UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
  
☒   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended November 30, 2015
 
☐   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from _________ to __________
 
Commission file number: 333-178210
 
SERVICE TEAM INC.
(Exact name of registrant as specified in its charter)
 
Nevada
61-1653214
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification No.)
 
18482 Park Villa Place, Villa Park, California 92861
(Address of principal executive offices) (Zip Code)
  
(714) 538-5214
(Registrant's telephone number, including area code)
 
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  ☒    No  ☐
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).         Yes  ☒    No  ☐
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of "large accelerated filer", "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.  
 
 
Large accelerated filer ☐         Accelerated filer ☐         Non-accelerated filer ☐        Smaller reporting company ☒
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes  ☐    No  ☒
 
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of January 18, 2016:  13,430,624 common shares and 100,000 shares of preferred stock.
 
 
PART I — FINANCIAL INFORMATION
  
Item 1. Financial Statements.
 
 
TABLE OF CONTENTS
 
 
 
Page
Financial Statements
 
 
 
 
 
Consolidated Balance Sheets as of November 30, 2015 (unaudited) and August 31, 2015
3
 
Consolidated Statements of Operations for the three months ended November 30, 2015 and 2014 (unaudited)
4
 
Consolidated Statement of Shareholders' (Deficit) for the year ended August 31, 2015 (audited) and the three months ended November 30, 2015 (unaudited)
5
 
Consolidated Statement of Cash Flows for the three months ended November 30, 2015 and 2014 (unaudited)
6
 
Notes to the Consolidated Financial Statements  (unaudited)
7
 
 


 
2

SERVICE TEAM INC.
 
CONSOLIDATED BALANCE SHEETS
 
AS OF NOVEMBER 30, 2015 (UNAUDITED) AND AUGUST 31, 2015
 



 
    
 
  
11/30/15
    
8/31/15
  
ASSETS
        
Cash
  
$
22,201
    
$
5,843
  
Accounts receivable, net of allowances of $3,626 and $3,626, respectively
    
202,034
      
179,292
  
Deferred financing costs
    
3,212
      
11,986
  
Total current assets
    
227,447
      
197,121
  
 
                
Property and equipment, net
    
59,982
      
7,977
  
Prepaid expenses
    
14,000
      
9,000
  
TOTAL ASSETS
  
$
301,429
    
$
214,098
  
 
                
LIABILITIES & SHAREHOLDERS' (DEFICIT)
                
Accounts payable
  
$
121,390
    
$
112,596
  
Convertible notes payable, net – related party
    
32,318
      
32,318
  
Convertible notes payable, net
    
53,489
      
30,001
  
Contingent liability
    
-
      
54,100
  
Accrued expense
    
68,548
      
77,738
  
Accrued interest
    
9,540
      
6,367
  
Total current liabilities
    
285,285
      
313,120
  
TOTAL LIABILITIES
    
285,285
      
313,120
  
 
                
Common stock, $0.001 par value, 74,000,000 authorized, 13,430,624 and 13,430,624 issued and outstanding as of November 30, 2015 and August 31, 2015, respectively.
    
13,431
      
13,431
  
Preferred stock – Series A, $0.001 par value, 100,000 authorized, 100,000 and 100,000 issued and outstanding as of November 30, 2015 and August 31, 2015, respectively.
    
100
      
100
  
Additional paid in capital
    
1,612,788
      
1,612,788
  
Subscription payable
    
22,000
      
22,000
  
Accumulated deficit
    
(1,632,175
)
    
(1,747,341
)
TOTAL SHAREHOLDERS' (DEFICIT)
    
16,144
      
(99,022
)
TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT)
  
$
301,429
    
$
214,098
  


The accompanying notes are an integral part of these consolidated financial statements.
 
3

 
 
SERVICE TEAM INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
 
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2015 AND 2014 (UNAUDITED)
  
 
  
3 Months
Ended
11/30/15
    
3 Months
Ended
11/30/14
  
Sales
  
$
925,103
    
$
553,627
  
Cost of sales
    
639,641
      
513,383
  
Gross margin
    
285,462
      
40,244
  
 
                
Operating expenses:
                
General & administrative expenses
    
182,218
      
58,725
  
Depreciation expense
    
1,228
      
497
  
Total operating expenses
    
183,446
      
59,222
  
 
                
Profit (loss) from operations
    
102,016
      
(18,978
)
                 
Other (expense) income:
                
Interest expense
    
(40,950
)
    
(466
)
Gain on contingent consideration
    
54,100
      
-
  
Total other (expense) income
    
13,150
      
(466
)
                 
Net income (loss)
  
$
115,166
    
$
(19,444
)
 
                
Weighted average number of common shares outstanding - basic
    
13,430,624
      
12,512,021
  
Weighted average number of common shares outstanding – fully diluted
    
31,753,408
      
12,512,021
  
 
                
Net income (loss) per share - basic
  
$
0.01
    
$
(0.00
)
Net income (loss) per share – fully diluted
  
$
0.00
    
$
(0.00
)
 
The accompanying notes are an integral part of these consolidated financial statements.

 
4

 
SERVICE TEAM INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' (DEFICIT) FOR THE YEAR
ENDED AUGUST 31, 2015 (AUDITED) AND THE THREE MONTHS
ENDED NOVEMBER 30, 2015 (UNAUDITED)

 
 
 
  
Common Stock
    
Preferred Stock
    
Additional
Paid In
    
Subscription
    
Accumulated
      
 
  
Shares
    
Amount
    
Shares
    
Amount
    
Capital
    
Payable
    
Deficit
    
Total
  
Balance, August 31, 2014
    
12,485,647
    
$
12,486
      
-
    
$
-
    
$
995,650
    
$
-
    
$
(1,109,777
)
  
$
(101,641
)
Imputed Interest on Related Party Debt
    
-
      
-
      
-
      
-
      
683
      
-
      
-
      
683
  
Beneficial Conversion Feature
    
-
      
-
      
-
      
-
      
104,500
      
-
      
-
      
104,500
  
Preferred Shares Issued for Services
    
-
      
-
      
100,000
      
100
      
498,900
      
-
      
-
      
499,000
  
Shares Issued for Cash
    
40,000
      
40
      
-
      
-
      
3,960
      
-
      
-
      
4,000
  
Shares issued for Note Conversion
    
904,977
      
905
      
-
      
-
      
9,095
      
-
      
-
      
10,000
  
Subscription Payable for Note Conversion
    
-
      
-
      
-
      
-
      
-
      
22,000
      
-
      
22,000
  
Net Loss
    
-
      
-
      
-
      
-
      
-
      
-
      
(637,564
)
    
(637,564
)
Balance, August 31, 2015
    
13,430,624
    
$
13,431
      
100,000
    
$
100
    
$
1,612,788
    
$
22,000
    
$
(1,747,341
)
  
$
(99,022
)
Net Income
    
-
      
-
      
-
      
-
      
-
      
-
      
115,166
      
115,166
  
Balance, November 30, 2015
    
13,430,624
    
$
13,431
      
100,000
    
$
100
    
$
1,612,788
    
$
22,000
    
$
(1,632,175
)
  
$
16,144
  
 
The accompanying notes are an integral part of these consolidated financial statements.

 
5
 

SERVICE TEAM INC.
 CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2015 AND 2014  (UNAUDITED)


 
  
11/30/15
    
11/30/14
  
Cash flows from operating activities
        
Net income (loss)
  
$
115,166
    
$
(19,444
)
 
                
Adjustments to reconcile net income (loss) with cash provided by operations:
                
Debt discount amortization
    
23,488
      
-
  
Gain on contingent consideration
    
(54,100
)
    
-
  
Deferred financing cost amortization
    
8,774
      
-
  
Depreciation
    
1,228
      
497
  
Imputed interest
    
-
      
466
  
 
                
Change in operating assets and liabilities:
                
Accounts receivable
    
(22,742
)
    
(15,532
)
Accrued expenses
    
(6,017
)
    
(16,668
)
Prepaid expenses
    
(5,000
)
    
-
  
Accounts Payable
    
8,388
      
77,796
  
Net cash provided by operating activities
    
69,185
      
27,115
  
 
                
Cash flows from investing activities
                
Cash paid for purchase of fixed assets
    
(52,827
)
    
(98
)
Net cash used in investing activities
    
(52,827
)
    
(98
)
 
                
Cash flows from financing activities
                
Proceeds from sale of stock
    
-
      
4,000
  
Payments on loans with Hallmark Venture Group, Inc. *
    
-
      
(17,000
)
Net cash provided by (used in) financing activities
    
-
      
(13,000
)
 
                
Net increase in cash and cash equivalents
    
16,358
      
14,017
  
Cash at beginning of period
    
5,843
      
7,457
  
Cash at end of period
  
$
22,201
    
$
21,474
  
 
                
Supplemental Disclosures
                
Interest Paid
  
$
-
    
$
-
  
Taxes Paid
  
$
-
    
$
-
  
 
* Related Party
                




The accompanying notes are an integral part of these consolidated financial statements.
 
6


SERVICE TEAM, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AT NOVEMBER 30, 2015 (UNAUDITED)
 
NOTE 1 - ORGANIZATION
 
Organization
 
Service Team Inc. (the "Company") was incorporated pursuant to the laws of the State of Nevada on June 6, 2011.  The Company was organized to comply with the warranty obligations of electronic devices manufactured by companies outside of the United States.  The business proved to be unprofitable and the Company reduced its warranty and repair operations.  On June 5, 2013, Service Team Inc. acquired Trade Leasing, Inc. for 4,000,000 shares of its common stock, a commonly held company.  Trade Leasing, Inc., a California corporation, was incorporated on November 1, 2011, and commenced business January 1, 2013.  Trade Leasing, Inc. is principally involved in the manufacturing, maintenance and repair of truck bodies.  
 
The Company has established a fiscal year end of August 31.
 
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Basis of Presentation
 
The consolidated financial statements presented in this report are the combined financial reports of Trade Leasing, Inc. and Service Team Inc. 
 
The Company maintains its accounting records on an accrual basis in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP).
 
The consolidated financial statements present the Balance Sheet, Statements of Operations, Shareholders' Deficit and Cash Flows of the Company. These consolidated financial statements are presented in United States dollars. The accompanying audited, consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q.  All adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations for the interim periods have been made and are of a recurring nature unless otherwise disclosed herein.
 
Principles of Consolidation
 
The accompanying consolidated financial statements include the accounts of Service Team Inc. and Trade Leasing, Inc. both of which are under common control and ownership. The consolidated financial statements herein contain the operations of the wholly-owned subsidiaries listed above. All significant inter-company transactions have been eliminated in the preparation of these financial statements. 
 
Use of Estimates
 
The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.  Actual results could differ from those estimates. 
  
 
7
 
Going Concern
 
The Company's financial statements are prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America, and have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The Company has an accumulated deficit as of November 30, 2015, of $1,632,175. The Company will be dependent upon the raising of additional capital through placement of our common stock in order to implement its business plan. There can be no assurance that the Company will be successful in order to continue as a going concern. The Company is funding its initial operations by issuing common shares and debt.  We cannot be certain that capital will be provided when it is required.
 
Cash and Equivalents
 
Cash and equivalents include investments with initial maturities of three months or less. The Company maintains its cash balances at credit-worthy financial institutions that are insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250,000. There were no cash equivalents at November 30, 2015, or August 31, 2015.
 
Concentration of Credit Risk
 
Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, are cash and cash equivalents. The Company places its cash and temporary cash investments with credit quality institutions. At times, such investments may be in excess of FDIC insurance limits.
 
Accounts Receivable
 
All accounts receivable are due thirty (30) days from the date billed. If the funds are not received within thirty (30) days the customer is contacted to arrange payment. The Company uses the allowance method to account for uncollectable accounts receivable. All accounts were considered collectable at period end and no allowance for bad debts was considered necessary.  The allowance for doubtful accounts as of November 30, 2015, and August 31, 2015 was $3,626 and $3,626 respectively.
 
Accounts Receivable and Revenue Concentrations
 
The Company's wholly owned subsidiary, Trade Leasing, Inc., has more than 400 customers. Three customers represented about 23%, 11% and 10% of total receivables as of November 30, 2015.  One customer represented about 20% of total receivables as of August 31, 2015. During the three month period ended November 30, 2015, the Company had one customer that represented 19% of total sales.  During the three month period ended November 30, 2014, the Company had one customer that represented about 22% of total sales. 

Inventory
 
The Company does not own inventory, materials are purchased as needed from local suppliers; therefore, there was no additional inventory on hand at November 30, 2015 or August 31, 2015. 
 
Property and Equipment
 
Equipment, vehicles and furniture, which are recorded at cost, consist primarily of fabrication equipment and are depreciated using the straight-line method over the estimated useful lives of the related assets (generally 15 years or less). Costs incurred for maintenance and repairs are expensed as incurred and expenditures for major replacements and improvements are capitalized and depreciated over their estimated remaining useful lives. There was $1,228 and $497 of depreciation expense during the three months ended November 30, 2015 and 2014, respectively. 
 
 
8
 
Net property and equipment were as follows at November 30, 2015 and August 31, 2015: 
 
 
  
11/30/15
    
8/31/15
  
Equipment
  
$
243,444
    
$
243,444
  
Vehicles
    
15,000
      
15,000
  
Furniture
    
1,500
      
1,500
  
Leasehold improvements
    
52,827
      
-
  
Subtotal
    
312,771
      
259,944
  
Less: accumulated depreciation
    
(252,789
)
    
(251,967
)
Total Fixed Assets, Net
  
$
59,982
    
$
7,977
  
 
Lease Commitments
 
Service Team Inc., effective September 1, 2015, leased new facilities at 1818 Rosslynn Avenue, Fullerton, California, to manufacture its products.  The Company has moved from 10633 Ruchti Road, South Gate, California, effective October 1, 2015.  The new facility is leased for six and one half years at a price of $10,000 per month, for the first six months; and, $14,000 per month thereafter.  Service Team Inc pays for the fire insurance and property taxes on the building estimated to be approximately $2,000 per month. The location consists of  three acres of land and one building of approximately 30,000 square feet.   The facility is approximately one-third larger than the prior facility in South Gate. 

Our principal executive offices are located in 600 square feet in a building at 18482 Park Villa Place, Villa Park, California 92861. The space is furnished by Hallmark Venture Group, Inc., a related party, at no charge.
 
Beneficial Conversion Features
 
From time to time, the Company may issue convertible notes that may contain an imbedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method.
 
Fair Value of Financial Instruments
 
The Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820 on June 6, 2011. Under this FASB, fair value is defined 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 (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value.
 
 
9
 
The Company has various financial instruments that must be measured under the new fair value standard including: cash, convertible notes payable, accrued expenses, promissory notes payable, accounts receivable and accounts payable. The Company's financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows:   
 
Level 1 – Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.  The fair value of the Company's cash is based on quoted prices and therefore classified as Level 1. 
 
Level 2 - Inputs include quoted prices for similar assets and 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, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).
 
Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.
 
Cash, accounts receivable, accounts payable, promissory notes, convertible notes and accrued expenses reported on the balance sheet are estimated by management to approximate fair market value due to their short term nature.
 
The following table presents assets and liabilities that were measured and recognized at fair value as of November 30, 2015 on a recurring basis:
 
 
      
Total
  
 
      
Realized
  
Description
Level 1
  
Level 2
  
Level 3
  
Loss
  
 
  
$
-
    
$
-
    
$
-
    
$
-
  
Total
  
$
-
    
$
-
    
$
-
    
$
-
  
 
The following table presents assets and liabilities that were measured and recognized at fair value as of August 31, 2015 on a recurring basis:
 
 
      
Total
  
 
      
Realized
  
Description
Level 1
  
Level 2
  
Level 3
  
Loss
  
 
  
$
-
    
$
-
    
$
-
    
$
-
  
Total
  
$
-
    
$
-
    
$
-
    
$
-
  

 
Income Taxes
In assessing the realization of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on the level of historical operating results and the uncertainty of the economic conditions, the Company has recorded a full valuation allowance against its deferred tax assets at November 30, 2015 and August 31, 2015 where it cannot conclude that it is more likely than not that those assets will be realized.

10
 
Revenue Recognition
 
Trade Leasing Division
 
The Trade Leasing Division receives orders from customers to build or repair truck bodies. The company builds the requested product. At the completion of the product the truck is delivered to the customer.  If the customer accepts the product Trade Leasing Inc. issues an invoice to the customer for the job. The invoice is entered into our accounting system and is recognized as revenue at that time.
 
In the Trade Leasing Division we use the completed contract method for truck bodies built, which typically have construction periods of 15 days or less. Contracts are considered complete when title has passed, the customer has accepted the product and we do not retain risks or rewards of ownership of the truck bodies. Losses are accrued if manufacturing costs are expected to exceed manufacturing contract revenue.  Manufacturing expenses are primarily composed of aluminum cost, which is the largest component of our raw materials cost and the cost of labor. 
 
Service Products Division
 
The Service Products Division shut down in fiscal 2013 repaired or replaced electrical appliances (mostly televisions), covered by warranties or insurance companies.  The Company had a price list of its services that sets forth a menu of charges for various repairs or replacements.  At the completion of the repair, an invoice was prepared itemizing the parts used and fixed labor rate costs billed by the Company.  The invoice was entered into our accounting system and recognized as revenue at that time. Our invoice was paid by the warranty insurance companies.  We did not take title to the product at any point during this process.
 
As described above, in accordance with the requirements of ASC 605-10-599, the Company recognized revenue when (1) persuasive evidence of an arrangement exists (contracts); (2) delivery has occurred; (3) the seller's price is fixed or determinable (per the customer's contract); and (4) collectability is reasonably assured (based upon our credit policy).
 
Share Based Expenses
 
The Company accounts for the issuance of equity instruments to acquire goods and/or services based on the fair value of the goods and services or the fair value of the equity instrument at the time of issuance, whichever is more readily determinable. The Company's accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of standards issued by the FASB. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor's performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement.

Stock Based Compensation
 
In December of 2004, the FASB issued a standard which applies to transactions in which an entity exchanges its equity instruments for goods or services and also applies to liabilities an entity may incur for goods or services that are based on the fair value of those equity instruments. For any unvested portion of previously issued and outstanding awards, compensation expense is required to be recorded based on the previously disclosed methodology and amounts. Prior periods presented are not required to be restated. We adopted the standard as of inception.  The Company has not issued any stock options to its Board of Directors and officers as compensation for their services.  If options are granted, they will be accounted for at a fair value as required by the FASB ASC 718.
  
 
11
 
Net Loss Per Share
 
The Company adopted the standard issued by the FASB, which requires presentation of basic earnings or loss per share and diluted earnings or loss per share. Basic income (loss) per share ("Basic EPS") is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share ("Diluted EPS") are similarly calculated using the treasury stock method except that the denominator is increased to reflect the potential dilution that would occur if dilutive securities at the end of the applicable period were exercised.  During the three months ended November 30, 2015, the company reported additional dilutive shares of 18,322,784 due to the impact of convertible notes payable to both related parties and third parties outstanding during the period. During the three months ended November 30, 2014, because the Company does not have any potentially dilutive securities, the Diluted EPS equalled the Basic EPS.

Recent Accounting Pronouncements
 
In June 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-12, Compensation – Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. The new guidance requires that share-based compensation that require a specific performance target to be achieved in order for employees to become eligible to vest in the awards and that could be achieved after an employee completes the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation costs should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. This new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in this Update either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of ASU 2014-12 is not expected to have a material impact on our financial position or results of operations.

In June 2014, the FASB issued ASU No. 2014-10: Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation, to improve financial reporting by reducing the cost and complexity associated with the incremental reporting requirements of development stage entities. The amendments in this update remove all incremental financial reporting requirements from U.S. GAAP for development stage entities, thereby improving financial reporting by eliminating the cost and complexity associated with providing that information. The amendments in this Update also eliminate an exception provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. The amendments to eliminate that exception simplify U.S. GAAP by reducing avoidable complexity in existing accounting literature and improve the relevance of information provided to financial statement users by requiring the application of the same consolidation guidance by all reporting entities. The elimination of the exception may change the consolidation analysis, consolidation decision, and disclosure requirements for a reporting entity that has an interest in an entity in the development stage. The amendments related to the elimination of inception-to-date information and the other remaining disclosure requirements of Topic 915 should be applied retrospectively except for the clarification to Topic 275, which shall be applied prospectively. For public companies, those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early adoption is permitted. The adoption of ASU 2014-10 is not expected to have a material impact on our financial position or results of operations.
 
 
12
 

 
NOTE 3 – CAPITAL STOCK
 
The Company's authorized capital is 74,000,000 common shares with a par value of $0.001 per share and 100,000 preferred shares with a par value of $0.001 per share.  
 
Three month period ended November 30, 2015

During the three months ended November 30, 2015, the Company issued no shares.

As of November 30, 2015 the Company has not granted any stock options.  
 
Fiscal year ended August 31, 2015
On January 20, 2015, the Company authorized and issued 100,000 shares of Series A Preferred Stock to be granted to Hallmark Holdings Inc. (a related party) in exchange for services. The 100,000 shares grant the holder to have the right to vote on all shareholder matters equal to 500 votes per share. The Series A shares were valued according to the additional voting rights assigned. The value assigned to the voting rights was derived from a model utilizing control premiums to value the voting control of the preferred stock. The value assigned to the Series A shares was $499,000 and was recorded on the grant date as stock based compensation.  

On January 23, 2015, the Company filed a Certificate of Designation to establish the rights and benefits of
Class A preferred stock.

During 2015, the company issued 40,000 shares in exchange for $4,000 from a third party investor.

On August 26, 2015, Tangers Investment Group LLC converted $10,000 of its Note in the amount of into 904,977 shares of common stock.  As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion.

During 2015, Tangers Investment Group LLC converted $22,000 of its Note into a stock payable.  As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion.

During the twelve months ended August 31, 2015, $683 of interest expense was imputed from a promissory note with related party Hallmark Venture Group, Inc. based upon the average balance during the period at an interest rate of 10 percent.

As of August 31, 2015 the Company has not granted any stock options.  


NOTE 4 – DEBT TRANSACTIONS

Convertible Notes Payable – Related Party

US Affiliated

On July 31, 2014, the Company issued a convertible note to Hallmark Venture Group  inc. (a related party) for $18,003 of cash consideration. On September 31, 2014, Hallmark Venture Group Inc. sold the note to   U S Affiliated Inc. (an unrelated third party). The note bears interest at 6%, matures on July 31, 2015, and is convertible into common stock at 50% of the closing market price of the lowest 3 trading days during the previous 25 trading days prior to conversion. The Company recorded a debt discount equal to $18,003 due to this conversion feature. The note was amended during July 2015 to mature on November 30, 2015.  The note had accrued interest of $1,439 and $1,170 as of November 30, 2015 and August 31, 2015, respectively.  The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.0005.  In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. The debt discount had a balance at November 30, 2015 and August 31, 2015was $0 and $0, respectively.
 
 
13

 
On July 31, 2014, the Company issued a convertible note to Hallmark Venture Group Inc. (a related party) for $14,315 of cash consideration. . On September 31, 2014, Hallmark Venture Group Inc. sold the note to U S Affiliated Inc. (an unrelated third party).  The note bears interest at 6%, matures on July 31, 2015, and is convertible into common stock at 50% of the closing market price of the lowest 3 trading days during the previous 25 trading days prior to conversion. The Company recorded a debt discount equal to $14,315 due to this conversion feature. The note was amended during July 2015 to mature on November 30, 2015.  The note had accrued interest of $1,144 and $930 as of November 30, 2015 and August 31, 2015, respectively.  The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.0005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. The debt discount had a balance at November 30, 2015 and August 31, 2015 of $0 and $0, respectively.

Promissory Note – Related Party

On August 25, 2011, the Company entered into a loan agreement with Hallmark Venture Group, Inc., with no maturity date or interest rate. During the year ended August 31, 2015, the Company repaid net funds of $27,158.  During the year ended August 31, 2015, the Company has imputed interest at a reasonable rate of 10 percent totaling $683.

Convertible Notes Payable – Third Party

 On July 2, 2015, the Company issued a convertible note to Vis Veres Group for $38,000 of cash consideration.  The note bears interest at 8%, matures on April 7, 2016, and is convertible into common stock at 55% of the lowest 3 closing market prices of the previous 20 trading days prior to conversion. The Company recorded a debt discount equal to $35,000 due to this conversion feature. The Company also recorded a $3,000 debt discount due to accrued interest required by the agreement to be accrued at the beginning of the note. The note had accrued interest of $1,258 and $500 as of November 30, 2015 and August 31, 2015, respectively.  The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.00005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. The debt discounts had a balance at November 30, 2015 and August 31, 2015 of $20,154 and $29,857, respectively. The Company recorded debt discount amortization expense of $9,704 and $8,143 during the three months ended November 30, 2015 and the year ended August 31, 2015, respectively.

On July 21, 2015, the Company issued a convertible note to JMJ Financial Group for $27,778 of cash consideration.  The note bears interest at 12%, matures on July 21, 2016, and is convertible into common stock at 50% of the lowest 3 closing market prices of the previous 20 trading days prior to conversion. The Company recorded a debt discount equal to $22,500 due to this conversion feature. The Company also recorded a $5,278 debt discount due to accrued interest required by the agreement to be accrued at the beginning of the note. The note had accrued interest of $1,205 and $374 as of November 30, 2015 and August 31, 2015, respectively.  The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.00005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. The debt discounts had a balance at November 30, 2015 and August 31, 2015 of $18,534 and $24,667, respectively. The Company recorded debt discount amortization expense of $6,133 and $3,111 during the three months ended November 30, 2015 and the year ended August 31, 2015, respectively.
 

 
14
On July 15, 2015, the Company issued a convertible note to LG Capital Funding LLC for $26,500 of cash consideration.  The note bears interest at 8%, matures on July 15, 2016, and is convertible into common stock at 50% of the lowest 3 closing market prices of the previous 20 trading days prior to conversion. The Company recorded a debt discount equal to $25,000 due to this conversion feature. The Company also recorded a $1,500 debt discount due to accrued interest required by the agreement to be accrued at the beginning of the note. The note had accrued interest of $802 and $273 as of November 30, 2015 and August 31, 2015, respectively.  The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.00005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. The debt discounts had a balance at November 30, 2015 and August 31, 2015 of $17,355 and $23,097, respectively. The Company recorded debt discount amortization expense of $5,743 and $3,403 during the three months ended November 30, 2015 and the year ended August 31, 2015, respectively.

On February 5, 2015, the Company issued a convertible note to Tangiers Capital Group for $55,000 of cash consideration.  The note bears interest at 10%, matures on February 5, 2016, and is convertible into common stock at 50% of the lowest 3 closing market prices of the previous 20 trading days prior to conversion. The Company recorded a debt discount equal to $22,000 due to this conversion feature. The Company also recorded a $5,000 debt discount due to accrued interest required by the agreement to be accrued at the beginning of the note. The note had accrued interest of $3,692 and $3,119 as of November 30, 2015 and August 31, 2015, respectively.  The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.00005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. The debt discounts had a balance at November 30, 2105 and August 31, 2015 of $5,747 and $7,656, respectively. The Company recorded debt discount amortization expense of $1,909 and $19,344 during the three months ended November 30, 2015 and the year ended August 31, 2015, respectively.

On August 26, 2015, Tangers Investment Group LLC converted $10,000 of its Note  into 904,977 shares of common stock.  In addition, during the year ended August 31, 2015, Tangiers converted an additional $22,000 of the note into a stock payable valued at the same $22,000 as the shares have not been issued as of either November 30, 2015 and August 31, 2015 period end. As the conversions were completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of these conversions.

NOTE 5 - RELATED PARTY TRANSACTIONS

Convertible Notes Payable – Related Party

US Affiliated

On July 31, 2014, the Company issued a convertible note to Hallmark Venture Group  inc. (a related party) for $18,003 of cash consideration. On September 31, 2014, Hallmark Venture Group Inc. sold the note to   U S Affiliated Inc. (an unrelated third party). The note bears interest at 6%, matures on July 31, 2015, and is convertible into common stock at 50% of the closing market price of the lowest 3 trading days during the previous 25 trading days prior to conversion. The Company recorded a debt discount equal to $18,003 due to this conversion feature. The note was amended during July 2015 to mature on November 30, 2015.  The note had accrued interest of $1,439 amd $1,170 as of November 30, 2015 and August 31, 2015, respectively.  The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.0005.  In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. The debt discount had a balance at November 30, 2015 and August 31, 2015was $0 and $0, respectively.

On July 31, 2014, the Company issued a convertible note to Hallmark Venture Group Inc. (a related party) for $14,315 of cash consideration. . On September 31, 2014, Hallmark Venture Group Inc. sold the note to U S Affiliated Inc. (an unrelated third party).  The note bears interest at 6%, matures on July 31, 2015, and is convertible into common stock at 50% of the closing market price of the lowest 3 trading days during the previous 25 trading days prior to conversion. The Company recorded a debt discount equal to $14,315 due to this conversion feature. The note was amended during July 2015 to mature on November 30, 2015.  The note had accrued interest of $1,144 and $930 as of November 30, 2015 and August 31, 2015, respectively.  The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.0005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. The debt discount had a balance at November 30, 2015 and August 31, 2015 of $0 and $0, respectively.
 
 
15

 
Promissory Note – Related Party

On August 25, 2011, the Company entered into a loan agreement with Hallmark Venture Group, Inc., with no maturity date or interest rate. During the year ended August 31, 2015, the Company repaid net funds of $27,158.  During the year ended August 31, 2015, the Company has imputed interest at a reasonable rate of 10 percent totaling $683.

Preferred Stock Issued for Services

On January 20, 2015, the Company authorized and issued 100,000 shares of Series A Preferred Stock to be granted to Hallmark Holdings  Inc. (a related party) in exchange for services. The 100,000 shares grant the holder to have the right to vote on all shareholder matters equal to 500 votes per share. The Series A shares were valued according to the additional voting rights assigned. The value assigned to the voting rights was derived from a model utilizing control premiums to value the voting control of the preferred stock. The value assigned to the Series A shares was $499,000 and was recorded on the grant date as stock based compensation.  

Lease Commitments
 
On September 1, 2015, Service Team Inc leased an industrial building located on three acres of land at 1818 E. Rosslynn Avenue, Fullerton, California.  The lease rate is $10,000 per month for the first six months; then $14,000 per month for the remaining six years of the lease.  Service Team Inc is obligated to pay the fire insurance and property taxes on the building that are estimated to be $2,000 per month.
Our principal executive offices are located in 600 square feet in a building at 18482 Park Villa Place, Villa Park, California 92861. The space is furnished by Hallmark Venture Group, Inc., a related party, at no charge.
 
NOTE 6 – INCOME TAXES
 
The Company accounts for income taxes under standards issued by the FASB. Under those standards, deferred tax assets and liabilities are recognized for future tax benefits or consequences attributable to temporary 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. A valuation allowance is provided for significant deferred tax assets when it is more likely than not that such assets will not be realized through future operations.
 
No provision for federal income taxes has been recorded due to the net operating loss carry forwards totaling approximately $522,523 as of November 30, 2015, that will be offset against future taxable income.  The available net operating loss carry forwards of approximately $522,523 will expire in various years through 2035. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the future tax loss carry forwards.
 
The actual income tax provisions differ from the expected amounts calculated by applying the statutory income tax rate to the Company's loss before income taxes.  The components of these differences are as follows at November 30, 2015 and August 31, 2015:
 
 
  
11/30/15
    
8/31/15
  
 Net tax loss carry-forwards
  
$
522,523
    
$
617,079
  
 Statutory rate    
    
34
%
    
34
%
 Expected tax recovery
    
177,658
      
209,807
  
 Change in valuation allowance
    
(177,658
)
    
(209,807
)
 Income tax provision
  
$
-
    
$
-
  
 
                
 Components of deferred tax asset:
                
 Non capital tax loss carry forwards 
  
$
177,658
    
$
209,807
  
 Less: valuation allowance   
    
(177,658
)
    
(209,807
)
 Net deferred tax asset 
  
$
-
    
$
-
  
 
 

 
16


NOTE 7 – COMMITMENTS AND CONTINGENCIES

Litigation
 
None.

Contingent Consideration
 
During the period from November 29, 2011 until June 1, 2012, the Company sold 541,000 shares to various individuals for a total cash consideration of $54,100.  The funds were used for operating capital of the Company including rent and payroll. Our rescission offer covers twenty-five shareholders (25) for a total of 541,000 shares originally sold for $54,100.  During the three month period ended November 30, 2015, as the rescission offer expired, the $54,100 was reversed from the liability resulting in a gain in other income and expense of $54,100 as the Company is no longer required to return funds to investors.  In addition, the Company has not been requested by any investor to repay funds from these stock sales during the period from November 29, 2011 through June 1, 2012.

Operating Leases
 

On September 1, 2015, Service Team Inc leased an industrial building located on three acres of land at 1818 E. Rosslynn Avenue, Fullerton, California.  The lease rate is $10,000 per month for the first six months; then $14,000 per month for the remaining six years of the lease.  Service Team Inc is obligated to pay the fire insurance and property taxes on the building that are estimated to be $2,000 per month.
Our principal executive offices are located in 600 square feet in a building at 18482 Park Villa Place, Villa Park, California 92861. The space is furnished by Hallmark Venture Group, Inc., a related party, at no charge. 

NOTE 8 – SEGMENT REPORTING
Our operations during the three month periods ending November 30, 2015 and 2014, were managed through two operating segments, as shown below. We disclose the results of each of our operating segments in accordance with ASC 280, Segment Reporting. Each of the operating segments was managed under a common structure chaired by our Chief Executive Officer and discrete financial information for both of the segments was available. Our Chief Executive Officer used the operating results of each of the two operating segments for performance evaluation and resource allocation and, as such, was the chief operating decision maker. The activities of each of our segments from which they earned revenues and incurred  expenses are described below: 
 
 
—
 
The Trade Leasing segment is involved in the manufacture and repair of truck bodies.
 
 
—
 
The Service Products segment specialized in electronics service, repair and sales.
 
Summarized financial information concerning reportable segments is shown in the following table for the three months ended: 
 
 
November 30, 2015: 
            
 
            
 
  
Trade Leasing
    
Service Products
    
Total
  
Revenues
  
$
925,103
    
$
-
    
$
925,103
  
 
                        
Cost of sales
    
639,641
      
-
      
639,641
  
 
                        
Gross margin
    
285,462
      
-
      
285,462
  
 
                        
Operating expenses
    
179,392
      
4,054
      
183,446
  
 
                        
Profit (loss) from operations
    
106,070
      
(4,054
)
    
102,016
  
 
                        
Other (expense) income
    
-
      
13,150
      
13,150
  
 
                        
Net income (loss)
  
$
106,070
    
$
9,096
    
$
115,166
  
 
                        

17


  

November 30, 2014: 
            
 
            
 
  
Trade Leasing
    
Service Products
    
Total
  
Revenues
  
$
553,627
    
$
-
    
$
553,627
  
 
                        
Cost of sales
    
513,383
      
-
      
513,383
  
 
                        
Gross margin
    
40,244
      
-
      
40,244
  
 
                        
Operating expenses
    
59,222
      
-
      
59,222
  
 
                        
Profit (loss) from operations
    
(18,978
)
    
-
      
(18,978
)
 
                        
Other (expense) income
    
-
      
(466
)
    
(466
)
 
                        
Net income (loss)
  
$
(18,978
)
  
$
(466
)
  
$
(19,444
)


NOTE 9 – SUBSEQUENT EVENTS
 
There were no subsequent events through the date that the financial statements were issued. 
 
18
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
 
Overview of Our Company
 
Service Team Inc. (the "Company") was incorporated pursuant to the laws of the State of Nevada on June 6, 2011.  The Company was organized to comply with the warranty obligations of electronic devices manufactured by companies outside of the United States.  The business proved to be unprofitable and the Company reduced its warranty and repair operations.  On June 5, 2013, Service Team Inc. acquired 25,000 common shares of Trade Leasing, Inc., granting 100% ownership, for 4,000,000 shares of its common stock; in addition, both entities are under common control.   Trade Leasing, Inc., a California corporation, was incorporated on November 1, 2011, and commenced business January 1, 2013.  Trade Leasing, Inc. is principally involved in the manufacturing, maintenance and repair of truck bodies.  Service Team Inc. and Trade Leasing Inc. have not been involved in a bankruptcy, receivership or any similar proceeding. The acquisition of Trade Leasing Inc. is a major change in the operations of the company. Trade Leasing is being operated as a separate division of Service Team Inc.
 
Trade Leasing Division.  This division is involved in the manufacture and repair of truck bodies.  The Company manufactures truck bodies that are attached to a truck chassis which consists of an engine, drive train, a frame with wheels, and in some cases, a cab.  The truck chassis is manufactured by third parties that are major automotive or truck companies.  These companies do not typically build specialized truck bodies.  The company is also involved in other products used by the trucking industry.   The company operates a complete manufacturing and repair facility in South Gate, California.  The facility manufactures both custom and standard production truck bodies in approximately 70 different models designed to fill the specialized demands of the user.   The vans are available for hauling dry freight or refrigerated freight.  The refrigerated vans are built with two to four inches of foam insulating that is sprayed in place for hauling refrigerated products such as meats, vegetables, flowers and similar products.  The Company installs different types of cooling systems in the trucks.  This varies from motor driven units installed outside the van body or refrigeration units driven off the engine of the truck.  Some refrigerated trucks use a system called "cold plate" where a large metal plate is cooled by power while the truck is parked.  The power is then unplugged and the truck will stay cool for many hours.  The Company's customers are auto dealers and users of trucks; such as dairies, food distributors and local delivery. The company has approximately 400 customers. One customer South Bay Ford represented more than 10% of sale in the last 12 months. The company is not dependent on a few major customers. Trade Leasing purchases raw materials from approximately 25 suppliers.  There are several hundred similar suppliers of comparable materials in the local area. Trade Leasing Inc. purchases refrigeration units from Thermoking Corporation a division of United Technologies and Carrier Corporation, a division of Ingersol Rand Corporation. The two companies represent more than 80% of the refrigeration unit market. There are several other manufactures of refrigeration units that represent a small part of the market. Trade Leasing Inc. employs 23 factory workers and three management personnel.  The management personnel make all of the sales and manage the factory. The company has all of the government licenses necessary to conduct its business. These include 9 different city, county and state licenses covering vehicle transportation, air quality, hazard waste (Paint), land or building use, and sales tax.
 
Liquidity and Capital Resources
 
As of November 30, 2015, we had assets of $301,429 including current assets of $227,447.   We have accounts payable of $121,390, convertible notes payable of $85,807, accrued expenses of $78,088.  Hallmark Venture Group, Inc. is prepared to advance us additional funds as needed. Accrued expenses are for work performed by employees during the organizational and operational stages of the Company. There is no firm date for which these are to be paid. It is to be repaid when we have funds available.  Since inception we have also raised $354,382 from the sale of our common stock.  We believe our ability to achieve commercial success and continued growth will be dependent upon our continued access to capital either through additional sale of our equity or cash generated from operations. We will seek to obtain additional working capital through the sale of our securities. We will attempt to obtain additional capital through bank lines of credit; however, we have no agreements or understandings with third parties at this time.
 
 
19
 
Results of Operations
 
Three Months Ended November 30, 2015 compared to the Three Months Ended November 30, 2014
 
Sales during the three month period ended November 30, 2015, were $925,103 compared to $553,627 for the three month period ending November 30, 2014.   Our cost of sales for the three month period ending November 30, 2015 was $639,641, compared to $513,383 for the three month period ending November 30, 2014. Our operating expenses for the three month period ending November 30, 2015, were $183,446; compared to $59,222 for the three month period ending November 30, 2014.  We had net income during the period ending November 30, 2015, of $102,016; compared to a net loss of $19,444 during the three month period ending November 30, 2014.
 
Item 3.  Quantitative and Qualitative Disclosures About Market Risk.
 
Not Applicable
 
Item 4.  Controls and Procedures.
 
Evaluation of Disclosure Controls and Procedures
 
We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a – 15(c) and 15d – 15(e)). Based upon that evaluation, our principal executive officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer, as appropriate to allow timely decisions regarding required disclosure.
  
Inherent Limitations of Internal Controls
 
Our Principal Executive Officer does not expect that our disclosure controls or internal controls will prevent all error and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
 
Changes in Internal Control over Financial Reporting
 
There were no changes in our internal control over financial reporting, other than those stated above, during our most recent quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
 
 
20
PART II—OTHER INFORMATION
  
Item 1.  Legal Proceedings.
 
None

Item 1A. Risk Factors.
 
Not applicable.
 
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.
 
None.
 
Item 3. Defaults Upon Senior Securities.
 
None.
 
Item 4.  Mine Safety Disclosures.
 
Not applicable.
    
Item 5. Other Information.
 
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain officers; Compensatory Arrangements of Certain Officers.
 
On April 13, 2015, Carlos Arreola resigned as chief executive officer and as director.  Mr. Arreola's resignation is not because of any disagreement with the registrant.  We have provided Mr. Arreola with a copy of this disclosure prior to the filing thereof and informed him that he had the opportunity to provide the registrant with correspondence stating whether he agrees or disagrees with the disclosure contained in this current report which the registrant would also file such correspondence as an exhibit to this current report or an amendment thereto.

Robert Cashman, remains as the sole director of the registrant and has assumed the role of chief executive officer in addition to that of chief financial officer.  There is no change to Mr. Cashman's compensation.
 
 
21
 
Item 6. Exhibits.
 
(a)  
The following exhibits are filed with this report.
 
31.1  Certification by Chief Executive Officer pursuant to Sarbanes Oxley Section 302.
 
31.2  Certification by Chief Financial Officer pursuant to Sarbanes Oxley Section 302.
 
32.l  Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350.
 
32.2  Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
 
101   Interactive Data Files
 
 
22

 
SIGNATURES
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
Service Team Inc.
 
 
 
 
 
Date  January 19, 2016
By:
/s/ Robert L. Cashman
 
 
 
Robert L. Cashman
 
 
 
Chief Executive Officer and President
Principal Executive Officer
 
 
 
 
 
 
 
 
 
 
 
 
Date  January 19, 2016
By:
/s/ Robert L. Cashman
 
 
 
Robert L. Cashman
 
 
 
Chief Financial Officer
Principal Financial and Accounting Officer
 
 
 
 
 
 
 
 
23


Exhibit 31.1
 
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
 
 
I,  Robert L. Cashman  certify that:
 
1. I have reviewed this report on Form 10-Q of Service Team Inc.;
 
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
 
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation: and
 
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
 
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
 
Date: January 19, 2016
 
 
/s/ Robert L. Cashman
By:  Robert L. Cashman,
Chief Executive Officer and President
Principal Executive Officer



Exhibit 31.2

I,  Robert L. Cashman certify that:
 
1. I have reviewed this report on Form 10-Q of Service Team Inc..;
 
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
 
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation: and
 
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
 
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
 
Date: January 19, 2016
 
 
/s/ Robert L. Cashman
By: Robert L. Cashman, 
Chief Financial Officer
Principal Financial and Accounting Officer

 


 
Exhibit 32.1
 
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
 
I, Rober L.Cashman, Chief Executive Officer, of Service Team Inc.,  a Nevada corporation (the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
 
(1) The report on Form 10-Q of Service Team Inc. (the "Registrant") for the fiscal quarter ended November 30, 2015 (the "Report") which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
(2) Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
 
Date: January 19, 2016
 
/s/ Robert L. Cashman
Name: Robert L. Cashman
Title:   Chief Executive Officer and President
Principal Executive Officer
 
 


        Exhibit 32.2
 
 
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 
I, Robert L. Cashman, Vice President, Secretary, Chief Financial Officer, of Service Team Inc.,  a Nevada corporation (the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
 
(1) The report on Form 10-Q of Service Team Inc. (the "Registrant") for the fiscal quarter ended November 30, 2015 (the "Report") which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
(2) Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
 
Date: January 19, 2016



/s/ Robert L. Cashman
Name: Robert L. Cashman
Title:   Chief Financial Officer
Principal Financial and Accounting Officer




v3.3.1.900
Document and Entity Information - USD ($)
 3 Months Ended
Nov. 30, 2015
Jan. 18, 2016
Document and Entity Information    
Entity Registrant Name Service Team Inc.  
Document Type 10-Q  
Document Period End Date Nov. 30, 2015  
Amendment Flag false  
Entity Central Index Key 0001535635  
Current Fiscal Year End Date --08-31  
Entity Common Stock, Shares Outstanding   13,430,624
Entity Filer Category Smaller Reporting Company  
Entity Current Reporting Status No  
Entity Voluntary Filers Yes  
Entity Well-known Seasoned Issuer No  
Document Fiscal Year Focus 2016  
Document Fiscal Period Focus Q1  
Entity Public Float   $ 0
Entity Preferred Stock, Shares Outstanding   100,000


v3.3.1.900
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)
Nov. 30, 2015
Aug. 31, 2015
ASSETS    
Cash $ 22,201 $ 5,843
Accounts receivable, net of allowances of $3,626 and $3,626, respectively 202,034 179,292
Deferred financing costs 3,212 11,986
Total current assets 227,447 197,121
Property and equipment, net 59,982 7,977
Prepaid expenses 14,000 9,000
TOTAL ASSETS 301,429 214,098
LIABILITIES & SHAREHOLDERS' (DEFICIT)    
Accounts payable 121,390 112,596
Convertible notes payable - related party, net 32,318 32,318
Convertible note payable, net $ 53,489 30,001
Contingent Liability 54,100
Accrued payroll costs $ 68,548 77,738
Accrued interest 9,540 6,367
Total current liabilities 285,285 313,120
TOTAL LIABILITIES 285,285 313,120
Common stock, $0.001 par value, 74,000,000 authorized, 13,430,624 and 13,430,624 issued and outstanding as of November 30, 2015 and August 31, 2015, respectively. 13,431 13,431
Preferred stock - Series A, $0.001 par value, 100,000 authorized, 100,000 and 100,000 issued and outstanding as of November 30, 2015 and August 31, 2015, respectively. 100 100
Additional paid in capital 1,612,788 1,612,788
Subscription payable 22,000 22,000
Accumulated deficit (1,632,175) (1,747,341)
TOTAL SHAREHOLDERS' (DEFICIT) 16,144 (99,022)
TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT) $ 301,429 $ 214,098


v3.3.1.900
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($)
Nov. 30, 2015
Aug. 31, 2015
Consolidated Balance Sheets    
Allowance for Accounts receivable $ 3,626 $ 3,626
Common Stock, par or stated value $ 0.001 $ 0.001
Common Stock, shares authorized 74,000,000 74,000,000
Common Stock, shares issued 13,430,624 13,430,624
Common Stock, shares outstanding 13,430,624 13,430,624
Preferred Stock, par or stated value $ 0.001 $ .001
Preferred Stock, shares authorized 100,000 100,000
Preferred Stock, shares issued 100,000 100,000
Preferred Stock, shares outstanding 100,000 100,000


v3.3.1.900
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) - USD ($)
 3 Months Ended
Nov. 30, 2015
Nov. 30, 2014
Revenues [Abstract]    
Sales $ 925,103 $ 553,627
Cost of sales 639,641 513,383
Gross Margin 285,462 40,244
Operating expenses:    
General & administrative expenses 182,218 58,725
Depreciation expense 1,228 497
Total Operating Expenses 183,446 59,222
Profit (loss) from operations 102,016 (18,978)
Other (expense) income:    
Interest Expense (40,950) $ (466)
Gain on contingent consideration 54,100
Total other (expense) income 13,150 $ (466)
Net income (loss) $ 115,166 $ (19,444)
Weighted average number of common shares outstanding - basic 13,430,624 12,512,021
Weighted average number of common shares outstanding - diluted 31,753,408 12,512,021
Net income (loss) per share - basic $ 0.01 $ 0
Net income (loss) per share - diluted $ 0 $ 0


v3.3.1.900
CONSOLIDATED STATEMENT OF SHAREHOLDERS' (DEFICIT) FOR THE YEAR (Unaudited) - USD ($)
Common Stock
Preferred Stock
Additional Paid-In Capital
Subscription Payable
Accumulated Deficit
Total
Beginning Balance at Aug. 31, 2014 $ 12,486 $ 995,650 $ (1,109,777) $ (101,641)
Beginning Balance (in shares) at Aug. 31, 2014 12,485,647          
Imputed Interest on Related Party Debt 683 683
Beneficial conversion feature 104,500 104,500
Shares issued for Service $ 100 498,900 499,000
Shares Issued for Service (in shares)   100,000        
Shares issued for Cash $ 40 3,960 4,000
Shares Issued for Cash (in shares) 40,000          
Shares Issued for Note Conversion $ 905 $ 9,095 10,000
Shares Issued for Note Conversion (in shares) 904,977          
Subscription Payable for Note Conversion $ 22,000 22,000
Net Income (Loss) $ (637,564) (637,564)
Ending Balance at Aug. 31, 2015 $ 13,431 $ 100 $ 1,612,788 $ 22,000 (1,747,341) (99,022)
Ending Balance (in shares) at Aug. 31, 2015 13,430,624 100,000        
Shares issued for Cash           $ 4,000
Shares Issued for Cash (in shares)           34,750
Net Income (Loss) 115,166 $ 115,166
Ending Balance at Nov. 30, 2015 $ 13,431 $ 100 $ 1,612,788 $ 22,000 $ (1,632,175) $ 16,144
Ending Balance (in shares) at Nov. 30, 2015 13,430,624 100,000        


v3.3.1.900
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)
 3 Months Ended
Nov. 30, 2015
Nov. 30, 2014
Cash flows from operating activities    
Net Income (Loss) $ 115,166 $ (19,444)
Adjustments to reconcile net income (loss) with cash provided by (used in) operations:    
Debt discount amortization 23,488
Gain on contingent consideration (54,100)
Deferred financing cost amortization 8,774
Depreciation $ 1,228 $ 497
Imputed interest 466
Change in operating assets and liabilities:    
Accounts receivable $ (22,742) (15,532)
Accrued expenses (6,017) $ (16,668)
Prepaid expenses (5,000)
Accounts payable 8,388 $ 77,796
Net Cash Provided by (Used in) Operating Activities. 69,185 27,115
Cash flows from investing activities    
Cash paid for the purchase of fixed assets (52,827) (98)
Net Cash Used In Investing Activities $ (52,827) (98)
Cash flows from financing activities    
Proceeds from sale of stock 4,000
Payments on loans with Related Party - Hallmark Venture Group, Inc. (17,000)
Net Cash Provided By (Used In) Financing Activities (13,000)
Net increase in cash and cash equivalents $ 16,358 14,017
Cash at Beginning of Period 5,843 7,457
Cash at End of Period $ 22,201 $ 21,474
Supplemental Disclosures    
Interest Paid
Taxes Paid


v3.3.1.900
ORGANIZATION
 3 Months Ended
Nov. 30, 2015
Organization  
ORGANIZATION

NOTE 1 - ORGANIZATION

 

Organization

 

Service Team Inc. (the "Company") was incorporated pursuant to the laws of the State of Nevada on June 6, 2011.  The Company was organized to comply with the warranty obligations of electronic devices manufactured by companies outside of the United States.  The business proved to be unprofitable and the Company reduced its warranty and repair operations.  On June 5, 2013, Service Team Inc. acquired Trade Leasing, Inc. for 4,000,000 shares of its common stock, a commonly held company.  Trade Leasing, Inc., a California corporation, was incorporated on November 1, 2011, and commenced business January 1, 2013.  Trade Leasing, Inc. is principally involved in the manufacturing, maintenance and repair of truck bodies.  

 

The Company has established a fiscal year end of August 31.


v3.3.1.900
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 3 Months Ended
Nov. 30, 2015
Summary Of Significant Accounting Policies  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The consolidated financial statements presented in this report are the combined financial reports of Trade Leasing, Inc. and Service Team Inc.

 

The Company maintains its accounting records on an accrual basis in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP).

 

The consolidated financial statements present the Balance Sheet, Statements of Operations, Shareholders' Deficit and Cash Flows of the Company. These consolidated financial statements are presented in United States dollars. The accompanying audited, consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q.  All adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations for the interim periods have been made and are of a recurring nature unless otherwise disclosed herein.

 

Principles of Consolidation

 

The accompanying consolidated financial statements include the accounts of Service Team Inc. and Trade Leasing, Inc. both of which are under common control and ownership. The consolidated financial statements herein contain the operations of the wholly-owned subsidiaries listed above. All significant inter-company transactions have been eliminated in the preparation of these financial statements.

 

Use of Estimates

 

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.  Actual results could differ from those estimates.

 

Going Concern

 

The Company's financial statements are prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America, and have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The Company has an accumulated deficit as of November 30, 2015, of $1,632,175. The Company will be dependent upon the raising of additional capital through placement of our common stock in order to implement its business plan. There can be no assurance that the Company will be successful in order to continue as a going concern. The Company is funding its initial operations by issuing common shares and debt. We cannot be certain that capital will be provided when it is required.

 

Cash and Equivalents

 

Cash and equivalents include investments with initial maturities of three months or less. The Company maintains its cash balances at credit-worthy financial institutions that are insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250,000. There were no cash equivalents at November 30, 2015, or August 31, 2015.

 

Concentration of Credit Risk

 

Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, are cash and cash equivalents. The Company places its cash and temporary cash investments with credit quality institutions. At times, such investments may be in excess of FDIC insurance limits.

 

Accounts Receivable

 

All accounts receivable are due thirty (30) days from the date billed. If the funds are not received within thirty (30) days the customer is contacted to arrange payment. The Company uses the allowance method to account for uncollectable accounts receivable. All accounts were considered collectable at period end and no allowance for bad debts was considered necessary.  The allowance for doubtful accounts as of November 30, 2015, and August 31, 2015 was $3,626 and $3,626 respectively.

 

Accounts Receivable and Revenue Concentrations

 

The Company's wholly owned subsidiary, Trade Leasing, Inc., has more than 400 customers. Three customers represented about 23%, 11% and 10% of total receivables as of November 30, 2015. One customer represented about 20% of total receivables as of August 31, 2015. During the three month period ended November 30, 2015, the Company had one customer that represented 19% of total sales.  During the three month period ended November 30, 2014, the Company had one customer that represented about 22% of total sales.

 

Inventory

 

The Company does not own inventory, materials are purchased as needed from local suppliers; therefore, there was no additional inventory on hand at November 30, 2015 or August 31, 2015.

 

Property and Equipment

 

Equipment, vehicles and furniture, which are recorded at cost, consist primarily of fabrication equipment and are depreciated using the straight-line method over the estimated useful lives of the related assets (generally 15 years or less). Costs incurred for maintenance and repairs are expensed as incurred and expenditures for major replacements and improvements are capitalized and depreciated over their estimated remaining useful lives. There was $1,228 and $497 of depreciation expense during the three months ended November 30, 2015 and 2014, respectively.

 

Net property and equipment were as follows at November 30, 2015 and August 31, 2015: 

 

   11/30/15  8/31/15
Equipment  $243,444   $243,444 
Vehicles   15,000    15,000 
Furniture   1,500    1,500 
Leasehold improvements   52,827    —   
Subtotal   312,771    259,944 
Less: accumulated depreciation   (252,789)   (251,967)
Total Fixed Assets, Net  $59,982   $7,977 

 

Lease Commitments

 

Service Team Inc., effective September 1, 2015, leased new facilities at 1818 Rosslynn Avenue, Fullerton, California, to manufacture its products. The Company has moved from 10633 Ruchti Road, South Gate, California, effective October 1, 2015. The new facility is leased for six and one half years at a price of $10,000 per month, for the first six months; and, $14,000 per month thereafter. Service Team Inc pays for the fire insurance and property taxes on the building estimated to be approximately $2,000 per month. The location consists of  three acres of land and one building of approximately 30,000 square feet.   The facility is approximately one-third larger than the prior facility in South Gate.

 

Our principal executive offices are located in 600 square feet in a building at 18482 Park Villa Place, Villa Park, California 92861. The space is furnished by Hallmark Venture Group, Inc., a related party, at no charge.

 

Beneficial Conversion Features

 

From time to time, the Company may issue convertible notes that may contain an imbedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method.

 

Fair Value of Financial Instruments

 

The Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820 on June 6, 2011. Under this FASB, fair value is defined 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 (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value.

 

The Company has various financial instruments that must be measured under the new fair value standard including: cash, convertible notes payable, accrued expenses, promissory notes payable, accounts receivable and accounts payable. The Company's financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows:   

 

Level 1 – Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.  The fair value of the Company's cash is based on quoted prices and therefore classified as Level 1.

 

Level 2 - Inputs include quoted prices for similar assets and 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, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

 

Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.

 

Cash, accounts receivable, accounts payable, promissory notes, convertible notes and accrued expenses reported on the balance sheet are estimated by management to approximate fair market value due to their short term nature.

 

The following table presents assets and liabilities that were measured and recognized at fair value as of November 30, 2015 on a recurring basis:

 

Description   Level 1    Level 2    Level 3    Total Realized Loss 
   $—     $—     $—     $—   
Total  $—     $—     $—     $—   

 

The following table presents assets and liabilities that were measured and recognized at fair value as of August 31, 2015 on a recurring basis:

 

Description   Level 1    Level 2    Level 3    Total Realized Loss 
   $—     $—     $—     $—   
Total  $—     $—     $—     $—   

 

Income Taxes

 

In assessing the realization of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on the level of historical operating results and the uncertainty of the economic conditions, the Company has recorded a full valuation allowance against its deferred tax assets at November 30, 2015 and August 31, 2015 where it cannot conclude that it is more likely than not that those assets will be realized.

 

Revenue Recognition

 

Trade Leasing Division

 

The Trade Leasing Division receives orders from customers to build or repair truck bodies. The company builds the requested product. At the completion of the product the truck is delivered to the customer.  If the customer accepts the product Trade Leasing Inc. issues an invoice to the customer for the job. The invoice is entered into our accounting system and is recognized as revenue at that time.

 

In the Trade Leasing Division we use the completed contract method for truck bodies built, which typically have construction periods of 15 days or less. Contracts are considered complete when title has passed, the customer has accepted the product and we do not retain risks or rewards of ownership of the truck bodies. Losses are accrued if manufacturing costs are expected to exceed manufacturing contract revenue.  Manufacturing expenses are primarily composed of aluminum cost, which is the largest component of our raw materials cost and the cost of labor.

 

Service Products Division

 

The Service Products Division shut down in fiscal 2013 repaired or replaced electrical appliances (mostly televisions), covered by warranties or insurance companies.  The Company had a price list of its services that sets forth a menu of charges for various repairs or replacements.  At the completion of the repair, an invoice was prepared itemizing the parts used and fixed labor rate costs billed by the Company.  The invoice was entered into our accounting system and recognized as revenue at that time. Our invoice was paid by the warranty insurance companies.  We did not take title to the product at any point during this process.

 

As described above, in accordance with the requirements of ASC 605-10-599, the Company recognized revenue when (1) persuasive evidence of an arrangement exists (contracts); (2) delivery has occurred; (3) the seller's price is fixed or determinable (per the customer's contract); and (4) collectability is reasonably assured (based upon our credit policy).

 

Share Based Expenses

 

The Company accounts for the issuance of equity instruments to acquire goods and/or services based on the fair value of the goods and services or the fair value of the equity instrument at the time of issuance, whichever is more readily determinable. The Company's accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of standards issued by the FASB. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor's performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement.

 

Stock Based Compensation

 

In December of 2004, the FASB issued a standard which applies to transactions in which an entity exchanges its equity instruments for goods or services and also applies to liabilities an entity may incur for goods or services that are based on the fair value of those equity instruments. For any unvested portion of previously issued and outstanding awards, compensation expense is required to be recorded based on the previously disclosed methodology and amounts. Prior periods presented are not required to be restated. We adopted the standard as of inception.  The Company has not issued any stock options to its Board of Directors and officers as compensation for their services.  If options are granted, they will be accounted for at a fair value as required by the FASB ASC 718.

 

Net Loss Per Share

 

The Company adopted the standard issued by the FASB, which requires presentation of basic earnings or loss per share and diluted earnings or loss per share. Basic income (loss) per share ("Basic EPS") is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share ("Diluted EPS") are similarly calculated using the treasury stock method except that the denominator is increased to reflect the potential dilution that would occur if dilutive securities at the end of the applicable period were exercised. During the three months ended November 30, 2015, the company reported additional dilutive shares of 18,322,784 due to the impact of convertible notes payable to both related parties and third parties outstanding during the period. During the three months ended November 30, 2014, because the Company does not have any potentially dilutive securities, the Diluted EPS equalled the Basic EPS.

 

Recent Accounting Pronouncements

 

In June 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-12, Compensation – Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. The new guidance requires that share-based compensation that require a specific performance target to be achieved in order for employees to become eligible to vest in the awards and that could be achieved after an employee completes the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation costs should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. This new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in this Update either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of ASU 2014-12 is not expected to have a material impact on our financial position or results of operations.

 

In June 2014, the FASB issued ASU No. 2014-10: Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation, to improve financial reporting by reducing the cost and complexity associated with the incremental reporting requirements of development stage entities. The amendments in this update remove all incremental financial reporting requirements from U.S. GAAP for development stage entities, thereby improving financial reporting by eliminating the cost and complexity associated with providing that information. The amendments in this Update also eliminate an exception provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. The amendments to eliminate that exception simplify U.S. GAAP by reducing avoidable complexity in existing accounting literature and improve the relevance of information provided to financial statement users by requiring the application of the same consolidation guidance by all reporting entities. The elimination of the exception may change the consolidation analysis, consolidation decision, and disclosure requirements for a reporting entity that has an interest in an entity in the development stage. The amendments related to the elimination of inception-to-date information and the other remaining disclosure requirements of Topic 915 should be applied retrospectively except for the clarification to Topic 275, which shall be applied prospectively. For public companies, those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early adoption is permitted. The adoption of ASU 2014-10 is not expected to have a material impact on our financial position or results of operations.


v3.3.1.900
CAPITAL STOCK
 3 Months Ended
Nov. 30, 2015
Capital Stock  
CAPITAL STOCK

NOTE 3 – CAPITAL STOCK

 

The Company's authorized capital is 74,000,000 common shares with a par value of $0.001 per share and 100,000 preferred shares with a par value of $0.001 per share.  

 

Three month period ended November 30, 2015

 

During the three months ended November 30, 2015, the Company issued no shares.

 

As of November 30, 2015 the Company has not granted any stock options.

Fiscal year ended August 31, 2015

 

On January 20, 2015, the Company authorized and issued 100,000 shares of Series A Preferred Stock to be granted to Hallmark Holdings Inc. (a related party) in exchange for services. The 100,000 shares grant the holder to have the right to vote on all shareholder matters equal to 500 votes per share. The Series A shares were valued according to the additional voting rights assigned. The value assigned to the voting rights was derived from a model utilizing control premiums to value the voting control of the preferred stock. The value assigned to the Series A shares was $499,000 and was recorded on the grant date as stock based compensation.  

 

On January 23, 2015, the Company filed a Certificate of Designation to establish the rights and benefits of Class A preferred stock.

 

During 2015, the company issued 40,000 shares in exchange for $4,000 from a third party investor.

 

On August 26, 2015, Tangers Investment Group LLC converted $10,000 of its Note in the amount of into 904,977 shares of common stock. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion.

 

During 2015, Tangers Investment Group LLC converted $22,000 of its Note into a stock payable. As the conversion was completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of this conversion.

 

During the twelve months ended August 31, 2015, $683 of interest expense was imputed from a promissory note with related party Hallmark Venture Group, Inc. based upon the average balance during the period at an interest rate of 10 percent.

 

As of August 31, 2015 the Company has not granted any stock options.  

 



v3.3.1.900
DEBT TRANSACTIONS
 3 Months Ended
Nov. 30, 2015
Debt Transactions  
DEBT TRANSACTIONS

NOTE 4 – DEBT TRANSACTIONS

 

Convertible Notes Payable – Related Party

 

US Affiliated

 

On July 31, 2014, the Company issued a convertible note to Hallmark Venture Group  inc. (a related party) for $18,003 of cash consideration. On September 31, 2014, Hallmark Venture Group Inc. sold the note to   U S Affiliated Inc. (an unrelated third party). The note bears interest at 6%, matures on July 31, 2015, and is convertible into common stock at 50% of the closing market price of the lowest 3 trading days during the previous 25 trading days prior to conversion. The Company recorded a debt discount equal to $18,003 due to this conversion feature. The note was amended during July 2015 to mature on November 30, 2015. The note had accrued interest of $1,439 and $1,170 as of November 30, 2015 and August 31, 2015, respectively. The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.0005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. The debt discount had a balance at November 30, 2015 and August 31, 2015was $0 and $0, respectively.

 

On July 31, 2014, the Company issued a convertible note to Hallmark Venture Group Inc. (a related party) for $14,315 of cash consideration. . On September 31, 2014, Hallmark Venture Group Inc. sold the note to U S Affiliated Inc. (an unrelated third party). The note bears interest at 6%, matures on July 31, 2015, and is convertible into common stock at 50% of the closing market price of the lowest 3 trading days during the previous 25 trading days prior to conversion. The Company recorded a debt discount equal to $14,315 due to this conversion feature. The note was amended during July 2015 to mature on November 30, 2015. The note had accrued interest of $1,144 and $930 as of November 30, 2015 and August 31, 2015, respectively. The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.0005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. The debt discount had a balance at November 30, 2015 and August 31, 2015 of $0 and $0, respectively.

 

Promissory Note – Related Party

 

On August 25, 2011, the Company entered into a loan agreement with Hallmark Venture Group, Inc., with no maturity date or interest rate. During the year ended August 31, 2015, the Company repaid net funds of $27,158. During the year ended August 31, 2015, the Company has imputed interest at a reasonable rate of 10 percent totaling $683.

 

Convertible Notes Payable – Third Party

 

On July 2, 2015, the Company issued a convertible note to Vis Veres Group for $38,000 of cash consideration. The note bears interest at 8%, matures on April 7, 2016, and is convertible into common stock at 55% of the lowest 3 closing market prices of the previous 20 trading days prior to conversion. The Company recorded a debt discount equal to $35,000 due to this conversion feature. The Company also recorded a $3,000 debt discount due to accrued interest required by the agreement to be accrued at the beginning of the note. The note had accrued interest of $1,258 and $500 as of November 30, 2015 and August 31, 2015, respectively. The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.00005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. The debt discounts had a balance at November 30, 2015 and August 31, 2015 of $20,154 and $29,857, respectively. The Company recorded debt discount amortization expense of $9,704 and $8,143 during the three months ended November 30, 2015 and the year ended August 31, 2015, respectively.

 

On July 21, 2015, the Company issued a convertible note to JMJ Financial Group for $27,778 of cash consideration. The note bears interest at 12%, matures on July 21, 2016, and is convertible into common stock at 50% of the lowest 3 closing market prices of the previous 20 trading days prior to conversion. The Company recorded a debt discount equal to $22,500 due to this conversion feature. The Company also recorded a $5,278 debt discount due to accrued interest required by the agreement to be accrued at the beginning of the note. The note had accrued interest of $1,205 and $374 as of November 30, 2015 and August 31, 2015, respectively. The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.00005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. The debt discounts had a balance at November 30, 2015 and August 31, 2015 of $18,534 and $24,667, respectively. The Company recorded debt discount amortization expense of $6,133 and $3,111 during the three months ended November 30, 2015 and the year ended August 31, 2015, respectively.

 

On July 15, 2015, the Company issued a convertible note to LG Capital Funding LLC for $26,500 of cash consideration. The note bears interest at 8%, matures on July 15, 2016, and is convertible into common stock at 50% of the lowest 3 closing market prices of the previous 20 trading days prior to conversion. The Company recorded a debt discount equal to $25,000 due to this conversion feature. The Company also recorded a $1,500 debt discount due to accrued interest required by the agreement to be accrued at the beginning of the note. The note had accrued interest of $802 and $273 as of November 30, 2015 and August 31, 2015, respectively. The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.00005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. The debt discounts had a balance at November 30, 2015 and August 31, 2015 of $17,355 and $23,097, respectively. The Company recorded debt discount amortization expense of $5,743 and $3,403 during the three months ended November 30, 2015 and the year ended August 31, 2015, respectively.

 

On February 5, 2015, the Company issued a convertible note to Tangiers Capital Group for $55,000 of cash consideration. The note bears interest at 10%, matures on February 5, 2016, and is convertible into common stock at 50% of the lowest 3 closing market prices of the previous 20 trading days prior to conversion. The Company recorded a debt discount equal to $22,000 due to this conversion feature. The Company also recorded a $5,000 debt discount due to accrued interest required by the agreement to be accrued at the beginning of the note. The note had accrued interest of $3,692 and $3,119 as of November 30, 2015 and August 31, 2015, respectively. The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.00005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. The debt discounts had a balance at November 30, 2105 and August 31, 2015 of $5,747 and $7,656, respectively. The Company recorded debt discount amortization expense of $1,909 and $19,344 during the three months ended November 30, 2015 and the year ended August 31, 2015, respectively.

 

On August 26, 2015, Tangers Investment Group LLC converted $10,000 of its Note  into 904,977 shares of common stock. In addition, during the year ended August 31, 2015, Tangiers converted an additional $22,000 of the note into a stock payable valued at the same $22,000 as the shares have not been issued as of either November 30, 2015 and August 31, 2015 period end. As the conversions were completed within the terms of the convertible note agreement, no gain or loss was recognized as a result of these conversions.


v3.3.1.900
RELATED PARTY TRANSACTIONS
 3 Months Ended
Nov. 30, 2015
Related Party Transactions  
RELATED PARTY TRANSACTIONS

NOTE 5 - RELATED PARTY TRANSACTIONS

 

Convertible Notes Payable – Related Party

 

US Affiliated

 

On July 31, 2014, the Company issued a convertible note to Hallmark Venture Group  inc. (a related party) for $18,003 of cash consideration. On September 31, 2014, Hallmark Venture Group Inc. sold the note to   U S Affiliated Inc. (an unrelated third party). The note bears interest at 6%, matures on July 31, 2015, and is convertible into common stock at 50% of the closing market price of the lowest 3 trading days during the previous 25 trading days prior to conversion. The Company recorded a debt discount equal to $18,003 due to this conversion feature. The note was amended during July 2015 to mature on November 30, 2015. The note had accrued interest of $1,439 amd $1,170 as of November 30, 2015 and August 31, 2015, respectively. The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.0005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. The debt discount had a balance at November 30, 2015 and August 31, 2015was $0 and $0, respectively.

 

On July 31, 2014, the Company issued a convertible note to Hallmark Venture Group Inc. (a related party) for $14,315 of cash consideration. . On September 31, 2014, Hallmark Venture Group Inc. sold the note to U S Affiliated Inc. (an unrelated third party). The note bears interest at 6%, matures on July 31, 2015, and is convertible into common stock at 50% of the closing market price of the lowest 3 trading days during the previous 25 trading days prior to conversion. The Company recorded a debt discount equal to $14,315 due to this conversion feature. The note was amended during July 2015 to mature on November 30, 2015. The note had accrued interest of $1,144 and $930 as of November 30, 2015 and August 31, 2015, respectively. The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.0005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur. The debt discount had a balance at November 30, 2015 and August 31, 2015 of $0 and $0, respectively.

 

Promissory Note – Related Party

 

On August 25, 2011, the Company entered into a loan agreement with Hallmark Venture Group, Inc., with no maturity date or interest rate. During the year ended August 31, 2015, the Company repaid net funds of $27,158. During the year ended August 31, 2015, the Company has imputed interest at a reasonable rate of 10 percent totaling $683.

 

Preferred Stock Issued for Services

 

On January 20, 2015, the Company authorized and issued 100,000 shares of Series A Preferred Stock to be granted to Hallmark Holdings  Inc. (a related party) in exchange for services. The 100,000 shares grant the holder to have the right to vote on all shareholder matters equal to 500 votes per share. The Series A shares were valued according to the additional voting rights assigned. The value assigned to the voting rights was derived from a model utilizing control premiums to value the voting control of the preferred stock. The value assigned to the Series A shares was $499,000 and was recorded on the grant date as stock based compensation.  

 

Lease Commitments

 

On September 1, 2015, Service Team Inc leased an industrial building located on three acres of land at 1818 E. Rosslynn Avenue, Fullerton, California. The lease rate is $10,000 per month for the first six months; then $14,000 per month for the remaining six years of the lease. Service Team Inc is obligated to pay the fire insurance and property taxes on the building that are estimated to be $2,000 per month.

 

Our principal executive offices are located in 600 square feet in a building at 18482 Park Villa Place, Villa Park, California 92861. The space is furnished by Hallmark Venture Group, Inc., a related party, at no charge.


v3.3.1.900
INCOME TAXES
 3 Months Ended
Nov. 30, 2015
Income Taxes  
INCOME TAXES

NOTE 6 – INCOME TAXES

 

The Company accounts for income taxes under standards issued by the FASB. Under those standards, deferred tax assets and liabilities are recognized for future tax benefits or consequences attributable to temporary 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. A valuation allowance is provided for significant deferred tax assets when it is more likely than not that such assets will not be realized through future operations.

 

No provision for federal income taxes has been recorded due to the net operating loss carry forwards totaling approximately $522,523 as of November 30, 2015, that will be offset against future taxable income.  The available net operating loss carry forwards of approximately $522,523 will expire in various years through 2035. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the future tax loss carry forwards.

 

The actual income tax provisions differ from the expected amounts calculated by applying the statutory income tax rate to the Company's loss before income taxes.  The components of these differences are as follows at November 30, 2015 and August 31, 2015:

 

   11/30/15  8/31/15
 Net tax loss carry-forwards  $522,523   $617,079 
 Statutory rate   34%   34%
 Expected tax recovery   177,658    209,807 
 Change in valuation allowance   (177,658)   (209,807)
 Income tax provision  $—     $—   
           
 Components of deferred tax asset:          
 Non capital tax loss carry forwards  $177,658   $209,807 
 Less: valuation allowance   (177,658)   (209,807)
 Net deferred tax asset  $—     $—   


v3.3.1.900
COMMITMENTS AND CONTINGENCIES
 3 Months Ended
Nov. 30, 2015
Commitments And Contingencies  
COMMITMENTS AND CONTINGENCIES

NOTE 7 – COMMITMENTS AND CONTINGENCIES

 

Litigation

 

None.

 

Contingent Consideration

 

During the period from November 29, 2011 until June 1, 2012, the Company sold 541,000 shares to various individuals for a total cash consideration of $54,100. The funds were used for operating capital of the Company including rent and payroll. Our rescission offer covers twenty-five shareholders (25) for a total of 541,000 shares originally sold for $54,100. During the three month period ended November 30, 2015, as the rescission offer expired, the $54,100 was reversed from the liability resulting in a gain in other income and expense of $54,100 as the Company is no longer required to return funds to investors. In addition, the Company has not been requested by any investor to repay funds from these stock sales during the period from November 29, 2011 through June 1, 2012.

 

Operating Leases

 

On September 1, 2015, Service Team Inc leased an industrial building located on three acres of land at 1818 E. Rosslynn Avenue, Fullerton, California. The lease rate is $10,000 per month for the first six months; then $14,000 per month for the remaining six years of the lease. Service Team Inc is obligated to pay the fire insurance and property taxes on the building that are estimated to be $2,000 per month.

 

Our principal executive offices are located in 600 square feet in a building at 18482 Park Villa Place, Villa Park, California 92861. The space is furnished by Hallmark Venture Group, Inc., a related party, at no charge.


v3.3.1.900
SEGMENT REPORTING
 3 Months Ended
Nov. 30, 2015
Segment Reporting  
Segment Reporting Disclosure

NOTE 8 – SEGMENT REPORTING

 

Our operations during the three month periods ending November 30, 2015 and 2014, were managed through two operating segments, as shown below. We disclose the results of each of our operating segments in accordance with ASC 280, Segment Reporting. Each of the operating segments was managed under a common structure chaired by our Chief Executive Officer and discrete financial information for both of the segments was available. Our Chief Executive Officer used the operating results of each of the two operating segments for performance evaluation and resource allocation and, as such, was the chief operating decision maker. The activities of each of our segments from which they earned revenues and incurred  expenses are described below: 

 

• The Trade Leasing segment is involved in the manufacture and repair of truck bodies.

 

• The Service Products segment specialized in electronics service, repair and sales.

 

Summarized financial information concerning reportable segments is shown in the following table for the three months ended: 

 

 

November 30, 2015: 

         
          
    Trade Leasing    Service Products    Total 
Revenues  $925,103   $—     $925,103 
                
Cost of sales   639,641    —      639,641 
                
Gross margin   285,462    —      285,462 
                
Operating expenses   179,392    4,054    183,446 
                
Profit (loss) from operations   106,070    (4,054)   102,016 
                
Other (expense) income   —      13,150    13,150 
                
Net income (loss)  $106,070   $9,096   $115,166 
                

 

November 30, 2014:         
          
   Trade Leasing  Service Products  Total
Revenues  $553,627   $—     $553,627 
                
Cost of sales   513,383    —      513,383 
                
Gross margin   40,244    —      40,244 
                
Operating expenses   59,222    —      59,222 
                
Profit (loss) from operations   (18,978)   —      (18,978)
                
Other (expense) income   —      (466)   (466)
                
Net income (loss)  $(18,978)  $(466)  $(19,444)


v3.3.1.900
SUBSEQUENT EVENTS
 3 Months Ended
Nov. 30, 2015
Subsequent Events  
SUBSEQUENT EVENTS

NOTE 9 – SUBSEQUENT EVENTS

 

There were no subsequent events through the date that the financial statements were issued.



v3.3.1.900
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
 3 Months Ended
Nov. 30, 2015
Summary Of Significant Accounting Policies Policies  
Basis of Presentation

Basis of Presentation

 

The consolidated financial statements presented in this report are the combined financial reports of Trade Leasing, Inc. and Service Team Inc.

 

The Company maintains its accounting records on an accrual basis in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP).

 

The consolidated financial statements present the Balance Sheet, Statements of Operations, Shareholders' Deficit and Cash Flows of the Company. These consolidated financial statements are presented in United States dollars. The accompanying audited, consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q.  All adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations for the interim periods have been made and are of a recurring nature unless otherwise disclosed herein.
Principles of Consolidation

Principles of Consolidation

 

The accompanying consolidated financial statements include the accounts of Service Team Inc. and Trade Leasing, Inc. both of which are under common control and ownership. The consolidated financial statements herein contain the operations of the wholly-owned subsidiaries listed above. All significant inter-company transactions have been eliminated in the preparation of these financial statements.
Use of Estimates

Use of Estimates

 

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Going Concern

Going Concern

 

The Company's financial statements are prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America, and have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The Company has an accumulated deficit as of November 30, 2015, of $1,632,175. The Company will be dependent upon the raising of additional capital through placement of our common stock in order to implement its business plan. There can be no assurance that the Company will be successful in order to continue as a going concern. The Company is funding its initial operations by issuing common shares and debt. We cannot be certain that capital will be provided when it is required.
Cash and Equivalents

Cash and Equivalents

 

Cash and equivalents include investments with initial maturities of three months or less. The Company maintains its cash balances at credit-worthy financial institutions that are insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250,000. There were no cash equivalents at November 30, 2015, or August 31, 2015.
Concentration of Credit Risk

Concentration of Credit Risk

 

Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, are cash and cash equivalents. The Company places its cash and temporary cash investments with credit quality institutions. At times, such investments may be in excess of FDIC insurance limits.
Accounts Receivable Policy

Accounts Receivable

 

All accounts receivable are due thirty (30) days from the date billed. If the funds are not received within thirty (30) days the customer is contacted to arrange payment. The Company uses the allowance method to account for uncollectable accounts receivable. All accounts were considered collectable at period end and no allowance for bad debts was considered necessary.  The allowance for doubtful accounts as of November 30, 2015, and August 31, 2015 was $3,626 and $3,626 respectively.
Accounts Receivable and Revenue Concentrations

Accounts Receivable and Revenue Concentrations

 

The Company's wholly owned subsidiary, Trade Leasing, Inc., has more than 400 customers. Three customers represented about 23%, 11% and 10% of total receivables as of November 30, 2015. One customer represented about 20% of total receivables as of August 31, 2015. During the three month period ended November 30, 2015, the Company had one customer that represented 19% of total sales.  During the three month period ended November 30, 2014, the Company had one customer that represented about 22% of total sales.
Inventory

Inventory

 

The Company does not own inventory, materials are purchased as needed from local suppliers; therefore, there was no additional inventory on hand at November 30, 2015 or August 31, 2015.
Property and Equipment

Property and Equipment

 

Equipment, vehicles and furniture, which are recorded at cost, consist primarily of fabrication equipment and are depreciated using the straight-line method over the estimated useful lives of the related assets (generally 15 years or less). Costs incurred for maintenance and repairs are expensed as incurred and expenditures for major replacements and improvements are capitalized and depreciated over their estimated remaining useful lives. There was $1,228 and $497 of depreciation expense during the three months ended November 30, 2015 and 2014, respectively.

 

Net property and equipment were as follows at November 30, 2015 and August 31, 2015: 

 

   11/30/15  8/31/15
Equipment  $243,444   $243,444 
Vehicles   15,000    15,000 
Furniture   1,500    1,500 
Leasehold improvements   52,827    —   
Subtotal   312,771    259,944 
Less: accumulated depreciation   (252,789)   (251,967)
Total Fixed Assets, Net  $59,982   $7,977 
Lease Commitments

Lease Commitments

 

Service Team Inc., effective September 1, 2015, leased new facilities at 1818 Rosslynn Avenue, Fullerton, California, to manufacture its products. The Company has moved from 10633 Ruchti Road, South Gate, California, effective October 1, 2015. The new facility is leased for six and one half years at a price of $10,000 per month, for the first six months; and, $14,000 per month thereafter. Service Team Inc pays for the fire insurance and property taxes on the building estimated to be approximately $2,000 per month. The location consists of  three acres of land and one building of approximately 30,000 square feet.   The facility is approximately one-third larger than the prior facility in South Gate.

 

Our principal executive offices are located in 600 square feet in a building at 18482 Park Villa Place, Villa Park, California 92861. The space is furnished by Hallmark Venture Group, Inc., a related party, at no charge.
Beneficial Conversion Features

Beneficial Conversion Features

 

From time to time, the Company may issue convertible notes that may contain an imbedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method.
Fair Value of Financial Instruments

Fair Value of Financial Instruments

 

The Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820 on June 6, 2011. Under this FASB, fair value is defined 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 (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value.

 

The Company has various financial instruments that must be measured under the new fair value standard including: cash, convertible notes payable, accrued expenses, promissory notes payable, accounts receivable and accounts payable. The Company's financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows:   

 

Level 1 – Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.  The fair value of the Company's cash is based on quoted prices and therefore classified as Level 1.

 

Level 2 - Inputs include quoted prices for similar assets and 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, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

 

Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.

 

Cash, accounts receivable, accounts payable, promissory notes, convertible notes and accrued expenses reported on the balance sheet are estimated by management to approximate fair market value due to their short term nature.

 

The following table presents assets and liabilities that were measured and recognized at fair value as of November 30, 2015 on a recurring basis:

 

Description   Level 1    Level 2    Level 3    Total Realized Loss 
   $—     $—     $—     $—   
Total  $—     $—     $—     $—   

 

The following table presents assets and liabilities that were measured and recognized at fair value as of August 31, 2015 on a recurring basis:

 

Description   Level 1    Level 2    Level 3    Total Realized Loss 
   $—     $—     $—     $—   
Total  $—     $—     $—     $—   
Income Taxes

Income Taxes

 

In assessing the realization of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on the level of historical operating results and the uncertainty of the economic conditions, the Company has recorded a full valuation allowance against its deferred tax assets at November 30, 2015 and August 31, 2015 where it cannot conclude that it is more likely than not that those assets will be realized.
Revenue Recognition

Revenue Recognition

 

Trade Leasing Division

 

The Trade Leasing Division receives orders from customers to build or repair truck bodies. The company builds the requested product. At the completion of the product the truck is delivered to the customer.  If the customer accepts the product Trade Leasing Inc. issues an invoice to the customer for the job. The invoice is entered into our accounting system and is recognized as revenue at that time.

 

In the Trade Leasing Division we use the completed contract method for truck bodies built, which typically have construction periods of 15 days or less. Contracts are considered complete when title has passed, the customer has accepted the product and we do not retain risks or rewards of ownership of the truck bodies. Losses are accrued if manufacturing costs are expected to exceed manufacturing contract revenue.  Manufacturing expenses are primarily composed of aluminum cost, which is the largest component of our raw materials cost and the cost of labor.

 

Service Products Division

 

The Service Products Division shut down in fiscal 2013 repaired or replaced electrical appliances (mostly televisions), covered by warranties or insurance companies.  The Company had a price list of its services that sets forth a menu of charges for various repairs or replacements.  At the completion of the repair, an invoice was prepared itemizing the parts used and fixed labor rate costs billed by the Company.  The invoice was entered into our accounting system and recognized as revenue at that time. Our invoice was paid by the warranty insurance companies.  We did not take title to the product at any point during this process.

 

As described above, in accordance with the requirements of ASC 605-10-599, the Company recognized revenue when (1) persuasive evidence of an arrangement exists (contracts); (2) delivery has occurred; (3) the seller's price is fixed or determinable (per the customer's contract); and (4) collectability is reasonably assured (based upon our credit policy).
Share Based Expenses

Share Based Expenses

 

The Company accounts for the issuance of equity instruments to acquire goods and/or services based on the fair value of the goods and services or the fair value of the equity instrument at the time of issuance, whichever is more readily determinable. The Company's accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of standards issued by the FASB. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor's performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement.
Stock Based Compensation

Stock Based Compensation

 

In December of 2004, the FASB issued a standard which applies to transactions in which an entity exchanges its equity instruments for goods or services and also applies to liabilities an entity may incur for goods or services that are based on the fair value of those equity instruments. For any unvested portion of previously issued and outstanding awards, compensation expense is required to be recorded based on the previously disclosed methodology and amounts. Prior periods presented are not required to be restated. We adopted the standard as of inception.  The Company has not issued any stock options to its Board of Directors and officers as compensation for their services.  If options are granted, they will be accounted for at a fair value as required by the FASB ASC 718.
Net Loss Per Share

Net Loss Per Share

 

The Company adopted the standard issued by the FASB, which requires presentation of basic earnings or loss per share and diluted earnings or loss per share. Basic income (loss) per share ("Basic EPS") is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share ("Diluted EPS") are similarly calculated using the treasury stock method except that the denominator is increased to reflect the potential dilution that would occur if dilutive securities at the end of the applicable period were exercised. During the three months ended November 30, 2015, the company reported additional dilutive shares of 18,322,784 due to the impact of convertible notes payable to both related parties and third parties outstanding during the period. During the three months ended November 30, 2014, because the Company does not have any potentially dilutive securities, the Diluted EPS equalled the Basic EPS.
Recent Accounting Pronouncements

Recent Accounting Pronouncements

 

In June 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-12, Compensation – Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. The new guidance requires that share-based compensation that require a specific performance target to be achieved in order for employees to become eligible to vest in the awards and that could be achieved after an employee completes the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation costs should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. This new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in this Update either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of ASU 2014-12 is not expected to have a material impact on our financial position or results of operations.

 

In June 2014, the FASB issued ASU No. 2014-10: Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation, to improve financial reporting by reducing the cost and complexity associated with the incremental reporting requirements of development stage entities. The amendments in this update remove all incremental financial reporting requirements from U.S. GAAP for development stage entities, thereby improving financial reporting by eliminating the cost and complexity associated with providing that information. The amendments in this Update also eliminate an exception provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. The amendments to eliminate that exception simplify U.S. GAAP by reducing avoidable complexity in existing accounting literature and improve the relevance of information provided to financial statement users by requiring the application of the same consolidation guidance by all reporting entities. The elimination of the exception may change the consolidation analysis, consolidation decision, and disclosure requirements for a reporting entity that has an interest in an entity in the development stage. The amendments related to the elimination of inception-to-date information and the other remaining disclosure requirements of Topic 915 should be applied retrospectively except for the clarification to Topic 275, which shall be applied prospectively. For public companies, those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early adoption is permitted. The adoption of ASU 2014-10 is not expected to have a material impact on our financial position or results of operations.


v3.3.1.900
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
 3 Months Ended
Nov. 30, 2015
Summary Of Significant Accounting Policies Tables  
Schedule of Property and Equipment
   11/30/15  8/31/15
Equipment  $243,444   $243,444 
Vehicles   15,000    15,000 
Furniture   1,500    1,500 
Leasehold improvements   52,827    —   
Subtotal   312,771    259,944 
Less: accumulated depreciation   (252,789)   (251,967)
Total Fixed Assets, Net  $59,982   $7,977 
Schedule of Fair Value of Assets and Liabilities measured and recognized on a recurring basis

The following table presents assets and liabilities that were measured and recognized at fair value as of November 30, 2015 on a recurring basis:

 

Description   Level 1    Level 2    Level 3    Total Realized Loss 
   $—     $—     $—     $—   
Total  $—     $—     $—     $—   

 

The following table presents assets and liabilities that were measured and recognized at fair value as of August 31, 2015 on a recurring basis:

 

Description   Level 1    Level 2    Level 3    Total Realized Loss 
   $—     $—     $—     $—   
Total  $—     $—     $—     $—   


v3.3.1.900
INCOME TAXES (Tables)
 3 Months Ended
Nov. 30, 2015
Income Taxes Tables  
Schedule of Income Tax Expenses
   11/30/15  8/31/15
 Net tax loss carry-forwards  $522,523   $617,079 
 Statutory rate   34%   34%
 Expected tax recovery   177,658    209,807 
 Change in valuation allowance   (177,658)   (209,807)
 Income tax provision  $—     $—   
           
 Components of deferred tax asset:          
 Non capital tax loss carry forwards  $177,658   $209,807 
 Less: valuation allowance   (177,658)   (209,807)
 Net deferred tax asset  $—     $—   


v3.3.1.900
SEGMENT REPORTING (Tables)
 3 Months Ended
Nov. 30, 2015
Segment Reporting Tables  
Schedule of Reportable Segments

Summarized financial information concerning reportable segments is shown in the following table for the three months ended: 

 

 

November 30, 2015: 

         
          
    Trade Leasing    Service Products    Total 
Revenues  $925,103   $—     $925,103 
                
Cost of sales   639,641    —      639,641 
                
Gross margin   285,462    —      285,462 
                
Operating expenses   179,392    4,054    183,446 
                
Profit (loss) from operations   106,070    (4,054)   102,016 
                
Other (expense) income   —      13,150    13,150 
                
Net income (loss)  $106,070   $9,096   $115,166 
                

 

November 30, 2014:         
          
   Trade Leasing  Service Products  Total
Revenues  $553,627   $—     $553,627 
                
Cost of sales   513,383    —      513,383 
                
Gross margin   40,244    —      40,244 
                
Operating expenses   59,222    —      59,222 
                
Profit (loss) from operations   (18,978)   —      (18,978)
                
Other (expense) income   —      (466)   (466)
                
Net income (loss)  $(18,978)  $(466)  $(19,444)


v3.3.1.900
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)
Nov. 30, 2015
Aug. 31, 2015
Summary Of Significant Accounting Policies Details Narrative    
Allowance for Accounts receivable $ 3,626 $ 3,626


v3.3.1.900
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)
 3 Months Ended
Nov. 30, 2015
Nov. 30, 2014
Aug. 31, 2015
Property and Equipment $ 312,771   $ 259,944
Less: accumulated depreciation (252,789)   (251,967)
Total fixed assets, net 59,982   7,977
Depreciation Expense 1,228 $ 497  
Equipment [Member]      
Property and Equipment 243,444   243,444
Vehicles [Member]      
Property and Equipment 15,000   15,000
Furniture [Member]      
Property and Equipment 1,500   $ 1,500
Leasehold Improvements [Member]      
Property and Equipment $ 52,827  


v3.3.1.900
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - Fair Value, Measurements, Recurring [Member] - USD ($)
Nov. 30, 2015
Aug. 31, 2015
Fair vale of Assets and Liabilities
Level 1 [Member]    
Fair vale of Assets and Liabilities
Fair Value, Inputs, Level 2 [Member]    
Fair vale of Assets and Liabilities
Fair Value, Inputs, Level 3 [Member]    
Fair vale of Assets and Liabilities


v3.3.1.900
CAPITAL STOCK (Details) - USD ($)
 3 Months Ended 6 Months Ended 12 Months Ended
Nov. 30, 2015
Nov. 30, 2014
May. 31, 2014
Feb. 28, 2014
Aug. 31, 2015
Capital Stock Details          
Common Stock, par or stated value $ 0.001       $ 0.001
Common Stock, shares authorized 74,000,000       74,000,000
Preferred Stock, shares authorized 100,000       100,000
Preferred Stock, par or stated value $ 0.001       $ .001
Shares issued for cash to investor $ 4,000 $ 34,750 $ 9,750 $ 25,000 $ 4,000
Shares issued for cash to investor (in shares) 34,750 171,576 55,000 63,333  
Imputed interest $ 466      


v3.3.1.900
INCOME TAXES (Details) - USD ($)
 3 Months Ended
Nov. 30, 2015
Nov. 30, 2014
Aug. 31, 2015
Income Taxes Details      
Net tax loss carry-forwards $ 548,338   $ 617,079
Statutory rate 34.00% 34.00%  
Expected tax recovery $ 177,658 $ 209,807  
Change in valuation allowance (177,658) (209,807)  
Income tax provision $ 0 $ 0  


v3.3.1.900
INCOME TAXES (Details 2) - USD ($)
Nov. 30, 2015
Aug. 31, 2015
Income Taxes Details 2    
Non capital tax loss carry forwards $ 177,658 $ 209,807
Less: valuation allowance $ (177,658) $ (209,807)
Net deferred tax asset


v3.3.1.900
SEGMENT REPORTING (Details) - USD ($)
 3 Months Ended 12 Months Ended
Nov. 30, 2015
Nov. 30, 2014
Aug. 31, 2015
Revenues $ 925,103 $ 553,627  
Cost of sales 639,641 513,383  
Gross Margin 285,462 40,244  
Total Operating Expenses 183,446 59,222  
OPERATING INCOME (LOSS) 102,016 (18,978)  
TOTAL OTHER INCOME (EXPENSE) (13,150) 466  
NET INCOME (LOSS) 115,166 (19,444) $ (637,564)
Trade Leasing      
Revenues 925,103 553,627  
Cost of sales 639,641 513,383  
Gross Margin 285,462 40,244  
Total Operating Expenses 179,392 59,222  
OPERATING INCOME (LOSS) $ 106,070 $ (18,978)  
TOTAL OTHER INCOME (EXPENSE)  
NET INCOME (LOSS) $ 106,070 $ (18,978)  
Service Products      
Revenues  
Cost of sales  
Gross Margin  
Total Operating Expenses $ 4,054  
OPERATING INCOME (LOSS) (4,054)  
TOTAL OTHER INCOME (EXPENSE) 13,150 $ (466)  
NET INCOME (LOSS) 9,096 (466)  
Segment Total      
Revenues 925,103 553,627  
Cost of sales 639,641 513,383  
Gross Margin 285,462 40,244  
Total Operating Expenses 183,446 59,222  
OPERATING INCOME (LOSS) 102,016 (18,978)  
TOTAL OTHER INCOME (EXPENSE) 13,150 (466)  
NET INCOME (LOSS) $ 115,166 $ (19,444)  
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