
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||||||
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2017
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2016
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||||||
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||||||||
ASSETS
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||||||||
Current Assets:
|
||||||||
Cash and cash equivalents
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$
|
23,549
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$
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25,284
|
||||
Accounts receivable
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6,589
|
983
|
||||||
Deposits
|
1,500
|
1,500
|
||||||
Total Current Assets
|
31,638
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27,767
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||||||
|
||||||||
Fixed Assets
|
||||||||
Fixed assets, net
|
28,841
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31,838
|
||||||
Total Fixed Assets
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28,841
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31,838
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||||||
|
||||||||
TOTAL ASSETS
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$
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60,479
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$
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59,605
|
||||
|
||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current Liabilities: | ||||||||
Accounts payable
|
$
|
146,085
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$
|
177,475
|
||||
Accrued expenses
|
280,463
|
231,060
|
||||||
Deferred revenue
|
-
|
15,042
|
||||||
Current portion, notes payable
|
313,500
|
1,000
|
||||||
Current portion, notes payable - related party
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109,281
|
-
|
||||||
Total Current Liabilities
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849,329
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424,577
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||||||
|
||||||||
Long-Term Liabilities: | ||||||||
Notes payable - related party
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247,183
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684,048
|
||||||
Notes payable
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409,821
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527,333
|
||||||
Total Long-Term Liabilities
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657,004
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1,211,381
|
||||||
|
||||||||
Total Liabilities
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$
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1,506,333
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$
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1,635,958
|
||||
|
||||||||
STOCKHOLDERS' EQUITY (DEFICIT)
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||||||||
Preferred stock, $0.001 par value, 10,000,000 shares authorized,
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||||||||
1,000,000 shares of Series E Preferred Stock issued and outstanding
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$
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1,000
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$
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1,000
|
||||
Common stock, $0.001 par value, 100,000,000 shares authorized
|
||||||||
29,952,533 and 27,297,364 shares issued and outstanding,
|
||||||||
respectively
|
29,953
|
27,277
|
||||||
Additional paid in capital
|
4,204,053
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3,722,472
|
||||||
Accumulated deficit
|
(5,680,860
|
)
|
(5,327,102
|
)
|
||||
|
||||||||
Total Stockholders' Equity (Deficit)
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(1,445,853
|
)
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(1,576,353
|
)
|
||||
|
||||||||
Total Liabilities and Stockholders' Equity (Deficit)
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$
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60,479
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$
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59,605
|
|
For the Three Months
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For the Nine Months
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||||||||||||||
|
Ended September 30,
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Ended September 30,
|
||||||||||||||
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2017
|
2016
|
2017
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2016
|
||||||||||||
|
||||||||||||||||
Sales, net of discounts
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$
|
-
|
$
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-
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$
|
-
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$
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3,780
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||||||||
Cost of Goods Sold
|
-
|
-
|
-
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(2,020
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)
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|||||||||||
Gross Profit
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-
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-
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-
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1,760
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||||||||||||
|
||||||||||||||||
Operating Expenses
|
||||||||||||||||
Selling, general and administrative
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90,951
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89,812
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296,676
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219,952
|
||||||||||||
Penalty on Payroll Taxes
|
-
|
-
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12,807
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-
|
||||||||||||
Depreciation expense
|
1,000
|
998
|
2,997
|
2,995
|
||||||||||||
Financing Cost
|
-
|
-
|
22,500
|
-
|
||||||||||||
Salaries and wages
|
-
|
-
|
6,437
|
19,496
|
||||||||||||
Operating Expenses/(Loss)
|
91,951
|
90,810
|
341,417
|
242,443
|
||||||||||||
|
||||||||||||||||
Loss from Operations
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(91,951
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)
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(90,810
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)
|
(341,417
|
)
|
(240,683
|
)
|
||||||||
|
||||||||||||||||
Other Non-Operating Income and Expenses
|
||||||||||||||||
License Fees Income/Expenses
|
-
|
18,750
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-
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(135,750
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)
|
|||||||||||
Interest expense
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(16,439
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)
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(3,000
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)
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(34,231
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)
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(8,500
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)
|
||||||||
Forgiveness of Debt
|
-
|
-
|
6,849
|
-
|
||||||||||||
Extraordinary Items
|
-
|
-
|
15,042
|
-
|
||||||||||||
|
||||||||||||||||
Net Income/(Loss) before Income Taxes
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(108,390
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)
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(75,060
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)
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(353,758
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)
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(384,933
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)
|
||||||||
|
||||||||||||||||
Provision for income taxes
|
-
|
-
|
-
|
-
|
||||||||||||
|
||||||||||||||||
Net Income/(Loss)
|
$
|
(108,390
|
)
|
$
|
(75,060
|
)
|
$
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(353,758
|
)
|
$
|
(384,933
|
)
|
||||
|
||||||||||||||||
Basic and Diluted Loss per Share - Common Stock
|
$
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(0.00
|
)
|
$
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(0.00
|
)
|
$
|
(0.00
|
)
|
$
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(0.01
|
)
|
||||
|
||||||||||||||||
Weighted Average Number of Shares Outstanding:
|
||||||||||||||||
Basic and Diluted Common Stock
|
33,685,624
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24,019,901
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29,931,607
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28,264,864
|
|
For the Nine Months Ended
|
|||||||
|
September 30,
|
|||||||
|
2017
|
2016
|
||||||
|
||||||||
OPERATING ACTIVITIES
|
||||||||
Net loss
|
$
|
(353,758
|
)
|
$
|
(395,777
|
)
|
||
Adjustments to reconcile net loss to
|
||||||||
net cash used in operating activities:
|
||||||||
Shares issued for services
|
-
|
-
|
||||||
Depreciation
|
2,996
|
2,995
|
||||||
Changes in operating assets and liabilities
|
||||||||
Accounts receivable
|
(5,406
|
)
|
-
|
|||||
Inventory
|
-
|
2,020
|
||||||
Deposits
|
-
|
4,880
|
||||||
Accounts payable & accrued liabilities
|
(2,479
|
)
|
6,790
|
|||||
Proceeds from notes payable
|
-
|
|||||||
Repayment of notes payable
|
88,047
|
-
|
||||||
Accrued expenses
|
-
|
|||||||
Unearned Revenue
|
-
|
(37,500
|
)
|
|||||
Net Cash Used in Operating Activities
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(270,599
|
)
|
(416,592
|
)
|
||||
|
||||||||
FINANCING ACTIVITIES
|
||||||||
Proceeds from notes payable
|
158,000
|
10,000
|
||||||
Repayment of notes payable
|
(377,333
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)
|
-
|
|||||
Notes Converted to equity
|
412,333
|
-
|
||||||
Common stock issued for cash
|
76,863
|
106,951
|
||||||
Proceeds from related party notes payable
|
7,500
|
175,155
|
||||||
Inventory Deposit
|
200,000
|
|||||||
Repayment of note payable - related party
|
(8,500
|
)
|
-
|
|||||
Net Cash Provided by Financing Activities
|
268,863
|
492,106
|
||||||
|
||||||||
NET INCREASE (DECREASE) IN CASH
|
(1,736
|
)
|
75,514
|
|||||
CASH AT BEGINNING OF PERIOD
|
25,284
|
(790
|
)
|
|||||
|
||||||||
CASH AT END OF PERIOD
|
$
|
23,549
|
$
|
74,724
|
September 30,
2017
|
December 31,
2016
|
|||||||
Computers
|
$
|
15,986
|
$
|
15,986
|
||||
Freezers
|
39,153
|
39,153
|
||||||
Office Furniture
|
15,687
|
15,687
|
||||||
Rugs
|
6,000
|
6,000
|
||||||
Software - Accounting
|
2,901
|
2,901
|
||||||
Telephone System
|
5,814
|
5,814
|
||||||
Video Camera
|
1,528
|
1,528
|
||||||
Accumulated Depreciation
|
(58,227
|
)
|
(55,231
|
)
|
||||
Net Book Value
|
$
|
28,841
|
$
|
31,838
|
Noteholder
|
Note Amount
|
Issuance Date
|
Unpaid Amount
|
||||||
S. Masjedi
|
$
|
150,000
|
12/10/2010
|
$
|
122,692
|
||||
A. Masjedi
|
500,000
|
6/1/2013
|
191,772
|
||||||
M. Shenkman
|
10,000
|
2/21/2012
|
10,000
|
||||||
M. Shenkman
|
10,000
|
2/23/2102
|
10,000
|
||||||
M. Shenkman
|
10,000
|
3/14/2013
|
6,000
|
||||||
M. Shenkman
|
16,000
|
9/9/2014
|
16,000
|
||||||
Total
|
$
|
696,000
|
|
$
|
356,464
|
Note Amount
|
Issuance Date
|
Unpaid Amount
|
|||||||
$
|
10,000
|
February 2014
|
$
|
1,000
|
|||||
272,500
|
9/30/2017
|
272,500
|
|||||||
50,000
|
9/30/2017
|
50,000
|
|||||||
50,000
|
9/30/2017
|
50,000
|
|||||||
15,000
|
7/22/2013
|
15,000
|
|||||||
86,821
|
3/14/2013
|
86,821
|
|||||||
30,000
|
2/1/2012
|
25,000
|
|||||||
500,000
|
5/19/2014
|
175,000
|
|||||||
-
|
48,000
|
||||||||
Total:
|
$
|
914,321
|
$
|
723,321
|
As of September 30, 2017
|
As of December 31, 2016
|
|||||||||||||||
Current
|
Long Term
|
Current
|
Long Term
|
|||||||||||||
Notes Payable - Related
|
$
|
109,281
|
$
|
247,183
|
$
|
110,081
|
$
|
404,636
|
||||||||
Notes Payable
|
313,500
|
409,821
|
26,510
|
671,154
|
||||||||||||
Total
|
422,781
|
657,004
|
136,591
|
1,075,790
|
· |
we do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act");
|
· |
we do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our limited size and early stage nature of operations, segregation of all conflicting duties may not always be possible and may not be economically feasible; however, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals;
|
· |
we do not have an independent audit committee of our Board of Directors;
|
· |
insufficient monitoring and review controls over the financial reporting closing process, including the lack of individuals with current knowledge of GAAP that led to the restatement of our previously issued financial statements; and
|
· |
we continue to outsource the functions of controller on an interim basis to assist us in implementing the necessary financial controls over the financial reporting and the utilization of internal management and staff to effectuate these controls.
|
Exhibit
|
|
|
|
Number
|
|
Description
|
|
|
|||
10.11 | |||
10.12 | |||
10.13 | |||
101.INS*
|
|
XBRL Instance Document
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
* Filed herewith.
** Furnished herewith.
|
|
PACIFIC VENTURES GROUP, INC.
|
|
|
|
|
Date: November 20, 2017
|
By:
|
/s/ Shannon Masjedi
|
|
|
Shannon Masjedi
|
|
|
President, Chief Executive Officer and Interim Chief Financial Officer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
|
|
|
|
/s/ Shannon Masjedi
|
|
Shannon Masjedi
|
|
President and Chief Executive Officer
|
/s/ Shannon Masjedi
|
|
Shannon Masjedi
|
|
Interim Chief Financial Officer
|
/s/ Shannon Masjedi
|
|
Shannon Masjedi
|
|
President, Chief Executive Officer and
Interim Chief Financial Officer
|
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Nov. 17, 2017 |
|
Document And Entity Information | ||
Entity Registrant Name | Pacific Ventures Group, Inc. | |
Entity Central Index Key | 0000882800 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 27,264,864 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2017 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred Stock, shares issued | 1,000,000 | 1,000,000 |
Preferred Stock, shares outstanding | 1,000,000 | 1,000,000 |
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 100,000,000 | 100,000,000 |
Common Stock, shares issued | 29,952,533 | 27,297,364 |
Common Stock, shares outstanding | 29,952,533 | 27,297,364 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Income Statement [Abstract] | ||||
Sales, net of discounts | $ 0 | $ 0 | $ 0 | $ 3,780 |
Cost of Goods Sold | 0 | 0 | 0 | (2,020) |
Gross Profit | 0 | 0 | 0 | 1,760 |
Operating Expenses | ||||
Selling, general and administrative | 90,951 | 89,812 | 296,676 | 219,952 |
Penalty on Payroll Taxes | 0 | 0 | 12,807 | 0 |
Depreciation expense | 1,000 | 998 | 2,997 | 2,995 |
Financing Cost | 0 | 0 | 22,500 | 0 |
Salaries and wages | 0 | 0 | 6,437 | 19,496 |
Operating Expenses/(Loss) | 91,951 | 90,810 | 341,417 | 242,443 |
Loss from Operations | (91,951) | (90,810) | (341,417) | (240,683) |
License Fees Income/Expenses | 0 | 18,750 | 0 | (135,750) |
Interest expense | (16,439) | (3,000) | (34,231) | (8,500) |
Forgiveness of Debt | 0 | 0 | 6,849 | 0 |
Extraordinary Items | 0 | 0 | 15,042 | 0 |
Net Income/(Loss) before Income Taxes | (108,390) | (75,060) | (353,758) | (384,933) |
Provision for income taxes | 0 | 0 | 0 | 0 |
Net Income/(Loss) | $ (108,390) | $ (75,060) | $ (353,758) | $ (384,933) |
Basic and Diluted Loss per Share - Common Stock | $ (0.00) | $ (0.00) | $ (0.00) | $ (0.01) |
Weighted Average Number of Shares Outstanding: | ||||
Basic and Diluted | 33,685,624 | 24,019,901 | 29,931,607 | 28,264,864 |
1 NATURE OF OPERATIONS |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS |
1. NATURE OF OPERATIONS
The Company and Nature of Business
Pacific Ventures Group, Inc. (the "Company," "we," "us" or "our") was incorporated under the laws of the state of Delaware on October 3, 1986, under the name AOA Corporation. On November 12, 1991, the Company changed its name to American Eagle Group, Inc. On October22, 2012, the Company changed its name to "Pacific Ventures Group, Inc.".
The current structure of the Company resulted from a share exchange with Snöbar Holdings, Inc. ("Snöbar Holdings"), which was treated as a reverse merger for accounting purposes. On August 14, 2015, the Company entered into a share exchange agreement (the "Share Exchange Agreement") with Snöbar Holdings, pursuant to which the Company acquired 100% of the issued and outstanding shares of Snöbar Holdings' Class A and Class B common stock in exchange for 22,500,000 restricted shares of the Company's common stock, while simultaneously issuing 2,500,000 restricted shares of the Company's common stock to certain other persons, including for services provided and to a former officer of the Company (the "Share Exchange").
As the result of the Share Exchange, Snöbar Holdings became the Company's wholly owned operating subsidiary and the business of Snöbar Holdings became the Company's sole business operations and MAS Global Distributors, Inc., a California corporation ("MGD"), became an indirect subsidiary of the Company.
Prior to the Share Exchange, the Company operated as an insurance holding company and through its subsidiaries, which marketed and underwrote specialized property and casualty coverage in the general aviation insurance marketplace. However, in 1997, after selling several of its divisions, the Company's remaining insurance operations were placed into receivership and the Company ceased operating its insurance business.
Since the Share Exchange represents a change in control of the Company and a change in business operations, the business operations changed to that of Snöbar Holdings and the discussions of business operations accompanying this filing are solely that of Snöbar Holdings and its affiliates and subsidiaries comprising of Snöbar Trust, International Production Impex Corporation, a California corporation ("IPIC"), and MGD.
Snöbar Holdings was formed under the laws of the State of Delaware on January 7, 2013. Snöbar Holdings is the trustor and sole beneficiary of Snöbar Trust, a California trust ("Trust"), which was formed in June 1, 2013. The current trustee that holds legal title to the Trust is Clark Rutledge, the father of Shannon Masjedi, the Company's President, Chief Executive Officer, Interim Chief Financial Officer, Treasurer, and majority stockholder. The Trust owns 100% of the shares of IPIC, which was formed on August 2, 2001. IPIC is in the business of selling alcohol-infused ice cream and ice-pops, and holds all of the rights to the liquor licenses to sell such products and trade names "Snöbar". As such, the Trust holds all ownership interest of IPIC and its liquor licenses, permitting IPIC to sell its product to distributors, with all income, expense, gains and losses rolling up to the Trust, of which Snöbar Holdings is the sole beneficiary. Snöbar Holdings also owns 99.9% of the shares of MGD. MGD is in the business of selling and leasing freezers and providing marketing services. As a result of the foregoing, Snöbar Holdings is the primary beneficiary of all assets, liabilities and any income received from the business of the Trust and IPIC through the Trust and is the parent company of MGD.
The Trust and IPIC are considered variable interest entities ("VIEs") and Snöbar Holdings is identified as the primary beneficiary of the Trust and IPIC. Under the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 810, Snöbar Holdings performs ongoing reassessments of whether it is the primary beneficiary of a VIE. As the assessment of Snöbar Holdings' management is that Snöbar Holdings has the power to direct the activities of a VIE that most significantly impact the VIE's activities (it is responsible for establishing and operating IPIC), and the obligation to absorb losses of the VIE that could potentially be significant to the VIE and the right to receive benefits from the VIE that could potentially be significant to the VIE's economic performance, it was therefore concluded by management that Snöbar Holdings is the primary beneficiary of the Trust and IPIC. As such, the Trust and IPIC were consolidated in the financial statements of Snöbar Holdings since the inception of the Trust, in the case of the Trust, and since the inception of Snöbar Holdings, in the case of IPIC.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company, Snöbar Holdings and its subsidiaries, in which Snöbar Holdings has a controlling voting interest and entities consolidated under the variable interest entities ("VIE") provisions of ASC 810, "Consolidation" ("ASC 810"). Inter-company balances and transactions have been eliminated upon consolidation.
The Company applies the provisions of ASC 810 which provides a framework for identifying VIEs and determining when a company should include the assets, liabilities, non-controlling interests and results of activities of a VIE in its consolidated financial statements.
In general, a VIE is a corporation, partnership, limited-liability corporation, trust, or any other legal structure used to conduct activities or hold assets that either (1) has an insufficient amount of equity to carry out its principal activities without additional subordinated financial support, (2) has a group of equity owners that is unable to make significant decisions about its activities, (3) has a group of equity owners that does not have the obligation to absorb losses or the right to receive returns generated by its operations or (4) the voting rights of some investors are not proportional to their obligations to absorb the expected losses of the entity, their rights to receive the expected residual returns of the entity, or both and substantially all of the entity's activities (for example, providing financing or buying assets) either involve or are conducted on behalf of an investor that has disproportionately fewer voting rights.
ASC 810 requires a VIE to be consolidated by the party with an ownership, contractual or other financial interest in the VIE (a variable interest holder) that has both of the following characteristics: a) the power to direct the activities of a VIE that most significantly impact the VIE's economic performance and b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE, or the right to receive benefits from the VIE that could potentially be significant to the VIE.
A variable interest holder that consolidates the VIE is called the primary beneficiary. If the primary beneficiary of a variable interest entity (VIE) and the VIE are under common control, the primary beneficiary shall initially measure the assets, liabilities, and non-controlling interests of the VIE at amounts at which they are carried in the accounts of the reporting entity that controls the VIE (or would be carried if the reporting entity issued financial statements prepared in conformity with generally accepted accounting principles). ASC 810 also requires disclosures about VIEs in which the variable interest holder is not required to consolidate but in which it has a significant variable interest.
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2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
9 Months Ended |
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Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the Company, Snöbar Holdings, MGD, IPIC, and the Trust, which was established to hold IPIC, which in turn holds liquor licenses. All inter-company accounts have been eliminated during consolidation. See the discussion in Note 1 above for variable interest entity treatment of the Trust and IPIC.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Revenue Recognition
Sales revenues are generally recognized in accordance with the SAB 104 Public Company Guidance, when an agreement exists and price is determinable, the products are shipped to the customers or services are rendered, net of discounts, returns and allowance and collectability is reasonably assured. We are often entitled to bill our customers and receive payment from our customers in advance of recognizing the revenue. In the instances in which we have received payment from our customers in advance of recognizing revenue, we include the amounts in deferred or unearned revenue on our consolidated balance sheet.
Unearned Revenue
Certain amounts are received pursuant to agreements or contracts and may only be used in the conduct of specified transactions or the related services are yet to be performed. These amounts are recorded as unearned or deferred revenue and are recognized as revenue in the year/period the related expenses are incurred or services are performed. As at September 30, 2017, the Company has $0 in deferred revenue as a result of prepayment by two of its customers. This is comparable to the Company year-end deferred revenue balance of $15,042 as of December 31, 2016, which was as a result of prepayment by two of its customers.
Shipping and Handling Costs
The Company's shipping costs are all recorded as operating expenses for all periods presented.
Disputed Liabilities
The Company is involved in a variety of disputes, claims, and proceedings concerning its business operations and certain liabilities. We determine whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. We assess our potential liability by analyzing our litigation and regulatory matters using available information. We develop our views on estimated losses in consultation with outside counsel handling our defense in these matters, which involves an analysis of potential results, assuming a combination of litigation and settlement strategies. Should developments in any of these matters cause a change in our determination as to an unfavorable outcome and result in the need to recognize a material accrual, or should any of these matters result in a final adverse judgment or be settled for significant amounts, they could have a material adverse effect on our results of operations, cash flows and financial position in the period or periods in which such change in determination, judgment or settlement occurs. As of September 30, 2017, the Company has $31,858 in disputed liabilities on its balance sheet.
In addition, on January 28, 2016, a labor dispute between IPIC and a former employee was ruled in favor of the former employee by the Labor Commissioner of the State of California. This finding resulted in compensation expenses of $29,103 and an accrued liability of the same amount on IPIC book for the nine months ended September 30, 2017.
Cash Equivalents
The Company considers highly liquid instruments with original maturity of three months or less to be cash equivalents. As of September 30, 2017, the Company has a cash balance of $23,549 in cash and cash equivalents, compared to $25,284 at December 31, 2016.
Accounts Receivable
Accounts receivable are stated at net realizable value. This value includes an appropriate allowance for estimated uncollectible accounts. The allowance is calculated based upon the level of past due accounts and the relationship with and financial status of our customers. The Company did not write off any bad debts during the nine months ended September 30, 2017 and 2016, and thus has not set an allowance for doubtful accounts.
Inventories
Inventories are stated at the lower of cost or market value. Cost has been determined using the first-in, first-out method. Inventory quantities on-hand are regularly reviewed, and where necessary, reserves for excess and unusable inventories are recorded. Inventory consists of finished goods and includes ice cream, popsicles and the related packaging materials. As of December 31, 2016 and September 30, 2017, the Company has $0 in inventories.
Income Taxes
Deferred taxes are provided on an asset and liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the difference between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Net Income/(Loss) Per Common Share
Income/(loss) per share of common stock is calculated by dividing the net income/(loss) by the weighted average number of shares of common stock outstanding during the period. The Company has no potentially dilutive securities. Accordingly, basic and dilutive income/(loss) per common share are the same.
Property and Equipment
Property and equipment are carried at cost less accumulated depreciation and includes expenditures that substantially increase the useful lives of existing property and equipment. Maintenance, repairs, and minor renovations are expensed as incurred. Upon sale or retirement of property and equipment, the cost and related accumulated depreciation are eliminated from the respective accounts and the resulting gain or loss is included in the results of operations. The Company provides for depreciation of property and equipment using the straight-line method over the estimated useful lives or the term of the lease, as appropriate. The estimated useful lives are as follows: vehicles, five years; office furniture and equipment, three to fifteen years; equipment, three years.
Fair Value of Financial Instruments
The carrying amounts of the Company's financial instruments, which include cash, accounts receivable, accounts payable, and accrued expenses are representative of their fair values due to the short-term maturity of these instruments.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and accounts receivable. The Company maintains cash balances at financial institutions within the United States which are insured by the Federal Deposit Insurance Corporation ("FDIC") up to limits of approximately $250,000. The Company has not experienced any losses with regard to its bank accounts and believes it is not exposed to any risk of loss on its cash bank accounts.
Critical Accounting Policies
The Company considers revenue recognition and the valuation of accounts receivable, allowance for doubtful accounts, and inventory and reserves as its significant accounting policies. Some of these policies require management to make estimates and assumptions that may affect the reported amounts in the Company's financial statements.
Recent Accounting Pronouncements
In June 2009, the FASB established the Accounting Standards Codification ("Codification" or "ASC") as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance with generally accepted accounting principles in the United States ("GAAP"). Rules and interpretive releases of the Securities and Exchange Commission (the "SEC") issued under authority of federal securities laws are also sources of GAAP for SEC registrants. Existing GAAP was not intended to be changed as a result of the Codification, and accordingly the change did not impact our financial statements. The ASC does change the way the guidance is organized and presented.
In April 2015, FASB issued Accounting Standards Update ("ASU") No. 2015-03, "Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs", to simplify presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The ASU does not affect the recognition and measurement guidance for debt issuance costs. For public companies, the ASU is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early application is permitted.
In April 2015, FASB issued ASU No. 2015-04, "Compensation – Retirement Benefits (Topic 715): Practical Expedient for the Measurement Date of an Employer's Defined Benefit Obligation and Plan Assets", which permits the entity to measure defined benefit plan assets and obligations using the month-end that is closest to the entity's fiscal year-end and apply that practical expedient consistently from year to year. The ASU is effective for public business entities for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early application is permitted.
In April 2015, FASB issued ASU No. 2015-05, "Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement", which provides guidance to customers about whether a cloud computing arrangement includes a software license. If such includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If the arrangement does not include a software license, the customer should account for it as a service contract. For public business entities, the ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early application is permitted. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.
In April 2015, FASB issued ASU No. 2015-06, "Earnings Per Share (Topic 260): Effects on Historical Earnings per Unit of Master Limited Partnership Dropdown Transactions", which specifies that, for purposes of calculating historical earnings per unit under the two-class method, the earnings (losses) of a transferred business before the date of a drop down transaction should be allocated entirely to the general partner. In that circumstance, the previously reported earnings per unit of the limited partners (which is typically the earnings per unit measure presented in the financial statements) would not change as a result of the dropdown transaction. Qualitative disclosures about how the rights to the earnings (losses) differ before and after the dropdown transaction occurs for purposes of computing earnings per unit under the two-class method also are required. The ASU is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Earlier application is permitted.
In June 2014, FASB issued ASU No. 2014-10, "Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation". The update removes all incremental financial reporting requirements from GAAP for development stage entities, including the removal of Topic 915 from the FASB Accounting Standards Codification. In addition, the update adds an example disclosure in Risks and Uncertainties (Topic 275) to illustrate one way that an entity that has not begun planned principal operations could provide information about the risks and uncertainties related to the company's current activities. Furthermore, the update removes an exception provided to development stage entities in Consolidations (Topic 810) for determining whether an entity is a variable interest entity-which may change the consolidation analysis, consolidation decision, and disclosure requirements for a company that has an interest in a company in the development stage. The update is effective for the annual reporting periods beginning after December 15, 2014, including interim periods therein. Early application is permitted with the first annual reporting period or interim period for which the entity's financial statements have not yet been issued (Public business entities) or made available for issuance (other entities). Our company adopted this pronouncement.
In June 2014, FASB issued ASU No. 2014-12, "Compensation – Stock Compensation (Topic 718); Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period". The amendments in this ASU apply to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. For all entities, the amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. Entities may apply the amendments in this ASU either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. If retrospective transition is adopted, the cumulative effect of applying this Update as of the beginning of the earliest annual period presented in the financial statements should be recognized as an adjustment to the opening retained earnings balance at that date. Additionally, if retrospective transition is adopted, an entity may use hindsight in measuring and recognizing the compensation cost. This updated guidance is not expected to have a material impact on our results of operations, cash flows or financial condition.
In August 2014, the FASB issued ASU 2014-15 on "Presentation of Financial Statements Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern". Currently, there is no guidance in GAAP about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern or to provide related footnote disclosures. The amendments in this Update provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity's ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management's plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management's plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued).
All other newly issued accounting pronouncements which are not yet effective have been deemed either immaterial or not applicable.
We reviewed all other recently issued accounting pronouncements and determined these have no current applicability to the Company or their effect on the financial statements would not have been significant.
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3 GOING CONCERN |
9 Months Ended |
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Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN |
3. GOING CONCERN
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As shown in the accompanying consolidated financial statements, the Company has incurred a net loss of $352,405 for the nine months ended September 30, 2017, and has an accumulated deficit of $5,679,506 as at September 30, 2017.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company is significantly dependent upon its ability, and will continue to attempt, to secure equity and/or additional debt financing. There are no assurances that the Company will be successful and without sufficient financing it would be unlikely for the Company to continue as a going concern.
The unaudited consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence. These conditions raise substantial doubt about the Company's ability to continue as a going concern. These unaudited consolidated financial statements do not include any adjustments that might arise from this uncertainty.
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4 INVENTORIES |
9 Months Ended |
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Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
INVENTORIES |
4. INVENTORIES No inventories were recorded as September 30, 2017 and 2016. |
5 PROPERTY, PLANT AND EQUIPMENT |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY, PLANT AND EQUIPMENT |
5. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment at September 30, 2017 and December 31, 2016, consisted of:
Depreciation expense for the nine months ended September 30, 2017 was $2,997 compared to $2,993 for the same period of September 30, 2016.
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6 ACCRUED EXPENSE |
9 Months Ended |
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Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSE |
6. ACCRUED EXPENSE
As of September 30, 2017, the Company had accrued expenses of $280,463 compared to $231,060, for the year-end December 31, 2016.
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7 INCOME TAX |
9 Months Ended |
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Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX |
7. INCOME TAX
The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
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8 RELATED PARTY TRANSACTIONS |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RELATED PARTY TRANSACTIONS |
8. RELATED PARTY TRANSACTIONS
The following table presents a summary of the Company's promissory notes issued to related parties as of September 30, 2017:
The following description represent note payable-related party transaction pre-Share Exchange that were assumed by the Company as a condition to the Share Exchange:
In January 2011, MGD, which is now a majority owned subsidiary of Snöbar Holdings, entered into an unsecured promissory note with Mrs. Masjedi, who is now the Company's President, Chief Executive Officer, Interim Chief Financial Officer, director and majority stockholder. The note had a principal balance of $150,000 with an interest rate of 3% and has a maturity date of December 31, 2020. Interest against the note was extinguished in a subsequent extension of the term of the note. The balance of the note at September 30, 2017 was $130,692.
On February 21, 2012, Snöbar Holdings entered into an unsecured promissory note with Mr. Shenkman, who is Chairman of the Board of Directors and a shareholder of the Company. The note had a principal balance of $10,000 with an interest rate of 5% and is due on demand. The note's maturity date has subsequently been extended to December 31, 2020. Interest against the note was extinguished in a subsequent extension of the term. The note had a principal balance of $10,000 as of September 30, 2017
On February 23, 2012, Snöbar Holdings entered into a promissory note with Mr. Shenkman for $10,000, maturing in one year at an interest of 8%. The note has subsequently been extended to December 31, 2020. Interest against the note was extinguished in a subsequent extension of the term. As of September 30, 2017, there was a $10,000 balance.
On March 14, 2013, Snöbar Holdings entered into an unsecured promissory note with a Mr. Shenkman, the Company's Chairman of the Board of Directors. The note had a principal balance of $10,000 with an interest rate of 5% and an original maturity date of March 14, 2014, subsequently extended to December 31, 2020 with a lower interest rate of 2%/year. Mr. Shenkman also agreed to make all interest retroactive and deferred. The note had an outstanding balance of $6,000 as of September 30, 2017.
On June 1, 2013, Snöbar Holdings entered into a promissory note with Azizolla Masjedi, father-in-law to Shannon Masjedi who's the Company's President, Chief Executive Officer, Interim Chief Financial Officer, director and majority stockholder, in an amount of $500,000 to purchase all the shares and interests of IPIC. The note matured on June 31, 2017. As of September 30, 2017 the balance on this note was $157,772.
On September 9, 2014, Snobar Holdings entered into a second unsecured promissory note with Mr. Shenkman, through his affiliate company Entrust Group for a total amount of $6,000 and a third unsecured promissory note for a total amount of $10,000, both at an annual interest rate of 2%. No term was provided for in each note, but Mr. Shenkman has agreed to a maturity date of December 31, 2020 and the accrual of interest rates and deferral to maturity. As of September 30, 2017, both notes had an aggregate balance of $16,000.
As of September 30, 2017, the Company had short term Notes Payable – Related Party of $109,281 and long term of $247,183.
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9 NOTES PAYABLE |
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NOTES PAYABLE |
9. NOTES PAYABLE
The following table presents a summary of the Company's promissory notes issued to unrelated third parties as of September 30, 2017:
The following description represent unrelated notes payable transactions pre-reverse merger between Snöbar and the Company that were assumed by the Company as a condition to the merger agreement:
In February, 2012, MGD entered into an unsecured promissory note with a certain unrelated party, now a shareholder of the Company for a principal balance of $30,000 at in interest rate of 8%/year and maturity date of August 1, 2014. The note's maturity date has been extended to December 31, 2020 and the interest rate extinguished as part of the extension. The note balance as of September 30, 2017 is $25,000.
On March 14, 2013, Snöbar Holdings entered into an unsecured promissory note with a certain unrelated third party, now a shareholder of the Company. The note had a principal balance of $86,821 with an interest rate of 5% and had a maturity date of March 14, 2014. The note's maturity date has subsequently been extended to February 1, 2020. Interest against the note was extinguished in a subsequent extension of the term. The note is current and the entire balance is still owed and outstanding.
On July 22, 2013, Snöbar Holdings entered into an unsecured promissory note with a certain unrelated third party. The note had a principal balance of $15,000 with an original interest rate of 5%. Maturity date has been extended to December 31, 2018, and interest rate has been reduced to 2%, and lender agreed to make all interest retroactive and deferred. The balance of the note was $15,000 as of September 30, 2017 and December 31, 2016.
In February 2014, MGD entered into a secured promissory note with a certain unrelated third party for $10,000. The note was secured by interests in tangible and intangible property of MGD. The Company is to make payments of $181 each business day (Monday through Friday) until the loan is paid off. The effective interest rate on the note is 137%. The note has been paid and the outstanding balance is $1,000 as of September 30, 2017.
On May 19, 2014, Snöbar Holdings entered into a secured convertible promissory note with a principal balance of $500,000. The note was secured by interests in cash, accounts receivable, other receivables, inventory, supplies, other assets of Snöbar Holdings including general intangibles and rights of each liquor license owned by Snöbar Trust. The note has an interest rate of 10% and an original maturity date of December 31, 2015. The Company was to make interest only payments beginning July 1, 2014. The lender determined Snöbar Holdings to be in default and on January 29, 2015, entered into a mutually agreed loan modification. The agreement increased the principal balance of the note as of December 31, 2014 to $527,333 and all interest due and payable was deemed to have been paid and the conversion rights of the note were removed. The modification also removed and deleted, in its entirety, all secured interests in cash, accounts receivable, other receivables, inventory, supplies, and other assets of Snöbar Holdings, including intangibles, and rights of each liquor license owned by Snöbar Trust.
The maturity date was December 31, 2015 if Snöbar Holdings is not in default, the maturity date of the note should automatically be extended to December 31, 2016 ("First Extended Maturity Date"). Commencing on January 1, 2016, Snöbar Holdings was to make monthly payments of $15,000 until the First Extended Maturity Date. Assuming Snöbar Holdings is not in default with respect to its obligations as of the First Extended Maturity Date, the note shall automatically be extended to December 31, 2017 ("Second Extended Maturity Date"). Commencing on January 1, 2017, the monthly payments increased to $25,000 for every month until the Second Extended Maturity Date. All accrued but unpaid interest, charges and the remaining principal balance of the note is fully due and payable on the Second Extended Maturity Date.1
In January of 2016 the company decided to enter into renegotiation period for the repayment terms of the modification dated January 29, 2015.
The following description represents unrelated note payable transactions post-merger between Snöbar and the Company:
On February 13, 2017, the Company entered settlement with one of its creditors for $527,333 of its long-term notes payable. The agreement called for issuance of 400,000 restricted shares of the Company's common stock and $200,000 in future cash payment comprising of $25,000 on March 31, 2017, $25,000 on March 31, 2018, $25,000 on March 31, 2019, and $125,000 on March 31, 2020. As of March 10, 2017, the Company has issued to the creditor, 400,000 restricted shares of the Company's common stock, and has also paid the $25,000 for the required March 31, 2017 cash payment. The balance of the note as of September 30, 2017 is $175,000.
Effective September 30, 2015, the Company entered into amended notes with a certain unrelated third party in an amount of $272,500, one for $172,500, and two others for $50,000 each. All of the notes have an interest rate of 8% and had a maturity date of August 13, 2017, but have been extended to November 15, 2017 for a fee of $15,000.
During August and September 2017, the Company entered into financing arrangements with two lending institutions for $158,000 secured by Company stock.
As of September 30, 2017, the Company had short term Notes Payable of $313,500 and long term of $409,821.
|
10 STOCKHOLDERS' EQUITY |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY |
10. STOCKHOLDERS' EQUITY
Share Exchange
On August 14, 2015, Snöbar Holdings entered into the Share Exchange Agreement with the Company and Snöbar Holdings' shareholders (the "Snöbar Shareholders") who held of record (i) at least 99% and up to 100% of the total issued and outstanding shares of Class A Common Stock and (ii) 100% of the total issued and outstanding shares of Class B Common Stock, of Snöbar Holding. In accordance with the terms and provisions of the Share Exchange Agreement, the Company acquired all of the issued and outstanding shares of Snöbar Holdings' Class A and Class B Common Stock from Snöbar Shareholders, with Snöbar Holdings becoming a wholly owned subsidiary of the Company, in exchange for the issuance to the Snöbar Shareholders of 22,500,000 shares of restricted common stock of the Company and the issuance of 2,500,000 restricted shares of the Company's common stock to certain other persons (as set forth below).
The 2,500,000 restricted shares of the Company's common stock were issued for the following: 600,000 shares were issued for services for a total of $326,900 of non-cash expenses; a former officer of the Company received 1,000,000 shares in exchange for his 1,000,000 shares of Series E Preferred Stock; and 900,000 shares were issued to extinguish $21,675 of debt due to a former officer and shareholder of the Company.
Common Stock and Preferred Stock
The Company is authorized to issue up to 10,000,000 shares of its preferred stock, $0.001 par value per share. Effective as of October 2016, the Company designated 1,000,000 shares of preferred stock as Series E Preferred Stock (the "Series E Preferred Stock"). Under the rights, preferences and privileges of the Series E Preferred Stock, for every share of Series E Preferred Stock held, the holder thereof has the voting rights equal to 10 shares of common stock. The Series E Preferred Stock is not convertible into any class of stock of the Company and has no preferences to dividends or liquidation rights. As of September 30, 2017 and December 31, 2016, there were 1,000,000 shares of Series E Preferred Stock issued and outstanding.
From January 1, 2016 through December 31, 2016, the Company issued 1,498,333 shares of its common stock to various investors for cash and other considerations.
From January 1, 2017 through September 30, 2017, the Company issued 7,615,169 shares of its common stock and cancelled 4,940,000 shares issued in the first quarter of 2017 as a result of a failure to close an acquisition, resulting in a net issuance of 2,675,169 for services and as repayment of debt.
The Company is authorized to issue up to 100,000,000 shares of its common stock, $0.001 par value per share. Holders of common stock hold one vote per share. As of September 30, 2017 and December 31, 2016, there were 29,952,533 and 27,297,364 shares of common stock issued and outstanding, respectively.
|
11 COMMITMENTS, CONTINGENCIES AND UNCERTAINTIES |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS, CONTINGENCIES AND UNCERTAINTIES |
10. STOCKHOLDERS' EQUITY
Share Exchange
On August 14, 2015, Snöbar Holdings entered into the Share Exchange Agreement with the Company and Snöbar Holdings' shareholders (the "Snöbar Shareholders") who held of record (i) at least 99% and up to 100% of the total issued and outstanding shares of Class A Common Stock and (ii) 100% of the total issued and outstanding shares of Class B Common Stock, of Snöbar Holding. In accordance with the terms and provisions of the Share Exchange Agreement, the Company acquired all of the issued and outstanding shares of Snöbar Holdings' Class A and Class B Common Stock from Snöbar Shareholders, with Snöbar Holdings becoming a wholly owned subsidiary of the Company, in exchange for the issuance to the Snöbar Shareholders of 22,500,000 shares of restricted common stock of the Company and the issuance of 2,500,000 restricted shares of the Company's common stock to certain other persons (as set forth below).
The 2,500,000 restricted shares of the Company's common stock were issued for the following: 600,000 shares were issued for services for a total of $326,900 of non-cash expenses; a former officer of the Company received 1,000,000 shares in exchange for his 1,000,000 shares of Series E Preferred Stock; and 900,000 shares were issued to extinguish $21,675 of debt due to a former officer and shareholder of the Company.
Common Stock and Preferred Stock
The Company is authorized to issue up to 10,000,000 shares of its preferred stock, $0.001 par value per share. Effective as of October 2016, the Company designated 1,000,000 shares of preferred stock as Series E Preferred Stock (the "Series E Preferred Stock"). Under the rights, preferences and privileges of the Series E Preferred Stock, for every share of Series E Preferred Stock held, the holder thereof has the voting rights equal to 10 shares of common stock. The Series E Preferred Stock is not convertible into any class of stock of the Company and has no preferences to dividends or liquidation rights. As of September 30, 2017 and December 31, 2016, there were 1,000,000 shares of Series E Preferred Stock issued and outstanding.
From January 1, 2016 through December 31, 2016, the Company issued 1,498,333 shares of its common stock to various investors for cash and other considerations.
From January 1, 2017 through September 30, 2017, the Company issued 7,615,169 shares of its common stock and cancelled 4,940,000 shares issued in the first quarter of 2017 as a result of a failure to close an acquisition, resulting in a net issuance of 2,675,169 for services and as repayment of debt.
The Company is authorized to issue up to 100,000,000 shares of its common stock, $0.001 par value per share. Holders of common stock hold one vote per share. As of September 30, 2017 and December 31, 2016, there were 29,953,533 and 27,297,364 shares of common stock issued and outstanding, respectively.
|
12 SUBSEQUENT EVENTS |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS |
12. SUBSEQUENT EVENTS
ASC 855-16-50-4 establishes accounting and disclosure requirements for subsequent events. ASC 855 details the period after the balance sheet date during which we should evaluate events or transactions that occur for potential recognition or disclosure in the financial statements, the circumstances under which we should recognize events or transactions occurring after the balance sheet date in its financial statements and the required disclosures for such events.
The Company has evaluated all subsequent events through the date these consolidated financial statements were issued, and determined the following are material to disclose.
On November 3, 2017, the Company's Board of Directors approved the Company's 2017 Equity Incentive Plan (the "2017 Plan"), which reserves a total of 1,500,000 shares of the Company's common stock for issuance under the 2017 Plan. Incentive awards authorized under the 2017 Plan include, but are not limited to, incentive stock options within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended, subject to the approval of the 2017 Plan by the Company's stockholders. If an incentive award granted under the 2017 Plan expires, terminates, is unexercised or is forfeited, or if any shares are surrendered to us in connection with the exercise of an incentive award, the shares subject to such award and the surrendered shares will become available for further awards under the 2017 Plan. As of the date of this Quarterly Report, no awards or any shares of the Company's common stock have been issued under the 2017 Plan.
|
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation
The consolidated financial statements include the Company, Snöbar Holdings, MGD, IPIC, and the Trust, which was established to hold IPIC, which in turn holds liquor licenses. All inter-company accounts have been eliminated during consolidation. See the discussion in Note 1 above for variable interest entity treatment of the Trust and IPIC. |
Use of Estimates | Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition
Sales revenues are generally recognized in accordance with the SAB 104 Public Company Guidance, when an agreement exists and price is determinable, the products are shipped to the customers or services are rendered, net of discounts, returns and allowance and collectability is reasonably assured. We are often entitled to bill our customers and receive payment from our customers in advance of recognizing the revenue. In the instances in which we have received payment from our customers in advance of recognizing revenue, we include the amounts in deferred or unearned revenue on our consolidated balance sheet. |
Unearned Revenue | Unearned Revenue
Certain amounts are received pursuant to agreements or contracts and may only be used in the conduct of specified transactions or the related services are yet to be performed. These amounts are recorded as unearned or deferred revenue and are recognized as revenue in the year/period the related expenses are incurred or services are performed. As at September 30, 2017, the Company has $0 in deferred revenue as a result of prepayment by two of its customers. This is comparable to the Company year-end deferred revenue balance of $15,042 as of December 31, 2016, which was as a result of prepayment by two of its customers. |
Shipping and Handling Costs | Shipping and Handling Costs
The Company's shipping costs are all recorded as operating expenses for all periods presented. |
Disputed Liabilities | Disputed Liabilities
The Company is involved in a variety of disputes, claims, and proceedings concerning its business operations and certain liabilities. We determine whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. We assess our potential liability by analyzing our litigation and regulatory matters using available information. We develop our views on estimated losses in consultation with outside counsel handling our defense in these matters, which involves an analysis of potential results, assuming a combination of litigation and settlement strategies. Should developments in any of these matters cause a change in our determination as to an unfavorable outcome and result in the need to recognize a material accrual, or should any of these matters result in a final adverse judgment or be settled for significant amounts, they could have a material adverse effect on our results of operations, cash flows and financial position in the period or periods in which such change in determination, judgment or settlement occurs. As of September 30, 2017, the Company has $31,858 in disputed liabilities on its balance sheet.
In addition, on January 28, 2016, a labor dispute between IPIC and a former employee was ruled in favor of the former employee by the Labor Commissioner of the State of California. This finding resulted in compensation expenses of $29,103 and an accrued liability of the same amount on IPIC book for the nine months ended September 30, 2017. |
Cash Equivalents | Cash Equivalents
The Company considers highly liquid instruments with original maturity of three months or less to be cash equivalents. As of September 30, 2017, the Company has a cash balance of $23,549 in cash and cash equivalents, compared to $25,284 at December 31, 2016. |
Accounts Receivable | Accounts Receivable
Accounts receivable are stated at net realizable value. This value includes an appropriate allowance for estimated uncollectible accounts. The allowance is calculated based upon the level of past due accounts and the relationship with and financial status of our customers. The Company did not write off any bad debts during the nine months ended September 30, 2017 and 2016, and thus has not set an allowance for doubtful accounts. |
Inventories | Inventories
Inventories are stated at the lower of cost or market value. Cost has been determined using the first-in, first-out method. Inventory quantities on-hand are regularly reviewed, and where necessary, reserves for excess and unusable inventories are recorded. Inventory consists of finished goods and includes ice cream, popsicles and the related packaging materials. As of December 31, 2016 and September 30, 2017, the Company has $0 in inventories. |
Income Taxes | Income Taxes
Deferred taxes are provided on an asset and liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the difference between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. |
Net Income/ (Loss) Per Common Share | Net Income/(Loss) Per Common Share
Income/(loss) per share of common stock is calculated by dividing the net income/(loss) by the weighted average number of shares of common stock outstanding during the period. The Company has no potentially dilutive securities. Accordingly, basic and dilutive income/(loss) per common share are the same. |
Property and Equipment | Property and Equipment
Property and equipment are carried at cost less accumulated depreciation and includes expenditures that substantially increase the useful lives of existing property and equipment. Maintenance, repairs, and minor renovations are expensed as incurred. Upon sale or retirement of property and equipment, the cost and related accumulated depreciation are eliminated from the respective accounts and the resulting gain or loss is included in the results of operations. The Company provides for depreciation of property and equipment using the straight-line method over the estimated useful lives or the term of the lease, as appropriate. The estimated useful lives are as follows: vehicles, five years; office furniture and equipment, three to fifteen years; equipment, three years. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments
The carrying amounts of the Company's financial instruments, which include cash, accounts receivable, accounts payable, and accrued expenses are representative of their fair values due to the short-term maturity of these instruments. |
Concentration of Credit Risk | Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and accounts receivable. The Company maintains cash balances at financial institutions within the United States which are insured by the Federal Deposit Insurance Corporation ("FDIC") up to limits of approximately $250,000. The Company has not experienced any losses with regard to its bank accounts and believes it is not exposed to any risk of loss on its cash bank accounts. |
Critical Accounting Policies | Critical Accounting Policies
The Company considers revenue recognition and the valuation of accounts receivable, allowance for doubtful accounts, and inventory and reserves as its significant accounting policies. Some of these policies require management to make estimates and assumptions that may affect the reported amounts in the Company's financial statements. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements
In June 2009, the FASB established the Accounting Standards Codification ("Codification" or "ASC") as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance with generally accepted accounting principles in the United States ("GAAP"). Rules and interpretive releases of the Securities and Exchange Commission (the "SEC") issued under authority of federal securities laws are also sources of GAAP for SEC registrants. Existing GAAP was not intended to be changed as a result of the Codification, and accordingly the change did not impact our financial statements. The ASC does change the way the guidance is organized and presented.
In April 2015, FASB issued Accounting Standards Update ("ASU") No. 2015-03, "Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs", to simplify presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The ASU does not affect the recognition and measurement guidance for debt issuance costs. For public companies, the ASU is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early application is permitted.
In April 2015, FASB issued ASU No. 2015-04, "Compensation – Retirement Benefits (Topic 715): Practical Expedient for the Measurement Date of an Employer's Defined Benefit Obligation and Plan Assets", which permits the entity to measure defined benefit plan assets and obligations using the month-end that is closest to the entity's fiscal year-end and apply that practical expedient consistently from year to year. The ASU is effective for public business entities for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early application is permitted.
In April 2015, FASB issued ASU No. 2015-05, "Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement", which provides guidance to customers about whether a cloud computing arrangement includes a software license. If such includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If the arrangement does not include a software license, the customer should account for it as a service contract. For public business entities, the ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early application is permitted. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.
In April 2015, FASB issued ASU No. 2015-06, "Earnings Per Share (Topic 260): Effects on Historical Earnings per Unit of Master Limited Partnership Dropdown Transactions", which specifies that, for purposes of calculating historical earnings per unit under the two-class method, the earnings (losses) of a transferred business before the date of a drop down transaction should be allocated entirely to the general partner. In that circumstance, the previously reported earnings per unit of the limited partners (which is typically the earnings per unit measure presented in the financial statements) would not change as a result of the dropdown transaction. Qualitative disclosures about how the rights to the earnings (losses) differ before and after the dropdown transaction occurs for purposes of computing earnings per unit under the two-class method also are required. The ASU is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Earlier application is permitted.
In June 2014, FASB issued ASU No. 2014-10, "Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation". The update removes all incremental financial reporting requirements from GAAP for development stage entities, including the removal of Topic 915 from the FASB Accounting Standards Codification. In addition, the update adds an example disclosure in Risks and Uncertainties (Topic 275) to illustrate one way that an entity that has not begun planned principal operations could provide information about the risks and uncertainties related to the company's current activities. Furthermore, the update removes an exception provided to development stage entities in Consolidations (Topic 810) for determining whether an entity is a variable interest entity-which may change the consolidation analysis, consolidation decision, and disclosure requirements for a company that has an interest in a company in the development stage. The update is effective for the annual reporting periods beginning after December 15, 2014, including interim periods therein. Early application is permitted with the first annual reporting period or interim period for which the entity's financial statements have not yet been issued (Public business entities) or made available for issuance (other entities). Our company adopted this pronouncement.
In June 2014, FASB issued ASU No. 2014-12, "Compensation – Stock Compensation (Topic 718); Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period". The amendments in this ASU apply to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. For all entities, the amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. Entities may apply the amendments in this ASU either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. If retrospective transition is adopted, the cumulative effect of applying this Update as of the beginning of the earliest annual period presented in the financial statements should be recognized as an adjustment to the opening retained earnings balance at that date. Additionally, if retrospective transition is adopted, an entity may use hindsight in measuring and recognizing the compensation cost. This updated guidance is not expected to have a material impact on our results of operations, cash flows or financial condition.
In August 2014, the FASB issued ASU 2014-15 on "Presentation of Financial Statements Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern". Currently, there is no guidance in GAAP about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern or to provide related footnote disclosures. The amendments in this Update provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity's ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management's plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management's plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued).
All other newly issued accounting pronouncements which are not yet effective have been deemed either immaterial or not applicable.
We reviewed all other recently issued accounting pronouncements and determined these have no current applicability to the Company or their effect on the financial statements would not have been significant. |
5 PROPERTY, PLANT AND EQUIPMENT (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, plant and equipment | Property, plant and equipment at September 30, 2017 and December 31, 2016, consisted of:
|
8 RELATED PARTY TRANSACTIONS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of promissory notes issued to related parties |
|
9 NOTES PAYABLE (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of promissory notes issued to unrelated third parties |
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2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Dec. 31, 2016 |
|
Accounting Policies [Abstract] | ||
Deferred revenue | $ 0 | $ 15,042 |
Disputed Liabilities | 31,858 | |
Compensation expenses | 29,103 | |
Cash and cash equivalents | 23,549 | 25,284 |
Allowance for doubtful accounts | 0 | 0 |
Inventories | 0 | $ 0 |
FDIC | $ 250,000 |
3 GOING CONCERN (Details Narrative) - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Net loss for the period | $ (108,390) | $ (75,060) | $ (353,758) | $ (384,933) | |
Accumulated deficit | $ (5,680,860) | $ (5,680,860) | $ (5,327,102) |
4 INVENTORIES (Details Narrative) - USD ($) |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Inventories | $ 0 | $ 0 |
5 PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Accumulated Depreciation | $ (58,227) | $ (55,231) |
Net Book Value | 28,841 | 31,838 |
Computer [Member] | ||
Property, plant and equipment, Gross | 15,986 | 15,986 |
Freezers [Member] | ||
Property, plant and equipment, Gross | 39,153 | 39,153 |
Office Furniture [Member] | ||
Property, plant and equipment, Gross | 15,687 | 15,687 |
Rugs [Member] | ||
Property, plant and equipment, Gross | 6,000 | 6,000 |
Software Accounting [Member] | ||
Property, plant and equipment, Gross | 2,901 | 2,901 |
Telephone System [Member] | ||
Property, plant and equipment, Gross | 5,814 | 5,814 |
Video Camera [Member] | ||
Property, plant and equipment, Gross | $ 1,528 | $ 1,528 |
5 PROPERTY, PLANT AND EQUIPMENT (Details Narrative) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 1,000 | $ 998 | $ 2,997 | $ 2,995 |
6 ACCRUED EXPENSE (Details Narrative) - USD ($) |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accrued expenses | $ 280,463 | $ 231,060 |
8 RELATED PARTY TRANSACTIONS (Details) |
9 Months Ended |
---|---|
Sep. 30, 2017
USD ($)
| |
Note Amount | $ 696,000 |
Unpaid Amount | $ 314,464 |
S. Masjedi | |
Noteholder | S. Masjedi |
Note Amount | $ 150,000 |
Issuance Date | Dec. 10, 2010 |
Unpaid Amount | $ 130,692 |
A. Masjedi | |
Noteholder | A. Masjedi |
Note Amount | $ 500,000 |
Issuance Date | Jun. 01, 2013 |
Unpaid Amount | $ 157,772 |
M. Shenkman | |
Noteholder | M. Shenkman |
Note Amount | $ 10,000 |
Issuance Date | Feb. 21, 2012 |
Unpaid Amount | $ 10,000 |
M. Shenkman | |
Noteholder | M. Shenkman |
Note Amount | $ 10,000 |
Issuance Date | Feb. 23, 2102 |
Unpaid Amount | $ 10,000 |
M. Shenkman | |
Noteholder | M. Shenkman |
Note Amount | $ 10,000 |
Issuance Date | Mar. 14, 2013 |
Unpaid Amount | $ 6,000 |
M. Shenkman | |
Noteholder | M. Shenkman |
Note Amount | $ 16,000 |
Issuance Date | Sep. 09, 2014 |
Unpaid Amount | $ 16,000 |
8 RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Dec. 31, 2016 |
|
Principle | $ 313,500 | $ 1,000 |
Short term Notes Payable - Related Party | 109,281 | 0 |
Long term Notes Payable - Related Party | $ 247,183 | 684,048 |
Promissory Note Jan 2011 [Member] | ||
Principle | $ 150,000 | |
Interest rate | 3.00% | |
Balance of note | $ 130,692 | |
Maturity date | Dec. 31, 2020 | |
Promissory Note Feb 21 2012 [Member] | ||
Principle | $ 10,000 | |
Interest rate | 5.00% | |
Balance of note | $ 10,000 | |
Maturity date | Dec. 31, 2020 | |
Promissory Note Feb 23 2012 [Member] | ||
Principle | $ 10,000 | |
Interest rate | 8.00% | |
Balance of note | $ 10,000 | |
Maturity date | Dec. 31, 2020 | |
Promissory Note March 14 2013 [Member] | ||
Principle | $ 10,000 | |
Interest rate | 5.00% | |
Balance of note | $ 6,000 | |
Maturity date | Mar. 14, 2014 | |
Terms | subsequently extended to December 31, 2020 with a lower interest rate of 2%/year | |
Promissory Note June 1 2013 [Member] | ||
Principle | $ 500,000 | |
Balance of note | $ 157,772 |
9 NOTES PAYABLE (Details Narrative) - USD ($) |
1 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Mar. 10, 2017 |
Feb. 13, 2017 |
Sep. 30, 2017 |
Mar. 31, 2020 |
Mar. 31, 2019 |
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Principle | $ 914,321 | ||||||
Future cash payment | $ 125,000 | $ 25,000 | $ 25,000 | $ 25,000 | |||
Note payble description | During August and September, 2017, the Company entered into financing arrangements with two lending institutions for $158,000 secured by Company stock. |
||||||
Creditor [Member] | |||||||
Long-term notes payable | $ 527,333 | ||||||
Restricted common stock issued | 400,000 | 400,000 | |||||
Future cash payment | $ 200,000 | $ 200,000 | $ 175,000 | $ 25,000 | |||
Notes Payable February, 2012 [Member] | |||||||
Principle | $ 30,000 | ||||||
Interest rate | 8.00% | ||||||
Balance of note | $ 25,000 | ||||||
Maturity date | Aug. 01, 2014 | ||||||
Terms | The note's maturity date has been extended to December 31, 2020 and the interest rate extinguished as part of the extension. | ||||||
Notes Payable March 14, 2013 [Member] | |||||||
Principle | $ 86,821 | ||||||
Interest rate | 5.00% | ||||||
Balance of note | $ 86,821 | ||||||
Maturity date | Mar. 14, 2014 | ||||||
Terms | The note's maturity date has subsequently been extended to February 1, 2020. Interest against the note was extinguished in a subsequent extension of the term. | ||||||
Notes Payable July 22, 2013 [Member] | |||||||
Principle | $ 15,000 | ||||||
Interest rate | 5.00% | ||||||
Balance of note | $ 15,000 | ||||||
Maturity date | Dec. 31, 2018 | ||||||
Notes Payable Feb 2014 [Member] | |||||||
Principle | $ 10,000 | ||||||
Balance of note | $ 1,000 | ||||||
Terms | The Company is to make payments of $181 each business day (Monday through Friday) until the loan is paid off. The effective interest rate on the note is 137%. | ||||||
Notes Payable May 19, 2014 [Member] | |||||||
Principle | $ 500,000 | ||||||
Interest rate | 10.00% | ||||||
Maturity date | Dec. 31, 2015 | ||||||
Terms | The Company was to make interest only payments beginning July 1, 2014. The lender determined Snöbar Holdings to be in default and on January 29, 2015, entered into a mutually agreed loan modification. The agreement increased the principal balance of the note as of December 31, 2014 to $527,333 and all interest due and payable was deemed to have been paid and the conversion rights of the note were removed. | ||||||
Notes Payable Sept 30 2017 [Member] | |||||||
Principle | $ 272,500 | ||||||
Interest rate | 8.00% | ||||||
Maturity date | Aug. 13, 2017 | ||||||
Terms | Extended to November 15, 2017 | ||||||
Late payment fee | $ 15,000 | ||||||
Notes Payable Sept 30 2017 [Member] | |||||||
Principle | $ 50,000 | ||||||
Interest rate | 8.00% | ||||||
Maturity date | Aug. 13, 2017 | ||||||
Terms | Extended to November 15, 2017 | ||||||
Late payment fee | $ 15,000 | ||||||
Notes Payable Sept 30 2017 [Member] | |||||||
Principle | $ 50,000 | ||||||
Interest rate | 8.00% | ||||||
Maturity date | Aug. 13, 2017 | ||||||
Terms | Extended to November 15, 2017 | ||||||
Late payment fee | $ 15,000 |
11 COMMITMENTS, CONTINGENCIES AND UNCERTAINTIES (Details Narrative) |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating Lease | The Company is currently obligated under two operating leases for office spaces and associated building expenses. Both leases are on a month to month basis. |
12 SUBSEQUENT EVENTS (Details Narrative) |
Nov. 03, 2017
shares
|
---|---|
Subsequent Event [Member] | 2017 Equity Incentive Plan [Member] | |
Common stock for issuance under plan | 1,500,000 |
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