Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 18, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | Sector 5, Inc. | |
Entity Central Index Key | 1,550,737 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 20,000,000 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,016 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 7,062 | $ 62 |
Inventory | 184,426 | |
Prepaid expenses | 7,396 | |
Total Current Assets | 198,884 | 62 |
Equipment, net of accumulated depreciation ($731) | 4,279 | |
TOTAL ASSETS | 203,163 | 62 |
CURRENT LIABILITIES: | ||
Accounts payable | 14,100 | 23,063 |
Other payable, related party | 383,298 | 18,637 |
Total Current Liabilities | 397,398 | 41,700 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding | ||
Common stock, $0.001 par value; 70,000,000 shares authorized; 20,000,000 shares issued and outstanding | 20,000 | 20,000 |
Additional Paid in Capital | 61,650 | 61,650 |
Accumulated deficit | (275,885) | (123,288) |
Total Stockholders' Equity | (194,235) | (41,638) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 203,163 | $ 62 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
CURRENT ASSETS: | ||
Net of accumulated depreciation | $ 731 | $ 731 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock shares, authorized | 70,000,000 | 70,000,000 |
Common stock shares, issued | 20,000,000 | 20,000,000 |
Common stock shares, outstanding | 20,000,000 | 20,000,000 |
STATEMENTS OF OPERATIONS (unaud
STATEMENTS OF OPERATIONS (unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
REVENUE: | ||||
Sales | $ 64,670 | $ 87,829 | ||
Total revenue | 64,670 | 87,829 | ||
COST OF GOODS SOLD | 52,166 | 66,672 | ||
GROSS MARGIN | 12,504 | 21,157 | ||
OPERATING EXPENSES | ||||
Research and development expense | 15,000 | 48,010 | ||
Selling, general and administrative expenses | 12,950 | 1,853 | 34,861 | 10,456 |
Professional fees | 42,529 | 90,883 | ||
TOTAL OPERATING EXPENSES | 70,479 | 1,853 | 173,754 | 10,456 |
LOSS FROM OPERATIONS | (57,975) | (1,853) | (152,597) | (10,456) |
OTHER EXPENSE (INCOME) | ||||
Interest expense | ||||
Interest income | ||||
TOTAL OTHER EXPENSE (INCOME) | ||||
NET LOSS | $ (57,975) | $ (1,853) | $ (152,597) | $ (10,456) |
NET LOSS PER COMMON SHARE, BASIC AND DILUTED | $ 0 | $ 0 | $ (0.01) | $ 0 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 |
STATEMENTS OF CASH FLOWS (unaud
STATEMENTS OF CASH FLOWS (unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (152,597) | $ (10,456) |
Adjustments to reconcile net loss to net cash and cash equivalents provided by operating activities: | ||
Depreciation expense | 731 | |
Increase in current assets: | ||
Inventory | (184,426) | |
Prepaid expenses | (7,396) | |
Increase in accounts payable | (8,963) | 9,564 |
Net cash used by operating activities | (352,651) | (892) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of equipment | (5,010) | |
Net cash used by investing activities | (5,010) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Increase in other payable, related party | 364,661 | |
Capital contribution from stockholder | 875 | |
Net cash provided by financing activities | 364,661 | 875 |
Net decrease in cash and cash equivalents | 7,000 | (17) |
Cash and cash equivalents, beginning of period | 62 | 17 |
Cash and cash equivalents, end of period | 7,062 | |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash paid for interest | ||
Cash paid for taxes |
1. Nature of Operations and Sig
1. Nature of Operations and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
1. Nature of Operations and Significant Accounting Policies | Nature of Operations SECTOR 5, INC. ("Sector 5" or the "Company") was incorporated in the State of Nevada on April 11, 2012. On March 18, 2016, a change in control of the Company occurred. The change in control includes plans to relaunch the Company to sell branded electronic products targeting the educational and consumer electronics markets. Sector 5 plans to take advantage of the educational market using a supply-chain methodology involving Open Innovation. Sector 5 has relationships with Chinese suppliers and American ingenuity that allow us to create products with the latest technology, matching market expectations at the best pricing. Furthermore, we intend to use mobile carriers as sales channels on some unique new 4G LTE products which employ mobile data networks. Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. The accompanying financial statements and notes should be read in conjunction with the audited financial statements and notes of the Company for the fiscal year ended December 31, 2015. The results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of those to be expected for the entire year. and should be read in conjunction with Form 10-K. In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made to make the financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year. Use of Estimates The Financial Statements have been prepared in conformity with U.S. GAAP, which requires using management's best estimates and judgments where appropriate. These estimates and judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ materially from these good faith estimates and judgments. Financial Instruments The Company's balance sheet includes cash, inventory, accounts payable and related party payables. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization. Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820 "Fair Value Measurements and Disclosures" (ASC 820) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity's own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 - Inputs that are both significant to the fair value measurement and unobservable. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2016. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. The Company applied ASC 820 for all non-financial assets and liabilities measured at fair value on a non-recurring basis. The adoption of ASC 820 for non-financial assets and liabilities did not have a significant impact on the Company's financial statements. Cash and Cash Equivalents Cash and cash equivalents includes all cash deposits and highly liquid financial instruments with a maturity of three months or less. Cash Flow Reporting The Company follows ASC 230, Statement of Cash Flows, for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method ("Indirect method") as defined by ASC 230, Statement of Cash Flows, to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. Accounts Receivable The Company currently has generated revenues from receivables from the sale of electronic devices. The Company regularly reviews accounts receivable for any bad debt based on an analysis of the customer's credit worthiness and current economic trends. After all attempts to collect the receivable have failed, the receivable is written off against the allowance for doubtful accounts. No allowance for doubtful accounts is considered necessary at September 30, 2016. Inventory Inventory consists of finished goods and is stated at the lower of cost, determined by first-in, first-out method, or market. Market is determined based on the net realizable value, with appropriate consideration given to obsolescence, excessive levels, deterioration and other factors. Share-based payments Share-based payments to employees, including grants of employee stock options are recognized as compensation expense in the financial statements based on their fair values, in accordance with FASB ASC Topic 718. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). The Company had no common stock options or common stock equivalents granted or outstanding for all periods presented. The company may issue shares as compensation in the future periods for employee services. The Company may issue restricted stock to consultants for various services. Cost for these transactions will be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock is to be measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty's performance is complete. The company has not issued shares during the periods presented, however it anticipates that shares may be issued in the future. Revenue recognition The Company recognizes revenue on arrangements in accordance with FASB ASC No. 605, Revenue Recognition. In all cases, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability is reasonably assured. The Company has generated minimal revenue, has not issued guarantees or other warranties. The Company has not experienced any refund requests or committed to any adjustments for failed sales. The Company does not believe that there is any liability. Advertising The costs of advertising are expensed as incurred. Advertising expense was$1,500 and $8,750 for the three and nine months ended September 30, 2016, respectively. Research and Development The Company expenses research and development costs when incurred. Research and development costs include software engineering and testing of product and outputs. Indirect costs related to research and developments are allocated based on percentage usage to the research and development. During the three and nine months ended September 30, 2016, the Company incurred $15,000 and $48,010 of research and development expenses, respectively. Income taxes The Company accounts for income taxes under the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") No. 740, Income Taxes ("ASC 740"). Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Earnings (loss) per share Basic earnings (loss) per share calculations are determined by dividing net income (loss) by the weighted average number of shares outstanding during the year. Diluted earnings (loss) per share calculations are determined by dividing net income (loss) by the weighted average number of shares. The Company does not have any potentially dilutive instruments and, thus, anti-dilution issues are not applicable. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued that we adopt as of the specified effective date. We believe that the impact of recently issued standards that are not yet effective may have an impact on our results of operations and financial position. ASU Update 2014-09 Revenue from Contracts with Customers ASU Update 2014-15 Presentation of Financial Statements-Going Concern In February 2016, the FASB issued ASU No. 2016-02, Leases, The amendments in ASU 2016-02 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. The Company is evaluating the potential impact of ASU 2016-02 on its Financial Statements. |
2. Going Concern
2. Going Concern | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
2. Going Concern | The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not established an ongoing source of revenues sufficient to cover its operating cost, and requires additional capital to commence its operating plan. The Company has incurred a net loss for the three and nine months ended September 30, 2016 in the amount of $57,975 and $152,597, respectively. The Company has a history of losses, resulting in an accumulated deficit of $275,885. Furthermore, the Company has negative working capital of $141,269. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. These factors raise substantial doubt about its ability to continue as a going concern. To continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan to obtain such resources for the Company include: sales of equity instruments; traditional financing, such as loans; and obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans. There is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to the Company. In addition, profitability will ultimately depend upon the level of revenues received from business operations. However, there is no assurance that the Company will attain profitability. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
3. Income Taxes
3. Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
3. Income Taxes | The Company utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities are determined based on the differences between financial reporting basis and the tax basis of the assets and liabilities and are measured using enacted tax rates and laws that will be in effect, when the differences are expected to reverse. An allowance against deferred tax assets is recognized, when it is more likely than not, that such tax benefits will not be realized. The Company has generated operating losses from operations to date; based on uncertainties concerning its ability to generate taxable income in future periods any tax benefit for the periods presented is offset by a valuation allowance established against deferred tax assets arising from operating losses and other temporary differences, the realization of which could not be considered more likely than not. In future periods, tax benefits and related deferred tax assets will be recognized when management considers realization of such amounts to be more likely than not. The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the year ended December 31, 2015. Due to the change in ownership provisions of the Income Tax laws of United States of America, net operating loss carry forwards for federal income tax reporting purposes are subject to annual limitations. When a change in ownership occurs, net operating loss carry forwards may be limited as to use in future years. |
4. Related Party Transactions
4. Related Party Transactions | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
4. Related Party Transactions | Loans from Shareholder During the nine months ended September 30, 2016, a related party assisted the Company in support of its operations by providing payments to the Company's vendors and advances for operations of $383,298 and an additional $18,637 during the year ended December 31, 2015. The Company has recorded the liability to this related party in other payables, as the amounts are temporary in nature and have not been formalized by a promissory note. These amounts are considered due on demand and non-interest bearing. In support of the Company's efforts and cash requirements, the Company is relying on advances from related parties until the Company can support its operations or attains adequate financing through sales of equity or traditional debt financing. Amounts represent advances or amounts paid in satisfaction of certain liabilities as they come due. The majority shareholder has pledged their support to fund continuing operations; however, there is no written commitment to this effect. The Company utilizes space provided by the majority shareholder without charge for certain operations. The Company does not have an employment contract with its key employee who is the Company's Chief Executive Officer, Chief Accounting Officer, Treasurer and Secretary. The amounts and terms of the above transactions may not necessarily be indicative of the amounts and terms that would have been incurred had comparable transactions been entered with independent third parties. |
5. Equity
5. Equity | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
5. Equity | The total number of shares of capital stock which the Company shall have authority to issue is seventy-five million (75,000,000) shares with a par value of $0.001. There are 70,000,000 Common Shares authorized of which 15,000,000 is issued Kirkland Holding Co., a Delaware corporation controlled by Roger B. McKeague, and 5,000,000 have been issued under a Form S1 registration statement at $0.01 per share. The Company intends to issue additional shares to raise capital to fund its operations. Common shareholders will have one vote for each share held. No holder of shares of stock of any class is entitled as a matter of right to subscribe for or purchase or receive any part of any new or additional issue of shares of stock of any class, or of securities convertible into shares of stock of any class, whether now hereafter authorized or whether issued for money, for consideration other than money, or by way of dividend. On March 18, 2016, Rafael Solorio, the Chief Executive Officer and a significant shareholder of the Company, privately sold 15,000,000 shares of common stock of the Company, to Kirkland Holding Co., a Delaware corporation ("Kirkland") controlled by Roger B. McKeague, pursuant to a stock purchase agreement. As a result of the privately-negotiated sale, a change in control of the Company occurred and Kirkland now owns approximately 75% of the total outstanding shares of our Common Stock. Kirkland purchased the shares for a total of $400,000 in cash. The terms of the purchase and sale transaction were as a result of arm's-length negotiations between Mr. Solorio and Kirkland. Neither party had any relationship with the other prior to the transaction. In connection with the change in control, Mr. Solorio, the Company's then sole officer, resigned from his positions, as to which there were no prior disagreements or disputes with the Company. Mr. Solorio appointed Roger B. McKeague to the Company's Board of Directors and to be the Company's Chief Executive Officer, Chief Accounting Officer, Treasurer and Secretary, and subsequently resigned as the Company's former sole director. |
6. Contingencies
6. Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
6. Contingencies | Some of the officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities that become available. They may face a conflict in selecting between the Company and other business interests. The Company has not formulated a policy for the resolution of such conflicts. From time to time the Company may become a party to litigation matters involving claims against the Company. Management believes that there are no current matters that would have a material effect on the Company's financial position or results of operations. |
7. Subsequent Events
7. Subsequent Events | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
7. Subsequent Events | During October 2016, the Company entered an Exchange Agreement with Kirkland Holding Company, (Kirkland) a shareholder. Under this agreement, the Company will reacquire 14,000,000 shares of Common Stock in exchange for the issuance of 1,000,000 shares of Preferred Stock. |
1. Nature of Operations and S13
1. Nature of Operations and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Nature Of Operations And Significant Accounting Policies Policies | |
Nature of Operations | SECTOR 5, INC. ("Sector 5" or the "Company") was incorporated in the State of Nevada on April 11, 2012. On March 18, 2016, a change in control of the Company occurred. The change in control includes plans to relaunch the Company to sell branded electronic products targeting the educational and consumer electronics markets. Sector 5 plans to take advantage of the educational market using a supply-chain methodology involving Open Innovation. Sector 5 has relationships with Chinese suppliers and American ingenuity that allow us to create products with the latest technology, matching market expectations at the best pricing. Furthermore, we intend to use mobile carriers as sales channels on some unique new 4G LTE products which employ mobile data networks. |
Basis of Presentation | The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. The accompanying financial statements and notes should be read in conjunction with the audited financial statements and notes of the Company for the fiscal year ended December 31, 2015. The results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of those to be expected for the entire year. and should be read in conjunction with Form 10-K. In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made to make the financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year. |
Use of Estimates | The Financial Statements have been prepared in conformity with U.S. GAAP, which requires using management's best estimates and judgments where appropriate. These estimates and judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ materially from these good faith estimates and judgments. |
Financial Instruments | The Company's balance sheet includes cash, inventory, accounts payable and related party payables. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization. Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820 "Fair Value Measurements and Disclosures" (ASC 820) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity's own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 - Inputs that are both significant to the fair value measurement and unobservable. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2016. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. The Company applied ASC 820 for all non-financial assets and liabilities measured at fair value on a non-recurring basis. The adoption of ASC 820 for non-financial assets and liabilities did not have a significant impact on the Company's financial statements. |
Cash and Cash Equivalents | Cash and cash equivalents includes all cash deposits and highly liquid financial instruments with a maturity of three months or less. |
Cash Flow Reporting | The Company follows ASC 230, Statement of Cash Flows, for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method ("Indirect method") as defined by ASC 230, Statement of Cash Flows, to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. |
Accounts Receivable | The Company currently has generated revenues from receivables from the sale of electronic devices. The Company regularly reviews accounts receivable for any bad debt based on an analysis of the customer's credit worthiness and current economic trends. After all attempts to collect the receivable have failed, the receivable is written off against the allowance for doubtful accounts. No allowance for doubtful accounts is considered necessary at September 30, 2016. |
Inventory | Inventory consists of finished goods and is stated at the lower of cost, determined by first-in, first-out method, or market. Market is determined based on the net realizable value, with appropriate consideration given to obsolescence, excessive levels, deterioration and other factors. |
Share-based payments | Share-based payments to employees, including grants of employee stock options are recognized as compensation expense in the financial statements based on their fair values, in accordance with FASB ASC Topic 718. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). The Company had no common stock options or common stock equivalents granted or outstanding for all periods presented. The company may issue shares as compensation in the future periods for employee services. The Company may issue restricted stock to consultants for various services. Cost for these transactions will be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock is to be measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty's performance is complete. The company has not issued shares during the periods presented, however it anticipates that shares may be issued in the future. |
Revenue recognition | The Company recognizes revenue on arrangements in accordance with FASB ASC No. 605, Revenue Recognition. In all cases, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability is reasonably assured. The Company has generated minimal revenue, has not issued guarantees or other warranties. The Company has not experienced any refund requests or committed to any adjustments for failed sales. The Company does not believe that there is any liability. |
Advertising | The costs of advertising are expensed as incurred. Advertising expense was$1,500 and $8,750 for the three and nine months ended September 30, 2016, respectively. |
Research and Development | The Company expenses research and development costs when incurred. Research and development costs include software engineering and testing of product and outputs. Indirect costs related to research and developments are allocated based on percentage usage to the research and development. During the three and nine months ended September 30, 2016, the Company incurred $15,000 and $48,010 of research and development expenses, respectively. |
Income taxes | The Company accounts for income taxes under the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") No. 740, Income Taxes ("ASC 740"). Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. |
Earnings (loss) per share | Basic earnings (loss) per share calculations are determined by dividing net income (loss) by the weighted average number of shares outstanding during the year. Diluted earnings (loss) per share calculations are determined by dividing net income (loss) by the weighted average number of shares. The Company does not have any potentially dilutive instruments and, thus, anti-dilution issues are not applicable. |
Recent Accounting Pronouncements | From time to time, new accounting pronouncements are issued that we adopt as of the specified effective date. We believe that the impact of recently issued standards that are not yet effective may have an impact on our results of operations and financial position. ASU Update 2014-09 Revenue from Contracts with Customers ASU Update 2014-15 Presentation of Financial Statements-Going Concern In February 2016, the FASB issued ASU No. 2016-02, Leases, The amendments in ASU 2016-02 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. The Company is evaluating the potential impact of ASU 2016-02 on its Financial Statements. |
1. Nature of Operations and S14
1. Nature of Operations and Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Nature Of Operations And Significant Accounting Policies Details Narrative | ||||
Advertising expense | $ 1,500 | $ 8,750 | ||
Research and development expenses. | $ 15,000 | $ 48,010 |
2. Going Concern (Details Narra
2. Going Concern (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Going Concern Details Narrative | |||||
Net loss | $ (57,975) | $ (1,853) | $ (152,597) | $ (10,456) | |
Accumulated deficit | (275,885) | (275,885) | $ (123,288) | ||
Working capital | $ (141,269) | $ (141,269) |
3. Income Taxes (Details Narrat
3. Income Taxes (Details Narrative) | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Income Taxes Details Narrative | |
Net operating loss carry forwards | $ 276,000 |
Net operating loss carry forwards expiration date | 2,032 |
4. Related Party Transactions (
4. Related Party Transactions (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Related Party Transactions Details Narrative | ||
Increase in other payable, related party | $ 383,298 | $ 18,637 |