The accompanying notes are an integral
part of these condensed unaudited financial statements.
The accompanying notes are an integral
part of these condensed unaudited financial statements.
NOTES TO CONDENSED UNAUDITED FINANCIAL
STATEMENTS
FOR THE THREE AND NINE
MONTH PERIODS ENDED JUNE 30, 2014 AND 2013 AND THE PERIOD FROM INCEPTION (DECEMBER 5, 2005) TO JUNE 30, 2014
NOTE 1 - ORGANIZATION AND BUSINESS OPERATIONS
Pacific Oil Company
(“the Company”) was originally incorporated in Nevada on December 5, 2005 as Kat Racing, Inc. On January 4, 2013,
the Company changed its name to Prairie West Oil & Gas, Ltd and subsequently on July 26, 2013 to Pacific Oil Company.
The Company is an exploration stage junior energy company.
NOTE 2 - GOING CONCERN
The Company's financial statements are
prepared using generally accepted accounting principles 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 yet established
an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern, has incurred
losses of $791,901 since inception (December 5, 2005) through June 30, 2014 and had a working capital and shareholder deficit of
$63,749 at June 30, 2014 . Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern.
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.
In order to continue as a going concern,
the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the
Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and
seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing
any of its plans.
The ability of the Company to continue
as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and
eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include
any adjustments that might be necessary if the Company is unable to continue as a going concern.
PACIFIC OIL COMPANY
(An Exploration Stage Company)
NOTES TO CONDENSED UNAUDITED FINANCIAL
STATEMENTS
FOR THE THREE AND NINE
MONTH PERIODS ENDED JUNE 30, 2014 AND 2013 AND THE PERIOD FROM INCEPTION (DECEMBER 5, 2005) TO JUNE 30, 2014
NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES
Interim Financial Statements
The accompanying financial statements
have been prepared by the Company without audit in accordance with SEC rules for quarterly reports on form 10-Q. In the opinion
of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position,
results of operations, and cash flows at June 30, 2014, and for all periods presented herein, have been made.
Certain information and footnote disclosures
normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States
of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with
the financial statements and notes thereto included in the Company's September 30, 2013 (restated) audited financial statements.
The results of operations for the periods ended June 30, 2014 and 2013 are not necessarily indicative of the operating results
for the full years.
Cash and cash equivalents
For purposes of the statement of cash flows, the Company
considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.
Development Stage Company
The Company is in the development stage as defined under
the then current Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)
915-205 “Development-Stage Entities,” and among the additional disclosures required as a development stage company
are that our financial statements were identified as those of a development stage company, and that the statements of operations,
movement in stockholders’ equity (deficit) and cash flows disclosed activity since the date of our inception (December 5,
2005) as a development stage company. Effective June 10, 2014 FASB changed its regulations with respect to Development Stage Entities
and these additional disclosures are no longer required for annual reporting periods beginning after December 15, 2014 with the
option for entities to early adopt these new provisions. The Company has not elected to early adopt these provisions and consequently
these additional disclosures are included in these financial statements.
Use of Estimates and Assumptions
The preparation of financial statements
in conformity with US Generally Accepted Accounting Practices requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates
and assumptions related to the deferred income tax asset valuation allowances. The Company bases its estimates and assumptions
on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs
and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially
and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual
results, future results of operations will be affected.
PACIFIC OIL COMPANY
(An Exploration Stage Company)
NOTES TO CONDENSED UNAUDITED FINANCIAL
STATEMENTS
FOR THE THREE AND NINE
MONTH PERIODS ENDED JUNE 30, 2014 AND 2013 AND THE PERIOD FROM INCEPTION (DECEMBER 5, 2005) TO JUNE 30, 2014
NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Derivative Liability
The Company evaluates its convertible
instruments, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify
as derivatives to be separately accounted for under ASC Topic 815, “Derivatives and Hedging.” The result of this accounting
treatment is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In
the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as
other income (expense). Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion
date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become
subject to reclassification under ASC Topic 815 are reclassified to liabilities at the fair value of the instrument on the reclassification
date. We analyzed the derivative financial instruments (the Convertible Note), in accordance with ASC 815. The objective is to
provide guidance for determining whether an equity-linked financial instrument is indexed to an entity’s own stock. This
determination is needed for a scope exception which would enable a derivative instrument to be accounted for under the accrual
method. The classification of a non-derivative instrument that falls within the scope of ASC 815-40-05 “Accounting for Derivative
Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock” also hinges on whether the instrument
is indexed to an entity’s own stock. A non-derivative instrument that is not indexed to an entity’s own stock cannot
be classified as equity and must be accounted for as a liability. There is a two-step approach in determining whether an instrument
or embedded feature is indexed to an entity’s own stock. First, the instrument's contingent exercise provisions, if any,
must be evaluated, followed by an evaluation of the instrument's settlement provisions. The Company utilized multinomial lattice
models that value the derivative liability within the notes based on a probability weighted discounted cash flow model. The Company
utilized the fair value standard set forth by the Financial Accounting Standards Board, defined as the amount at which the assets
(or liability) could be bought (or incurred) or sold (or settled) in a current transaction between willing parties, that is, other
than in a forced or liquidation sale.
Fair Value Measurements
The Company adopted ASC No. 820-10 (ASC
820-10), Fair Value Measurements. ASC 820-10 relates to financial assets and financial liabilities.
ASC 820-10 defines fair value, establishes
a framework for measuring fair value in accounting principles generally accepted in the United States of America (GAAP), and expands
disclosures about fair value measurements. The provisions of this standard apply to other accounting pronouncements that require
or permit fair value measurements and are to be applied prospectively with limited exceptions.
ASC 820-10 defines fair value as the
price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. This standard is now the single source in GAAP for the definition of fair value, except for the fair value
of leased property. ASC 820-10 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 that are 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 under ASC 820-10 are described below:
|
¾
|
Level 1. Observable inputs such as quoted
prices in active markets;
|
|
¾
|
Level 2. Inputs, other than the quoted
prices in active markets, that are observable either directly or indirectly; and
|
|
¾
|
Level 3. Unobservable inputs in which
there is little or no market data, which require the reporting entity to develop its own assumptions.
|
PACIFIC OIL COMPANY
(An Exploration Stage Company)
NOTES TO CONDENSED UNAUDITED FINANCIAL
STATEMENTS
FOR THE THREE AND NINE
MONTH PERIODS ENDED JUNE 30, 2014 AND 2013 AND THE PERIOD FROM INCEPTION (DECEMBER 5, 2005) TO JUNE 30, 2014
NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Fair Value Measurements (Continued)
The carrying value of cash, accounts payable, accounts payable
– related party and note payable related party approximates their fair value due to the short-term maturity of these financial
instruments.
Income Taxes
Potential benefits of income tax losses are
not recognized in the accounts until realization is more likely than not. The Company has adopted ASC 740 “Accounting for
Income Taxes” as of its inception. Pursuant to ASC 740, the Company is required to compute tax asset benefits for net operating
losses carried forward. The potential benefits of net operating losses have not been recognized in this financial statement because
the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.
Basic and Diluted Loss per Share
The Company computes loss per share
in accordance with ASC-260, “Earnings per Share” which requires presentation of both basic and diluted earnings per
share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders
by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive
potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect
is anti-dilutive.
The Company has previously had potentially
dilutive debt instruments outstanding in the form of convertible notes payable – related party. However, as the Company has
incurred losses since Inception, these potentially dilutive shares of common stock have been excluded from the calculation of loss
per share as their effect would have been anti-dilutive. Consequently basic and diluted loss per share were identical for the three
and nine months ended June 30, 2014 and 2013.
No potentially dilutive debt or equity
instruments were issued or outstanding during the three and nine month ended June 30, 2014.
Advertising
The Company follows the policy of charging the costs of advertising
to expenses incurred. The Company incurred $0 in advertising costs during the three and nine month period ended June 30, 2014 and
2013.
Stock-based Compensation
The Company records stock based compensation
in accordance with the guidance in ASC Topic 718 (Accounting for Share Based Payments) which requires the Company to recognize
expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation
transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method.
The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.
PACIFIC OIL COMPANY
(An Exploration Stage Company)
NOTES TO CONDENSED UNAUDITED FINANCIAL
STATEMENTS
FOR THE THREE AND NINE
MONTH PERIODS ENDED JUNE 30, 2014 AND 2013 AND THE PERIOD FROM INCEPTION (DECEMBER 5, 2005) TO JUNE 30, 2014
NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Revenue Recognition
The Company recognizes service revenue
using four basic criteria that must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists;
(2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination
of criteria (3) and (4) are based on management’s judgment regarding the fixed nature of the selling prices of the products
delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances,
and other adjustments are provided for in the same period the related sales are recorded. The Company defers any revenue for which
the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine
that the product has been delivered or no refund will be required.
Correction of an error in previously
issued financial statements
The Company follows guidance under ASC
250-10-45-23 for reporting any error in the financial statements of a prior period discovered after the financial statements are
issued or are available to be issued. The current comparative statements as presented reflect the retroactive application of any
error corrections. Those items that are reported as error corrections in the Company’s restatements of net income and retained
earnings, as well as other affected balances for all periods reported there-in, are disclosed in Note 5 of the footnotes to the
financial statements presented herein.
Recent Accounting Pronouncements
Development Stage Company
We are in the development stage as defined
under the then current Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)
915-205 “Development-Stage Entities” and among the additional disclosures required as a development stage company are
that our financial statements were identified as those of a development stage company, and that the statements of operations, stockholders’
deficit and cash flows disclosed activity since the date of our Inception December 5, 2005) as a development stage company. Effective
June 10, 2014 FASB changed its regulations with respect to Development Stage Entities and these additional disclosures are no longer
required for annual reporting periods beginning after December 15, 2014 with the option for entities to early adopt these new provisions.
We have not elected to early adopt these provisions and consequently these additional disclosures are included in these financial
statements.
The Company does not believe that other
than disclosed above, recently issued, but not yet adopted, accounting pronouncements will have a material impact on its financial
position, results of operations or cash flows.
NOTE 4 - RELATED PARTY TRANSACTIONS
In support of the Company’s efforts
and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations
or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment
for continued support by shareholders. Amounts represent advances or amounts paid in satisfaction of liabilities. The advances
are considered temporary in nature and have not been formalized by a promissory note.
The Company had received $43,255 and
$56,071 as of September 30, 2013 (restated) and June 30, 2014 as advances from related parties to fund ongoing operations. In addition,
as of June 30, 2014, a related party note payable balance was $ $1,174. All of the related party accounts and note payable are
non-interest bearing, unsecured and due upon demand.
PACIFIC OIL COMPANY
(An Exploration Stage Company)
NOTES TO CONDENSED UNAUDITED FINANCIAL
STATEMENTS
FOR THE THREE AND NINE
MONTH PERIODS ENDED JUNE 30, 2014 AND 2013 AND THE PERIOD FROM INCEPTION (DECEMBER 5, 2005) TO JUNE 30, 2014
NOTE 5 - CORRECTION OF AN ERROR IN PREVIOUSLY ISSUED FINANCIAL
STATEMENTS
The Company follows guidance under ASC
250-10-45-23 for reporting any error in the financial statements of a prior period discovered after the financial statements are
issued or are available to be issued. The error resulted from the Company not properly reporting convertible debt to a related
party and the associated derivative liability. The current comparative statements as presented reflect the retroactive application
of any error corrections. Those items that are reported as error corrections in the Company’s restatements of net income
and retained earnings, as well as other affected balances for all periods reported there-in, are disclosed in Note 5 of the footnotes
to the financial statements presented herein.
PACIFIC OIL COMPANY
(An Exploration Stage Company)
Balance Sheet and Statement
of Operations (restated)
BALANCE SHEET
|
|
|
|
09/30/13
|
|
|
|
|
|
As Filed
|
|
Adjustments
|
|
|
Restated Actual
|
Assets
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
Cash
|
$
|
820
|
$
|
-
|
|
$
|
820
|
Total current assets
|
|
820
|
|
-
|
|
|
820
|
|
|
|
|
|
|
|
|
Total Assets
|
$
|
820
|
$
|
-
|
|
$
|
820
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
$
|
746
|
$
|
$ 16,519
|
(a)
|
$
|
17,265
|
Account Payable-related party
|
|
121,079
|
|
(77,824)
|
(b)
|
|
43,255
|
Derivative Liability
|
|
-
|
|
173,856
|
(b)
|
|
173,856
|
Convertible note payable - related party, net of discount $57,618
|
|
-
|
|
20,206
|
(b)
|
|
20,206
|
Total current liabilities
|
|
121,825
|
|
132,757
|
|
|
254,582
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
121,825
|
|
132,757
|
|
|
254,582
|
|
|
|
|
|
|
|
|
Stockholders' Deficiency
|
|
|
|
|
|
|
|
Common Stock, $0.001 par value 300,000,000 Common Shares
|
|
|
|
|
|
|
|
Authorized 57,490 Common Shares issued and outstanding
|
|
|
|
|
|
|
|
as of September 30, 2013
|
|
57
|
|
-
|
|
|
57
|
Additional paid-in capital
|
|
130,751
|
|
-
|
|
|
130,751
|
Deficit accumulated during development stage
|
|
(251,813)
|
|
(132,757)
|
(a, b)
|
|
(384,570)
|
Total stockholders’ deficit
|
|
(121,005)
|
|
(132,757)
|
|
|
(253,762)
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity
|
$
|
820
|
|
-
|
|
$
|
820
|
|
|
|
|
|
|
|
|
STATEMENT OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
OPERATING EXPENSE
|
|
|
|
|
|
|
|
Professional Fees
|
|
15,050
|
|
16,519
|
(a)
|
|
31,569
|
General and administrative expense
|
|
7,069
|
|
-
|
|
|
7,069
|
TOTAL OPERATING EXPENSE
|
|
22,119
|
|
16,519
|
|
|
38,638
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
|
|
Related party income
|
|
-
|
|
-
|
|
|
-
|
Change in fair value of derivative
|
|
-
|
|
(96,032)
|
(b)
|
|
(96,032)
|
Interest Expense
|
|
(8,910)
|
|
(20,206)
|
(b)
|
|
(29,116)
|
Total Other Income (Expense)
|
|
(8,910)
|
|
(116,238)
|
|
|
(125,148)
|
|
|
|
|
|
|
|
|
LOSS BEFORE INCOME TAXES
|
|
(31,029)
|
|
(132,757)
|
|
|
(163,786)
|
|
|
|
|
|
|
|
|
Provision for income tax
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
|
$
|
(31,029)
|
$
|
(132,757)
|
|
$
|
(163,786)
|
|
|
|
|
|
|
|
|
Basic & Diluted (Loss) per Common Share:
|
$
|
(0.54)
|
$
|
(2.31)
|
|
$
|
(2.85)
|
|
|
|
|
|
|
|
|
Basic & Diluted Weighted Average Number of Common Shares:
|
|
57,490
|
|
57,490
|
|
|
57,490
|
(a) Relates to account payable
(b) Relates to derivative liability
PACIFIC OIL COMPANY
(An Exploration Stage Company)
NOTES TO CONDENSED UNAUDITED FINANCIAL
STATEMENTS
FOR THE THREE AND NINE
MONTH PERIODS ENDED JUNE 30, 2014 AND 2013 AND THE PERIOD FROM INCEPTION (DECEMBER 5, 2005) TO JUNE 30, 2014
NOTE 6 – DERIVATIVE LIABILITIES
As discussed in Note 7 under Convertible
Debentures, the Company issued convertible notes payable that provide for the issuance of convertible notes with variable conversion
provisions. The conversion terms of the convertible notes are variable based on certain factors, such as the future price of the
Company’s common stock. The number of shares of common stock to be issued is based on the future price of the Company’s
common stock. The number of shares of common stock issuable upon conversion of the promissory note is indeterminate. Due to the
fact that the number of shares of common stock issuable could exceed the Company’s authorized share limit, the equity environment
is tainted and all additional convertible debentures and warrants are included in the value of the derivative. Pursuant to ASC
815-15 Embedded Derivatives, the fair values of the variable conversion option and warrants and shares to be issued were recorded
as derivative liabilities on the issuance date.
The fair values of the Company’s
derivative liabilities were estimated at the issuance date and are revalued at each subsequent reporting date, using a lattice
model. The Company recorded current derivative liabilities of $2,632 and $173,856 at December 31, 2013 and September 30, 2013,
respectively. The change in fair value of the derivative liabilities resulted in a loss of $252 and $0 for the three months ended
December 31, 2013 and 2012, respectively, which has been reported as other income (expense) in the statements of operations. The
loss of $252 for the three months ended December 31, 2013 consisted of a loss of $252 attributable to the fair value of attributable
to the fair value of the convertible notes and settlement of derivative liability from conversion of $171,476.Effective January
1, 2014, the Company, with the consent of the holder of the remaining note convertible – related party totaling $1,174, amended
the terms of the note payable to remove the conversion feature. The remaining $2,632 balance of the derivative liability relating
to the note payable was credited as other income on removal of the conversion feature from the note payable – related party.
The following presents the derivative liability value at
June 30, 2014 and September 30, 2013:
|
|
|
June
30, 2014
|
|
September 30, 2013
|
|
Convertible Note - Related party
|
|
$
|
—
|
|
|
$
|
173,856
|
|
|
|
$
|
—
|
|
|
$
|
173,856
|
|
The following is a summary of changes
in the fair market value of the derivative liability during the three and nine months ended June 30, 2014 and the year ended September
30, 2013:
Balance, September 30, 2012
|
|
$
|
—
|
|
Increase in derivative value due to issuance of convertible note
|
|
|
168,812
|
|
Change in fair market value of derivative liabilities due to the mark to market adjustment
|
|
|
5,044
|
|
Balance, September 30, 2013
|
|
|
173,856
|
|
Debt Conversion
|
|
|
(171,476
|
)
|
Change in fair market value of derivative liabilities due to the mark to market adjustment
|
|
|
252
|
|
Balance, December 31, 2013
|
|
|
2,632
|
|
Cancellation of the conversion feature
|
|
|
(2,632
|
)
|
Balance at June 30, 2014
|
|
$
|
—
|
|
PACIFIC OIL COMPANY
(An Exploration Stage Company)
NOTES TO CONDENSED UNAUDITED FINANCIAL
STATEMENTS
FOR THE THREE AND NINE
MONTH PERIODS ENDED JUNE 30, 2014 AND 2013 AND THE PERIOD FROM INCEPTION (DECEMBER 5, 2005) TO JUNE 30, 2014
NOTE 6 – DERIVATIVE LIABILITIES (CONTINUED)
Key inputs and assumptions used to value
the convertible debentures and warrants issued during the three months ended December 31, 2013 and the year ended September 30,
2013:
-
The underlying stock price was used
as the fair value of the common stock;
-
The note amount as of issuance on July
1, 2013 and September 30, 2013, was $77,823.50. The principal amounts of $20,650, $7,000, $10,500, $10,500, $8,750 and $8,750 were
converted out by the various Note assignees on October 4, 2013. The remaining principal balance as of December 31 2013 was $1,173.50.
-
Capital raising events are not a factor
for this Note since it was unlikely that the Company would raise capital at less than 50% of market during the term which would
reset the conversion feature;
-
It was assumed that the Company would
not file a registration statement and it would not become effective.
-
The Issue would redeem based on availability
of alternative financing, 0% of the time increasing 1.0% monthly to a maximum of 10%;
-
The Holder would convert over a six
month term;
-
The projected annual volatility for
each valuation period was based on the historic volatility of the company
-
Events of default were not modeled since
there was no penalty for default
NOTE 7 – CONVERTIBLE NOTE – RELATED PARTIES
The Company and the related party agreed
to convert the reaming balance of the convertible note to a non-convertible note. The remaining convertible note of $1,174 was
reclassified as a note payable during a prior period.
NOTE 8 – COMMON STOCK
On October 1, 2013 the Company issued
38,100,000 shares to Anthony Sarvucci which resulted in a change in control of the Company. The shares were valued at $137,786
or $0.00362 per share, and were recorded as professional fees for stock based compensation.
On October 4, 2013, the Company issued
29,100,002 as a result of a conversion on a note payable. The total debt relieved was $76,650. The Company issued 21,889,489
additional shares outside the term of the conversion; the excess shares were valued at $193,258 or $0.0088 per share, which is
recorded as a loss on debt conversion. These shares were valued by a valuation expert as there had been no orderly trades of the
Company’s stock to date.
On December 31, 2013, the Company issued
23,241 shares of its common stock in settlement of accounts payable relating to services provided to the Company. The Company valued
the shares based on fair market value services provided to the Company and recorded an expense of $16,519 in the prior period.
NOTE 9 – SUBSEQUENT EVENTS
There are no events subsequent to period ended June 30, 2014
through the date these financial statements are available to be issued or August 12, 2014 that would warrant further disclosures.