The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
Notes to Unaudited Condensed Consolidated
Financial Statements
June 30, 2017
Note 1 - Business
Buscar Company. (“Buscar”, “we”, “us”, “our”, the “Company”) was incorporated in Nevada as Cascade Springs Ltd. on January 19, 2010. In 2012, we amended our Articles of Incorporation to change our name to Colorado Gold Mines, Inc. On June 18, 2014, changed our name to Buscar Oil, Inc. On May 19, 2015, the Company changed its name to Buscar Company. Buscar is domiciled in the state of Colorado, and its corporate headquarter is located in Los Angeles, CA. The Company selected March 31 as its fiscal year end.
The Company’s business is the buying, selling and racing of thoroughbreds that can race in the allowance and stakes levels of thoroughbred racing; however, the Company will initially begin in the claiming level of thoroughbred racing. The Company intends to acquire in its claiming division before acquiring horses for its allowance/stakes division. These horses will provide the Company with revenue and a foundation to build out a stakes level stable. The Company’s main focus will be acquiring horses that will be capable of racing in stake races throughout the Country.
Note 2 - Going Concern
These unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year. Realization values may be substantially different from carrying values as shown and these unaudited condensed consolidated financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. At June 30, 2017, the Company had not yet achieved profitable operations, has accumulated losses of $18,833,949 since its inception and expects to incur further losses in the development of its business, all of which raise substantial doubt about the Company's ability to continue as a going concern. The Company's ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available or on terms acceptable to the Company.
Note 3 - Summary of Significant Accounting Policies
Basis of Presentation of Interim Financial Statements
The accompanying unaudited interim consolidated financial statements as of and for the three ended June 30, 2017 have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q. Accordingly, they do not include all of the information and notes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. All intercompany balances and transactions have been eliminated in consolidation. Operating results for the three ended June 30, 2017 are not necessarily indicative of the results that may be expected for any future periods or the year ending March 31, 2018. The accompanying unaudited consolidated financial statements should be read in conjunction with the Company's 2017 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on July 14, 2017.
Use of Estimates and Assumptions
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. It is reasonably possible that a change in the Company’s estimates will occur in the near term and such change could be material as information becomes available. The Company’s estimates include thoroughbreds reserve for potential impairment, and contingent liabilities.
Consolidation Policy
The consolidated financial statements of the Company include the accounts of the Company and its wholly owned subsidiary, Buscar Stables, Inc. All significant intercompany balances and transactions have been eliminated in consolidation.
Thoroughbreds
The Company depreciates thoroughbreds via straight-line depreciation over its useful life of 3 years.
The thoroughbreds are stated at the lower of cost or market value. The cost was deemed to be the best evidence of market value and the company’s thoroughbreds were therefore stated at cost. Costs of maintaining horses prior to maturity and entered into a race or disposition are capitalized as additional costs of the horse. When a horse is sold or otherwise disposed of, the cost and associated accumulated depreciation are removed from the accounts and the resulting gain or loss is recognized in the statement of operations.
The company evaluates the recoverability of its Long Term Assets in accordance with ASC topic 360, which requires recognition of impairments of long lived assets in the event an indication of impairment exists and the net book value of such assets exceeds the expected future value net cash flows attainable to such assets.
Cost of Development represent stud fee, boarding, training, blacksmith, veterinary and land use for the horses. These specific costs are capitalized until the horse reaches maturity.
Long-Lived Assets
Long-lived assets are evaluated for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted future cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value.
Thoroughbred Revenue Recognition
The Company pursues opportunities to realize revenues from a principal activity: breeding the thoroughbreds. It is the Company’s policy that revenues and gains will be recognized in accordance with ASC Topic 605-10-25, “Revenue Recognition.” Under ASC Topic 605-10-25, revenue earning activities such as selling the horses and the Company has substantially accomplished all it must do to be entitled to the benefits represented by the revenue. Gains or losses from the sale of the horses are recognized when the horse is sold, and the cost and associated accumulated depreciation are removed from the accounts and the resulting gain or loss is recognized in the statement of operations.
Recent Accounting Pronouncements
Revenue from Contracts with Customers
In May 2014, the FASB issued an accounting standards update which modifies the requirements for identifying, allocating, and recognizing revenue related to the achievement of performance conditions under contracts with customers. This update also requires additional disclosure related to the nature, amount, timing, and uncertainty of revenue that is recognized under contracts with customers. This guidance is effective for fiscal and interim periods beginning after December 15, 2017 and is required to be applied retrospectively to all revenue arrangements. The adoption of this guidance is not expected to have a significant impact on the Company’s consolidated financial statements.
Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA and the SEC did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements.
Note 4 - Other Receivables
On December 14, 2016, the Company paid $333,000 for stud fee which is used to mate Milania, one of the Company’s thoroughbreds, with War Front, a highly breaded third-party horse. The amount was capitalized as thoroughbreds. On August 1, 2017, the Company notified its insurance company that the mating was not successful after four breeding sessions. The insurance company approved to cover the loss of $300,000. As a result, the Company recorded $300,000 as other receivables as of June 30, 2017.
Note 5 - Thoroughbreds
|
|
June 30,
2017
|
|
|
March 31,
2017
|
|
Thoroughbreds
|
|
$
|
625,103
|
|
|
$
|
625,103
|
|
Cost of development
|
|
|
77,529
|
|
|
|
410,529
|
|
|
|
|
702,632
|
|
|
|
1,035,632
|
|
Accumulated depreciation
|
|
|
(146,279
|
)
|
|
|
(94,189
|
)
|
Thoroughbreds, net
|
|
$
|
556,353
|
|
|
$
|
941,443
|
|
Depreciation expense for three months ended June 30, 2017 and 2016 was $52,090 and $1,750, respectively. At June 30, 2017 and March 31, 2017, thoroughbreds with a cost basis of $625,105 and accumulated depreciation of $146,279 and $94,189, respectively.
On December 14, 2016, the Company paid $333,000 for stud fee which is used to mate Milania, one of the Company’s thoroughbreds, with War Front, a highly breaded third-party horse. The amount was capitalized as thoroughbreds. On August 1, 2017, the Company notified its insurance company that the mating was not successful after four breeding sessions. The insurance company approved to cover the loss of $300,000. As a result, the Company recognized an impairment loss of $333,000, and reduced the cost of development asset of $333,000.
Note 6 - Long Lived Assets
The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
Long-lived assets are reviewed for recoverability at the lowest level in which there are identifiable cash flows (“asset group”), usually at the thoroughbred level. The carrying amount of an asset group is not considered recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset group. If the asset group is determined not to be recoverable, then an impairment charge will be recognized in the amount by which the carrying amount of the asset group exceeds its fair value, determined using discounted cash flow valuation techniques, as defined in ASC 360,
Property, Plant, and Equipment
.
On August 1, 2017 the company was notified that Milania was not pregnant with War Front after four breeding sessions. The Company recognized an impairment loss of $333,000, and reduced the cost of development asset of $333,000.
Note 7 - Note payable
As of June 30, 2017, and March 31, 2017, the Company recorded note payable of $5,871 and $5,871, respectively. The note bears no interest and is due upon demand.
Note 8 - Commitments and Contingencies
As of June 30, 2017, the Company had a total of $198,281 of outstanding liabilities. As of this date, the Company recognizes $177,270 of outstanding liabilities related to previous Company directors, Robert Sawatsky and Kelly Fielder. The Company’s legal counsel believes that the outstanding liabilities are expected to be paid back to the previous Company directors, Robert Sawatsky and Kelly Fielder, who had originally loaned money to the Company. However, there has been no resolution of this event.
Note 9 - Equity
Preferred Stock
The Company has authorized 50,000,000 preferred shares with a par value of $0.0001 per share. Board of Directors are authorized to divide the authorized shares of Preferred Stock into one or more series, each of which shall be so designated as to distinguish the shares thereof from the shares of all other series and classes.
Series A Preferred Stock
The Company has designated 10,000,000 preferred shares of Series A Preferred Stock with a par value of $0.0001 per share.
As at June 30, 2017 and March 31, 2017, the Company had 8,000,000 shares of Series A Preferred Stock issued and outstanding.
Series B Preferred Stock
The Company has designated 10,000,000 preferred shares of Series B Preferred Stock with a par value of $0.0001 per share.
As at June 30, 2017 and March 31, 2017, the Company had 9,965,000 shares of Series B Preferred Stock issued and outstanding, respectively.
Common Stock
The Company has authorized 500,000,000 shares of common stock with a par value of $0.0001 per share.
During the three months ended June 30, 2017, the Company issued 100,000 shares of common stock for services, with a fair value of $3,201.
As of June 30, 2017, and March 31, 2017, the Company had 18,681,321 and 18,581,321 shares of common stock issued and outstanding, respectively.
Note 10 - Loss Per Common Share
Basic earnings per share (“EPS”) is computed by dividing earnings (loss) attributable to common shareholders by the weighted average number of common shares outstanding for the periods. Diluted EPS reflects the potential dilution of securities that could share in the earnings. As of June 30, 2017 and March 31, 2017 the Company did not have any dilutions.
Note 11 – Subsequent Events
On August 1, 2017, the Company notified its insurance company that Milania didn’t get pregnant with War Front after four breeding sessions. As a result, the Company will receive $300,000 from its insurance company. As of June 30, 2017, the Company recognized accounts receivable of $300,000, impairment loss from thoroughbreds of $333,000, and reduced the cost of development asset of $333,000.