Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 12, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | RC-1, Inc. | |
Entity Central Index Key | 0001665598 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 13,929,581 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 | |
Entity Small Business | true | |
Entity Emerging Growth | false | |
Entity Shell Company | false | |
Interactive data current | Yes | |
Entity file number | 333-210960 | |
State of incorporation | NV |
Balance Sheets (Unaudited)
Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash | $ 49,590 | $ 50,106 |
Note receivable - related party | 42,360 | 50,000 |
Lease receivable - related party | 153,826 | 0 |
Interest receivable - related party | 4,036 | 892 |
Total current assets | 249,812 | 100,998 |
Long-term assets | ||
Property and Equipment - net | 6,606 | 7,157 |
Lease receivable - related party - net of current portion | 133,397 | 0 |
Total long-term assets | 140,003 | 7,157 |
Total Assets | 389,815 | 108,155 |
Current liabilities | ||
Accounts payable | 47,867 | 29,668 |
Accrued liabilities - related party | 176,335 | 161,601 |
Note payable - related party | 141,790 | 0 |
Line of credit, current portion | 75,000 | 75,000 |
Line of credit to related parties | 5,897 | 18,964 |
Accrued interest payable | 46,793 | 44,918 |
Accrued interest - related parties | 124,279 | 119,471 |
Total current liabilities | 617,961 | 449,622 |
Note payable, net of current portion | 145,710 | 0 |
Total long-term liabilities | 145,710 | 0 |
Total Liabilities | 763,671 | 449,622 |
Stockholders' Deficit | ||
Preferred stock, $.001 par value; 10,000,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock, $.001 par value;190,000,000 shares authorized; 13,929,581 issued and outstanding | 13,930 | 13,930 |
Additional paid in capital | 2,895,024 | 2,865,024 |
Common stock issuable | 90,000 | 120,000 |
Accumulated deficit | (3,372,810) | (3,340,421) |
Total Stockholders' Deficit | (373,856) | (341,467) |
Total Liabilities and Stockholders' Deficit | $ 389,815 | $ 108,155 |
Condensed Balance Sheets (Unaud
Condensed Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value | $ 0.001 | $ .001 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, shares authorized | 190,000,000 | 190,000,000 |
Common stock, par value | $ 0.001 | $ .001 |
Common stock, shares issued | 13,929,581 | 13,929,581 |
Common stock, shares outstanding | 13,929,581 | 13,929,581 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Operating expenses: | |||
Consulting - related parties | $ 15,000 | $ 15,000 | |
General and administrative | 5,747 | 18,051 | |
Professional fees | 23,699 | 17,125 | |
Total operating expenses | 44,446 | 50,176 | |
Loss from operations | (30,558) | (25,508) | |
Other income (expense): | |||
Interest expense - unrelated parties | (1,875) | (1,875) | |
Interest expense - related parties | (4,808) | (347) | |
Interest income - related parties | 4,852 | 0 | |
Total other (expense) income | (1,831) | (2,222) | |
Loss before income taxes | (32,389) | (27,730) | |
Provision for income tax | 0 | 0 | |
Net loss | $ (32,389) | $ (27,730) | |
Net loss per share (basic and diluted) | [1] | $ 0 | $ 0 |
Weighted average number of common shares outstanding (basic and diluted) | 13,929,581 | 13,929,581 | |
Consulting Fees - Related Parties [Member] | |||
Revenues | $ 13,888 | $ 24,668 | |
[1] | denotes a loss of less than $(.01) per share. |
Condensed Statement of Stockhol
Condensed Statement of Stockholders' Deficit (Unaudited) - USD ($) | Common Stock | Additional Paid-In Capital | Common Stock Issuable | Accumulated Deficit | Total |
Beginning balance, shares at Dec. 31, 2018 | 13,929,581 | ||||
Beginning balance, value at Dec. 31, 2018 | $ 13,930 | $ 2,865,024 | $ 120,000 | $ (3,291,436) | $ (292,482) |
Net loss for the period | (27,730) | (27,730) | |||
Ending balance, shares at Mar. 31, 2019 | 13,929,581 | ||||
Ending balance, value at Mar. 31, 2019 | $ 13,930 | 2,865,024 | 120,000 | (3,319,166) | (320,212) |
Beginning balance, shares at Dec. 31, 2019 | 13,929,581 | ||||
Beginning balance, value at Dec. 31, 2019 | $ 13,930 | 2,865,024 | 120,000 | (3,340,421) | (341,467) |
Shares to be cancelled at end of direct financing lease | 30,000 | (30,000) | 0 | ||
Net loss for the period | (32,389) | (32,389) | |||
Ending balance, shares at Mar. 31, 2020 | 13,929,581 | ||||
Ending balance, value at Mar. 31, 2020 | $ 13,930 | $ 2,895,024 | $ 90,000 | $ (3,372,810) | $ (373,856) |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (32,389) | $ (27,730) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | ||
Depreciation | 551 | 3,051 |
Non-cash rent expense | 0 | 15,000 |
Changes in Operating Assets and Liabilities | ||
Decrease in lease receivable, related party | 12,777 | 0 |
Increase in interest receivable - related parties | (3,144) | 0 |
Increase (decrease) in accounts payable | 14,734 | (874) |
Increase in accounts payable - related parties | 18,199 | 26,950 |
Increase in accrued interest - unrelated parties | 1,875 | 1,875 |
Increase in accrued interest - related party | 4,808 | 346 |
Net cash provided by operating activities | 17,411 | 18,618 |
Cash Flows From Investing Activities: | ||
Purchase of asset for financing lease | (300,000) | 0 |
Collections on notes receivable | 7,640 | 0 |
Net cash used in investing activities | (292,360) | 0 |
Cash Flows From Financing Activities: | ||
Proceeds from line of credit to related parties | 279,061 | 56,000 |
Proceeds from note payable to related parties | 287,500 | 0 |
Payments on line of credit to related parties | (292,128) | (74,862) |
Net cash (used in) provided by financing activities | 274,433 | (18,862) |
Net Decrease In Cash | (516) | (244) |
Cash At The Beginning Of The Period | 50,106 | 50,596 |
Cash At The End Of The Period | 49,590 | 50,352 |
Schedule of Non-Cash Investing and Financing Activities | ||
Assets transferred in direct financing lease | 300,000 | 0 |
Supplemental Disclosure | ||
Cash paid for interest | 0 | 0 |
Cash paid for income taxes | $ 0 | $ 0 |
1. Organization and Description
1. Organization and Description of Business Operations | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business Operations | NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS OPERATIONS RC-1, Inc. (the “Company”), was incorporated in the State of Nevada on May 14, 2009. The Company is currently considered to be in the development stage, and has generated only limited revenues from its activities in the racing business. R-Course Promotions, LLC was formed in the State of California on October 30, 2007. On June 1, 2009, in a merger classified as a transaction between parties under common control, the sole membership interest owner in R-Course Promotions, LLC exchanged 125,000 membership interests for 1,786 common shares in RC-1, Inc. Subsequent to the consummation of the merger, R-Course Promotions, LLC ceased to exist. The results of operations of RC-1, Inc. and R-Course Promotions, LLC have been combined from October 30, 2007 forward through the date of merger. The Company is a motorsports marketing business focused primarily in road racing events in North America utilizing NASCAR type competition equipment. |
2. Summary of Significant Accou
2. Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The Company’s condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Interim Condensed Financial Statements The accompanying condensed financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete condensed financial statements. In our opinion the condensed financial statements include all adjustments (consisting of normal recurring accruals) necessary in order to make the condensed financial statements not misleading. Operating results for the three months ended March 31, 2020 are not necessarily indicative of the final results that may be expected for the year ended December 31, 2020. For more complete financial information, these unaudited condensed financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2020 filed with the SEC. Use of Estimates The preparation of condensed financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and cash equivalents The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents. The Company has no cash equivalents. The Company maintains cash with a commercial bank . The deposits are made with a reputable financial institution and the Company does not anticipate realizing any losses from these deposits. Property and equipment Property and equipment are recorded at cost and depreciated under the straight line method over each item's estimated useful life. The Company uses a 5 year life for racecars and equipment, 7 years for furniture and fixtures. Financial Instruments The Company measures its financial assets and liabilities in accordance with the requirements of FASB ASC 825 “Financial Instruments”. The carrying values of its lease receivables, accounts payable, note payable (current portion), line of credit, accrued expenses, and other current liabilities approximate fair value due to the short-term maturities of these instruments. Revenue recognition The Company adopted ASU 2014-09, “Revenue from Contracts with Customers” on January 1, 2018, using the modified retrospective method, which did not have a material impact on the timing and amount of product revenues. The new revenue recognition standard prescribes a five-step model that focuses on transfer of control and entitlement to payment when determining the amount of revenue to be recognized. Under the new guidance, an entity is required to perform the following five steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The majority of revenues are from consulting services provided at events which range from one day to one week in length. The Company also earns revenues from entering their race cars into events whereby there is a money purse for finishing positions. The revenues from these events are recognized upon completion of the contracted services. In the event that the Company’s revenues are for services provided under contracts greater than one month in length, the contracts will be billed in total at the onset of the contact period, and to the extent that billings exceed revenue earned, the Company will record such amount as deferred revenue until the revenue is earned. We recognize revenue on these contracts in the period the services are provided under the contract. Expenses associated with providing the services are recognized in the period the services are provided which coincides with when the revenue is earned. Net loss per share The Company utilizes FASB ASC 260, “Earnings per Share.” Basic earnings per share is computed by dividing earnings (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include additional common share equivalents available upon exercise of stock options and warrants using the treasury stock method. Dilutive common share equivalents include the dilutive effect of in-the-money share equivalents, which are calculated based on the average share price for each period using the treasury stock method, excluding any common share equivalents if their effect would be anti-dilutive. For the three months ended March 31, 2020 and 2019 there were no potentially dilutive shares. Products and services, geographic areas and major customers The Company earns revenue from race purses, race event consulting and the occasional sale of racecars, but does not separate sales from different activities into operating segments. Concentrations of debt financing The Company has line of credit agreements with companies owned and operated by the Company’s CEO and majority shareholder. Outstanding principal on these lines of credit account for 7.29% and 20.18% of the Company line of credit balances at March 31, 2020 and December 31, 2019, respectively. See Note 7 for further discussion of line of credit terms and relationships. Concentration of revenue sources The Company has a concentration of revenue sources with companies owned and operated by the Company’s CEO. See Note 9 for further discussion of these sources. Stock based compensation The Company accounts for employee and non-employee stock awards under FASB ASC 718, “Compensation – Stock Compensation”, whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to non-employees are recorded based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable. Recent Accounting Pronouncements Management does not believe that any recently issued, but not yet effective, accounting standards, if adopted, will have a material effect on our condensed financial statements. |
3. Going Concern
3. Going Concern | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | NOTE 3. GOING CONCERN These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company's ability to continue as a going concern is contingent upon its ability to achieve and maintain profitable operations, and the Company’s ability to raise additional capital as required. The loss from operations was $32,389 and the accumulated deficit was $3,372,810 as of and for the three months ended March 31, 2020. These conditions raise substantial doubt about the Company's ability to continue as a going concern for a period of twelve months from the issuance date of this report. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty. |
4. Fixed Assets
4. Fixed Assets | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets | NOTE 4. FIXED ASSETS Fixed asset values recorded at cost are as follows: March 31, December 31, Simulation Rig $ 11,013 $ 11,013 Less: Accumulated depreciation (4,407 ) (3,856 ) Fixed assets, net $ 6,606 $ 7,157 Depreciation expense was $551 and $3,051 for the three months ended March 31, 2020 and 2019, respectively. |
5. Note Receivable - Related Pa
5. Note Receivable - Related Party | 3 Months Ended |
Mar. 31, 2020 | |
Note Receivable - Related Party | |
Note Receivable - Related party | NOTE 5. NOTE RECEIVABLE – RELATED PARTY On June 1, 2019, the Company sold two racecars to a related party for a $50,000 note receivable, resulting in a gain of $20,000. The interest rate on the note is 1% per annum and payments of $1,000 per month began August 2019 and increase to $4,778 per month in March 2020, with a final payment of $525 in December 2020. The balance of the note was $42,360 as of March 31, 2020 and December 31, 2019, respectively. |
6. Lease Receivable - Related P
6. Lease Receivable - Related Party | 3 Months Ended |
Mar. 31, 2020 | |
Lease Receivable - Related Party | |
Lease Receivable - Related Party | NOTE 6. LEASE RECEIVABLE – RELATED PARTY On January 28, 2020, the Company purchased an Audi Sportscar from a related party for $300,000. On February 15, 2020, the Company leased the vehicle back to the same related party. The term of the lease is for 24 months with payments of $14,125 per month, with a purchase option at the end of the lease of $1,000. At the end of the lease, 200,000 shares of stock of the Company owned by the related party will be cancelled at a value of $.15 per share. In addition, the related party has the right to purchase the car for $1,000. The lease is classified as a direct financing lease under ASC 842. The present value of the lease payments, excluding the end of lease provisions, discounted at an interest rate of 12%, is $300,063 with an estimated residual value of approximately $24,000. The Company is using the actual cost of the vehicle as the initial value of the lease in accordance with ASC 842-30-55-17A. For the three months ended March 31, 2020, the company recorded $4,852 of interest income related to this lease. The undiscounted cash flow principal payments for the remaining term of the lease will be as follows: 2020 $ 141,250 2021 169,500 2022 14,125 Total lease payments receivable 324,875 Less deferred interest (37,652 ) Net investment in direct financing leases 287,223 Less current portion (153,826 ) Long-term lease receivable $ 133,397 |
7. Lines of Credit
7. Lines of Credit | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Lines of Credit | NOTE 7. LINES OF CREDIT On October 15, 2012, the Company entered into a revolving line of credit agreement with TVP Investments, LLC, a Georgia Limited Liability Company in the amount up to $500,000. The line of credit is unsecured, bears interest of 10% and has a maturity date of December 31, 2019. As of March 31, 2020, and December 31, 2019, the balance of the line of credit was $75,000 for both periods. As of March 31, 2020, and December 31, 2019, the Company had accrued interest on this line of credit in the amounts of $46,793 and $44,918, respectively. The Company also has a business line of credit up to $3,000 with Well Fargo bank. The line of credit is unsecured with a variable interest rate of approximately 18.0%. No amounts have been drawn on this line of credit. |
8. Stockholders' Equity
8. Stockholders' Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 8. STOCKHOLDERS’ EQUITY There are 10,000,000 shares of preferred stock authorized with a $.001 par value, of which no shares are issued and outstanding. There are 190,000,000 shares of common stock authorized with a par value of $0.001 per share, of which 13,929,581 shares are issued and outstanding. In January 2017, the Company entered into a 36-month warehouse lease with Rick Ware Leasing, LLC, payable in 1,200,000 shares of the Company’s common stock (400,000 shares annually). As of December 31, 2019 and March 31, 2020, the remaining 800,000 shares valued at $120,000 have not been issued and are reported within stockholders deficit on the balance sheet. The lease agreement expired December 31, 2019 and was not renewed. See Note 9 for equity transactions with related parties. There were no issuances of preferred or common stock during the three months ended March 31, 2020. |
9. Related Party Transactions
9. Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 9. RELATED PARTY TRANSACTIONS Consulting expense to related parties On December 31, 2018, the Company extended for three years a previous consulting agreement with General Pacific Partners, LLC a company owned and operated by the CEO and majority shareholder to provide consulting services in the motor sports marketing industry. The consulting agreement requires a $5,000 monthly fee and can be terminated by either party pursuant to a 60 day notice. During the three months ended March 31, 2020 and 2019, the Company incurred related party consulting expense of $15,000, respectively for both periods. As of March 31, 2020, and December 31, 2019, the Company had an accrued payable balance due to this related party of $165,000 and $150.000, respectively. Lines of credit – related parties On October 1, 2009, the Company entered into a line of credit agreement for up to $600,000 with a related party General Pacific Partners, LLC owned and operated by the CEO and majority shareholder of the Company that also provides motor sports marketing industry consulting services to the Company as needed. Under the agreement, the Company receives operating fund advances and reimbursement for expenses incurred on behalf of the Company. The outstanding indebtedness under the Line of Credit bears interest at eight percent (8%) per annum. As of March 31, 2020, and December 31, 2019, the Company owed $5,297 and $18,964, respectively, to this related party. As of March 31, 2020, and December 31, 2019, the Company had accrued interest on this line of credit in the amounts of $38,406 and $35,929, respectively. On August 5, 2013, the Company entered into a line of credit agreement for up to $600,000 with a related party FinTekk AP, LLC owned and operated by the CEO and majority shareholder. Under the agreement, the Company receives operating fund advances and reimbursement for expenses incurred on behalf of the Company. As of March 31, 2020, and December 31, 2019, the Company owed $600 respectively, to this related party. As of March 31, 2020, and December 31, 2019, the Company had accrued interest on this line of credit in the amounts of $83,555 and $83,543, respectively. Note payable – related party On March 6, 2020, the Company borrowed $287,500 from a related party. The term of the note is 36 months with payments of $14,055 per month commencing April 6, 2020 including interest at 12%. Payments will continue until the note is paid in full. The Company had accrued interest at March 31, 2020 is $2,318 and a balance of $287,500. |
10. Subsequent Events
10. Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 10. SUBSEQUENT EVENTS Management has concluded that the COVID-19 outbreak in 2020 may have a significant impact on business in general, but the potential impact on the Company is not currently measurable. Due to the level of risk this virus may have on the global economy, it is at least reasonably possible that it could have an impact on the operations of the Company in the near term that could materially impact the Company’s financials. Management has not been able to measure the potential financial impact on the Company but will review commercial and federal financing options should the need arise. |
2. Summary of Significant Acc_2
2. Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The Company’s condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Interim Condensed Financial Statements | Interim Condensed Financial Statements The accompanying condensed financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete condensed financial statements. In our opinion the condensed financial statements include all adjustments (consisting of normal recurring accruals) necessary in order to make the condensed financial statements not misleading. Operating results for the three months ended March 31, 2020 are not necessarily indicative of the final results that may be expected for the year ended December 31, 2020. For more complete financial information, these unaudited condensed financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2020 filed with the SEC. |
Use of Estimates | Use of Estimates The preparation of condensed financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and cash equivalents | Cash and cash equivalents The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents. The Company has no cash equivalents. The Company maintains cash with a commercial bank t . The deposits are made with a reputable financial institution and the Company does not anticipate realizing any losses from these deposits. |
Property and equipment | Property and equipment Property and equipment are recorded at cost and depreciated under the straight line method over each item's estimated useful life. The Company uses a 5 year life for racecars and equipment, 7 years for furniture and fixtures. |
Financial Instruments | Financial Instruments The Company measures its financial assets and liabilities in accordance with the requirements of FASB ASC 825 “Financial Instruments”. The carrying values of its lease receivables, accounts payable, note payable (current portion), line of credit, accrued expenses, and other current liabilities approximate fair value due to the short-term maturities of these instruments. |
Revenue recognition | Revenue recognition The Company adopted ASU 2014-09, “Revenue from Contracts with Customers” on January 1, 2018, using the modified retrospective method, which did not have a material impact on the timing and amount of product revenues. The new revenue recognition standard prescribes a five-step model that focuses on transfer of control and entitlement to payment when determining the amount of revenue to be recognized. Under the new guidance, an entity is required to perform the following five steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The majority of revenues are from consulting services provided at events which range from one day to one week in length. The Company also earns revenues from entering their race cars into events whereby there is a money purse for finishing positions. The revenues from these events are recognized upon completion of the contracted services. In the event that the Company’s revenues are for services provided under contracts greater than one month in length, the contracts will be billed in total at the onset of the contact period, and to the extent that billings exceed revenue earned, the Company will record such amount as deferred revenue until the revenue is earned. We recognize revenue on these contracts in the period the services are provided under the contract. Expenses associated with providing the services are recognized in the period the services are provided which coincides with when the revenue is earned. |
Net loss per share | Net loss per share The Company utilizes FASB ASC 260, “Earnings per Share.” Basic earnings per share is computed by dividing earnings (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include additional common share equivalents available upon exercise of stock options and warrants using the treasury stock method. Dilutive common share equivalents include the dilutive effect of in-the-money share equivalents, which are calculated based on the average share price for each period using the treasury stock method, excluding any common share equivalents if their effect would be anti-dilutive. For the three months ended March 31, 2020 and 2019 there were no potentially dilutive shares. |
Products and services, geographic areas and major customers | Products and services, geographic areas and major customers The Company earns revenue from race purses, race event consulting and the occasional sale of racecars, but does not separate sales from different activities into operating segments. |
Concentrations of debt financing | Concentrations of debt financing The Company has line of credit agreements with companies owned and operated by the Company’s CEO and majority shareholder. Outstanding principal on these lines of credit account for 7.29% and 20.18% of the Company line of credit balances at March 31, 2020 and December 31, 2019, respectively. See Note 7 for further discussion of line of credit terms and relationships. |
Concentration of revenue sources | Concentration of revenue sources The Company has a concentration of revenue sources with companies owned and operated by the Company’s CEO. See Note 9 for further discussion of these sources. |
Stock-based compensation | Stock based compensation The Company accounts for employee and non-employee stock awards under FASB ASC 718, “Compensation – Stock Compensation”, whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to non-employees are recorded based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Management does not believe that any recently issued, but not yet effective, accounting standards, if adopted, will have a material effect on our condensed financial statements. |
4. Fixed Assets (Tables)
4. Fixed Assets (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of fixed assets | March 31, December 31, Simulation Rig $ 11,013 $ 11,013 Less: Accumulated depreciation (4,407 ) (3,856 ) Fixed assets, net $ 6,606 $ 7,157 |
6. Lease Receivable - Related_2
6. Lease Receivable - Related Party (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Lease Receivable - Related Party | |
Future minimum lease receivable schedule | 2020 $ 141,250 2021 169,500 2022 14,125 Total lease payments receivable 324,875 Less deferred interest (37,652 ) Net investment in direct financing leases 287,223 Less current portion (153,826 ) Long-term lease receivable $ 133,397 |
2. Summary of Significant Acc_3
2. Summary of Significant Accounting Policies (Details Narrative) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Potentially dilutive shares | 0 | 0 |
Racecars and equipment [Member] | ||
Property and equipment useful lives | 5 years | |
Furniture and Fixtures [Member] | ||
Property and equipment useful lives | 7 years |
3. Going Concern (Details Narra
3. Going Concern (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Net loss | $ (32,389) | $ (27,730) | |
Accumulated deficit | $ (3,372,810) | $ (3,340,421) |
4. Fixed Assets (Details)
4. Fixed Assets (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Abstract] | ||
Simulation Rig | $ 11,013 | $ 11,013 |
Less: Accumulated depreciation | (4,407) | (3,856) |
Fixed assets, net | $ 6,606 | $ 7,157 |
4. Fixed Assets (Details Narrat
4. Fixed Assets (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 551 | $ 3,051 |
5. Note Receivable (Details Nar
5. Note Receivable (Details Narrative) - Two Racecars [Member] - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 | Jun. 01, 2019 |
Note receivable | $ 42,360 | $ 42,360 | $ 50,000 |
Note receivable interest rate | 1.00% |
6. Lease Receivable - Related_3
6. Lease Receivable - Related Party (Details) | Mar. 31, 2020USD ($) |
Lease Receivable - Related Party | |
2020 | $ 141,250 |
2021 | 169,500 |
2022 | 14,125 |
Total lease payments receivable | 324,875 |
Less deferred interest | (37,652) |
Net investment in direct financing leases | 287,223 |
Less current portion | (153,826) |
Long-term lease receivable | $ 133,397 |
6. Lease Receivable - Related_4
6. Lease Receivable - Related Party (Details Narrative) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Receivables [Abstract] | |
Vehicle purchased | $ 300,000 |
Interest income | $ 4,852 |
7. Lines of Credit (Details Nar
7. Lines of Credit (Details Narrative) - USD ($) | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Interest expense | $ 1,875 | $ 1,875 | ||
TVP Investments [Member] | ||||
Line of credit initiation date | Oct. 15, 2012 | |||
Line of credit maximum amount | $ 500,000 | |||
Line of credit interest rate | 10.00% | |||
Line of credit expiration date | Dec. 31, 2023 | |||
Accrued interest | 44,918 | $ 37,418 | ||
Interest expense | $ 7,500 | $ 7,500 | ||
Wells Fargo [Member] | ||||
Line of credit maximum amount | 3,000 | |||
Line of credit interest rate | 18.00% | |||
Line of credit expiration date | Jul. 31, 2022 | |||
Line of credit balance | $ 0 |
8. Stockholders' Equity (Detail
8. Stockholders' Equity (Details Narrative) | 3 Months Ended |
Mar. 31, 2020USD ($)shares | |
Equity [Abstract] | |
Stock to be issued for lease agreement, shares | shares | 800,000 |
Stock to be issued for lease agreement, value | $ | $ 120,000 |
9. Related Party Transactions (
9. Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Accounts payable, related party | $ 176,335 | $ 161,601 | |
Due to related parties | $ 5,897 | 18,964 | |
General Pacific Partners [Member] | Line of Credit [Member] | |||
Line of credit initiation date | Oct. 1, 2009 | ||
Line of credit maximum amount | $ 600,000 | ||
Line of credit interest rate | 8.00% | ||
Line of credit amount outstanding | $ 5,297 | 18,964 | |
Accrued interest | $ 38,406 | 35,929 | |
FinTekk [Member] | Line of Credit [Member] | |||
Line of credit initiation date | Aug. 5, 2013 | ||
Line of credit maximum amount | $ 600,000 | ||
Line of credit amount outstanding | 600 | 600 | |
Accrued interest | 83,555 | 83,543 | |
Consulting Agreement [Member] | General Pacific Partners [Member] | |||
Related party expense | 15,000 | $ 15,000 | |
Accounts payable, related party | 165,000 | $ 150,000 | |
Note Payable - Related Party [Member] | |||
Accrued interest | 2,318 | ||
Note payable, face amount | 287,500 | ||
Note payable - related party | $ 287,500 | ||
Debt stated interest rate | 12.00% |