Delaware | 20-4456503 | |
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
Large accelerated filer | o | Accelerated filer | o |
Non-accelerated filer | o | Smaller reporting company | x |
Page | ||||
CONSOLIDATED FINANCIAL STATEMENTS
|
||||
Consolidated balance sheets | 4 | |||
Consolidated statements of operation | 5 | |||
Consolidated statements of cash flows | 6 | |||
Notes to consolidated financial statements | 7 |
June 30,
|
September 30,
|
|||||||
2013
|
2012
|
|||||||
Assets
|
||||||||
Current Assets:
|
||||||||
Cash
|
$ | 1,677,520 | 1,041,786 | |||||
Accounts receivable, less allowance for doubtful
|
||||||||
accounts of $12,000 and $12,000, respectively
|
272,251 | 195,493 | ||||||
Prepaid expenses
|
19,689 | 26,334 | ||||||
Other receivables
|
92,056 | 103,013 | ||||||
Total Current Assets
|
2,061,516 | 1,366,626 | ||||||
Property and equipment, net of accumulated depreciation
|
||||||||
of $51,814 and $29,805, respectively
|
287,504 | 283,522 | ||||||
Intangible Assets
|
93,050 | 25,250 | ||||||
Deposits
|
14,619 | 32,619 | ||||||
Total Assets
|
$ | 2,456,689 | 1,708,017 | |||||
Liabilities and Stockholders’ Equity
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable:
|
||||||||
Related parties
|
$ | 14,988 | 16,771 | |||||
Other
|
165,078 | 163,171 | ||||||
Payroll accruals
|
12,400 | 11,878 | ||||||
Accrued marketing fund
|
123,911 | 90,155 | ||||||
Customer deposits
|
62,500 | 47,500 | ||||||
Notes Payable:
|
||||||||
Related parties
|
20,000 | 40,000 | ||||||
Other
|
— | 3,500 | ||||||
Total Current Liabilities
|
398,877 | 372,975 | ||||||
Stockholders’ Equity:
|
||||||||
Preferred stock, $.0001 par value; 10,000,000 shares authorized;
|
||||||||
-0- and -0- shares issued and outstanding, respectively
|
— | — | ||||||
Common stock, $.0001 par value; 50,000,000 shares authorized;
|
||||||||
11,794,409 and 11,556,075 shares issued and outstanding, respectively
|
1,179 | 1,155 | ||||||
Additional paid-in capital
|
2,077,895 | 2,006,118 | ||||||
Retained earnings (Deficit
|
(21,262 | ) | (672,231 | ) | ||||
Total Stockholders’ Equity
|
2,057,812 | 1,335,042 | ||||||
Total Liabilities and Stockholders’ Equity
|
$ | 2,456,689 | 1,708,017 |
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
For The Three
|
For The Nine
|
|||||||||||||||
Months Ended
|
Months Ended
|
|||||||||||||||
June 30
|
June 30
|
June 30
|
June 30
|
|||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Revenues:
|
||||||||||||||||
Initial franchise fees
|
$ | 1,280,871 | $ | 665,317 | $ | 2,731,471 | $ | 1,871,339 | ||||||||
Royalties and marketing fees
|
279,176 | 98,496 | 658,453 | 193,570 | ||||||||||||
Corporate Creativity Center Sales
|
26,006 | 32,315 | 86,559 | 108,904 | ||||||||||||
1,586,053 | 796,128 | 3,476,483 | 2,173,813 | |||||||||||||
Operating expenses:
|
||||||||||||||||
Franchise consulting and commissions:
|
||||||||||||||||
Related parties
|
144,689 | 93,113 | 389,961 | 255,770 | ||||||||||||
Other
|
370,971 | 197,996 | 902,463 | 539,667 | ||||||||||||
Franchise training and expenses:
|
||||||||||||||||
Related parties
|
— | 1,501 | — | 12,400 | ||||||||||||
Other
|
82,963 | 18,615 | 202,768 | 49,179 | ||||||||||||
Salaries and payroll taxes
|
136,610 | 102,039 | 405,081 | 283,761 | ||||||||||||
Advertising
|
132,356 | 82,405 | 326,981 | 188,789 | ||||||||||||
Professional fees
|
20,707 | 24,237 | 86,020 | 150,638 | ||||||||||||
Office expense
|
27,649 | 28,985 | 115,341 | 74,772 | ||||||||||||
Depreciation
|
8,749 | 4,567 | 22,008 | 12,297 | ||||||||||||
Stock-based compensation
|
— | — | — | 8,800 | ||||||||||||
Other general and administrative expenses
|
95,836 | 110,456 | 351,824 | 233,228 | ||||||||||||
Total operating expenses
|
1,020,530 | 663,914 | 2,802,447 | 1,809,301 | ||||||||||||
Income from operations
|
565,523 | 132,214 | 674,036 | 364,512 | ||||||||||||
Other income (expense):
|
||||||||||||||||
Interest (expense)
|
— | — | (1,995 | ) | — | |||||||||||
Other income (expense)
|
(460 | ) | 963 | (21,072 | ) | 1,952 | ||||||||||
Total other income (expense)
|
(460 | ) | 963 | (23,067 | ) | 1,952 | ||||||||||
Income before provision for income taxes
|
565,063 | 133,177 | 650,969 | 366,464 | ||||||||||||
Provision for income taxes (Note 1)
|
— | — | — | — | ||||||||||||
Net Income
|
$ | 565,063 | $ | 133,177 | $ | 650,969 | $ | 366,464 | ||||||||
Net Income per share
|
||||||||||||||||
Basic and diluted
|
$ | 0.05 | $ | 0.01 | $ | 0.06 | $ | 0.03 | ||||||||
Weighted average number of common shares outstanding
|
11,611,770 | 11,414,186 | 11,611,770 | 11,414,186 |
Nine Months Ended
|
||||||||
June 30,
|
June 30,
|
|||||||
2013
|
2012
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$ | 650,969 | $ | 366,464 | ||||
Adjustments to reconcile net loss to net cash
|
||||||||
provided by operating activities:
|
||||||||
Depreciation
|
22,008 | 12,297 | ||||||
Compensatory equity issuances
|
71,800 | 8,800 | ||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(76,757 | ) | (170,264 | ) | ||||
Accounts payable
|
124 | 13,952 | ||||||
Accrued liabilities
|
523 | 55,021 | ||||||
Accrued marketing funds
|
33,756 | — | ||||||
Customer deposits
|
15,000 | — | ||||||
Deposits
|
18,000 | — | ||||||
Other receivables
|
10,957 | (45,500 | ) | |||||
Prepaid Expenses
|
6,645 | (23,407 | ) | |||||
Net cash provided by operating activities
|
753,025 | 217,363 | ||||||
Cash flows from investing activities:
|
||||||||
Property and equipment purchases
|
(25,991 | ) | (112,209 | ) | ||||
Intangible asset purchases
|
(67,800 | ) | ||||||
Repayment of Loan
|
— | (1,806 | ) | |||||
Net cash used in investing activities
|
(93,791 | ) | (114,015 | ) | ||||
Cash flows from financing activities:
|
||||||||
Notes Payable
|
(23,500 | ) | — | |||||
Proceeds from sale of common stock
|
— | — | ||||||
Net cash provided by financing activities
|
(23,500 | ) | — | |||||
Net change in cash | 635,734 | 103,348 | ||||||
Cash, beginning of period
|
1,041,786 | 517,830 | ||||||
Cash, end of period
|
$ | 1,677,520 | 621,178 | |||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid during the period for:
|
||||||||
Income taxes
|
$ | — | — | |||||
Interest
|
$ | 1,995 | — | |||||
Non-cash investing and financing activities:
|
||||||||
Common stock issued for services
|
$ | 71,800 | 8,800 |
|
Level 1:
|
Quoted prices in active markets for identical assets or liabilities. |
|
Level 2:
|
Inputs other than quoted prices that are observable for an asset or liability. These include: quoted prices for similar assets or liabilities in active market; 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; 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 in which there is little or no market data, which require the reporting entity to develop its own assumptions.
|
·
|
opened two Corporate Creativity Centers in Florida; and
|
·
|
sold 345 additional franchises.
|
Item |
Increase (I) or
Decrease (D)
|
Reason | ||
Revenues
|
I
|
Growth of business resulting in increased sales of franchises and an increase in royalties received from franchisees.
|
||
Operating Expenses
|
I
|
Growth in business and the startup of two new brands, Challenge Island and Sew Fun, an additional BFK segment called Bricks 4 Biz, and an additional Corporate Creativity Center.
|
Nine months ended June 30,
|
||||||||
2013
|
2012
|
|||||||
Cash provided by (used in) operations
|
753,025 | 217,363 | ||||||
Purchase of property and equipment
|
(25,991 | ) | (112,209 | ) | ||||
Purchase of intangible assets (Challenge Island
and Sew Fun conceptual rights and trademarks)
|
(67,800 | ) | ||||||
Repayment of loans
|
(23,500 | ) | (1,806 | ) |
General and administrative expenses
|
$ | 1,100,000 | ||
Marketing
|
$ | 360,000 | ||
Franchisee fulfillment
|
$ | 200,000 | ||
Commissions and consulting
|
$ | 1,100,000 | ||
Business development
|
$ | 75,000 |
2013
|
2014
|
2015
|
Total
|
|||||||||||||
Lease of office space
|
5,400 | 10,800 | 2,700 | $ | 23,300 |
(a)
|
The Company maintains a system of controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (“1934 Act”), is recorded, processed, summarized and reported, within time periods specified in the SEC's rules and forms and to ensure that information required to be disclosed by the Company in the reports that it files or submits under the 1934 Act, is accumulated and communicated to the Company’s management, including its Principal Executive and Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As of March 31, 2013, the Company’s Principal Executive and Financial Officer evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on that evaluation, the Principal Executive and Financial Officer concluded that the Company’s disclosure controls and procedures were effective.
|
(b)
|
Changes in Internal Controls. There were no changes in the Company’s internal control over financial reporting during the quarter ended June 30, 2013, that materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.
|
31.1
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32
|
Certification pursuant to Section 906 of the Sarbanes-Oxley Act.
|
101.INS **
|
XBRL Instance Document
|
101.SCH **
|
XBRL Taxonomy Extension Schema Document
|
101.CAL **
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF **
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB **
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE **
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
CREATIVE LEARNING CORPORATION
|
|||
August 12, 2013
|
By:
|
/s/ Brian Pappas | |
Brian Pappas
|
|||
Principal Executive | |||
Financial and Accounting Officer |
1.
|
I have reviewed this quarterly report on Form 10-Q of Creative Learning Corporation;
|
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 the 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.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-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 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 (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the 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.
|
August 12, 2013 | By: | /s/ Brian Pappas | |
Brian Pappas,
|
|||
Principal Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Creative Learning Corporation;
|
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 the 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.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-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 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 (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the 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.
|
August 12, 2013 | By: | /s/ Brian Pappas | |
Brian Pappas
|
|||
Principal Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects the financial condition and results of operation of the Company.
|
August 12, 2013 | By: | /s/ Brian Pappas | |
Brian Pappas
|
|||
Principal Executive and Financial Officer |
Consolidated Statements of Operations (Unaudited) (USD $)
|
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Revenues | ||||
Initial franchise fees | $ 1,280,871 | $ 665,317 | $ 2,731,471 | $ 1,871,339 |
Royalties and marketing fees | 279,176 | 98,496 | 658,453 | 193,570 |
Corporate Creativity Center Sales | 26,006 | 32,315 | 86,559 | 108,904 |
Total revenues | 1,586,053 | 796,128 | 3,476,483 | 2,173,813 |
Operating expenses: | ||||
Related parties | 144,689 | 93,113 | 389,961 | 255,770 |
Other | 370,971 | 197,996 | 902,463 | 539,667 |
Related parties | 1,501 | 12,400 | ||
Other | 82,963 | 18,615 | 202,768 | 49,179 |
Salaries and payroll taxes | 136,610 | 102,039 | 405,081 | 283,761 |
Advertising | 132,356 | 82,405 | 326,981 | 188,789 |
Professional fees | 20,707 | 24,237 | 86,020 | 150,638 |
Office expense | 27,649 | 28,985 | 115,341 | 74,772 |
Depreciation | 8,749 | 4,567 | 22,008 | 12,297 |
Stock-based compensation | 8,800 | |||
Other general and administrative expenses | 95,836 | 110,456 | 351,824 | 233,228 |
Total Operating expenses | 1,020,530 | 663,914 | 2,802,447 | 1,809,301 |
Income from operations | 565,523 | 132,214 | 674,036 | 364,512 |
Other income (expense): | ||||
Interest (expense): | (1,995) | |||
Other income (expense) | (460) | 963 | (21,072) | 1,952 |
Total Other Income (expense) | (460) | 963 | (23,067) | 1,952 |
Income before provision for income taxes | 565,063 | 133,177 | 650,969 | 366,464 |
Provision for income taxes (Note 1) | ||||
Net income | $ 565,063 | $ 133,177 | $ 650,969 | $ 366,464 |
Net income per share Basic and diluted | $ 0.05 | $ 0.01 | $ 0.06 | $ 0.03 |
Weighted average number of common shares outstanding | 11,611,770 | 11,414,186 | 11,611,770 | 11,414,186 |
Organization, Operations and Summary of Significant Accounting Policies
|
9 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
||||||||||
Notes to Financial Statements | ||||||||||
Note 1 . ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Creative Learning Corporation (formerly B2 Health, Inc.) was incorporated March 8, 2006 in Delaware. BFK Franchise Company LLC was formed in Nevada on May 19, 2009. Effective July 2, 2010 Creative Learning Corporation was acquired by BFK Franchise Company LLC in a transaction classified as a reverse acquisition. Creative Learning Corporation concurrently changed its name from B2 Health, Inc. to Creative Learning Corporation.. The Company, primarily through franchises, offers educational programs designed to teach principles of engineering, architecture and physics to children using Lego ® bricks. The Company may also engage in any other business that is permitted by law, as designated by the Board of Directors of the Company.
Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and disclosures required by generally accepted accounting principles for complete financial statements. 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. The results of operations for such interim periods are not necessarily indicative of operations for a full year.
Fiscal year
The Company employs a fiscal year ending September 30.
Principles of consolidation
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
Reclassifications
Certain amounts in the prior years consolidated financial statements have been reclassified to conform to the current year presentation. The reclassifications did not have any effect on the prior year net loss.
Cash and cash equivalents
The Company considers all highly liquid securities with original maturities of three months or less when acquired, to be cash equivalents. The Company had no cash equivalents at June 30, 2013 or September 30, 2012.
Accounts receivable
The Company reviews accounts receivable periodically for collectability and establishes an allowance for doubtful accounts and records bad debt expense when deemed necessary. At June 30, 2013 and September 30, 2012 the Company had $12,000 in its allowance for doubtful accounts.
Property and equipment
Property and equipment are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets, currently set at five years. Expenditures for additions and improvements are capitalized, while repairs and maintenance costs are expensed as incurred. The cost and related accumulated depreciation of property and equipment sold or otherwise disposed of are removed from the accounts and any gain or loss is recorded in the year of disposal.
Revenue recognition
Revenue is recognized on an accrual basis after services have been performed under contract terms, the service price to the client is fixed or determinable, and collectability is reasonably assured.
Initial franchise fees are recognized upon the commencement of operations by the franchisee, which is when the Company has performed substantially all initial services required by the franchise agreement. Any unearned income represents franchise fees received for which the Company has not completed its initial obligations under the franchise agreement. Such obligations generally consist of site location assistance and training. Royalties and marketing fees are recognized as earned.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Income tax
The Company accounts for income taxes pursuant to ASC 740. Under ASC 740 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Advertising costs
Advertising costs are expensed as incurred. Advertising costs for the nine month periods ended June 30, 2013 and 2012 were $326,981 and $188,789 respectively.
Net income per share
ASC 260-10-45, Earnings Per Share, requires presentation of "basic" and "diluted" earnings per share on the face of the statements of operations for all entities with complex capital structures. Basic earnings per share are computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted during the period. Dilutive securities having an anti-dilutive effect on diluted earnings per share are excluded from the calculation. When the Company is in loss position, no dilutive effect is considered.
Fair Value of Financial Instruments
The carrying amounts of cash, accounts receivable and current liabilities approximate fair value because of the short-term maturity of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment, and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates. The Company does not hold or issue financial instruments for trading purposes, nor does it utilize derivative instruments.
The FASB Accounting Standards Codification (ASC) clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. It also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows:
The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
Long-Lived Assets
In accordance with ASC 350, the Company regularly reviews the carrying value of intangible and other long-lived assets for the existence of facts or circumstances, both internally and externally, that may suggest impairment. If impairment testing indicates a lack of recoverability, an impairment loss is recognized by the Company if the carrying amount of a long-lived asset exceeds its fair value.
Note Payables
As of September 30, 2012, the Company owed a $40,000, non-interest bearing promissory note to a related party for consulting services. The note is payable in 2013 through the issuance of 40,000 shares of the Companys common stock. During the period between October 2012 and June 2013, 20,000 shares of common stock, valued at $1.00 per share, were issued in partial payment of this note payable.
Stock based compensation
The Company accounts for employee and non-employee stock awards under ASC 718, whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to non-employees are recorded based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable.
Subsequent Events
In July of 2013 the Company, under BFK Franchise Company, sold 7 new US franchises and one additional Master Franchise for Qatar. |
Organization, Operations and Summary of Significant Accounting Policies (Details Narrative) (USD $)
|
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Sep. 30, 2012
|
|
Organization Operations And Summary Of Significant Accounting Policies Details Narrative | |||||
Cash equivalents | $ 0 | $ 0 | $ 0 | ||
Allowance for doubtful accounts | 12,000 | 12,000 | 12,000 | ||
Advertising costs | 132,356 | 82,405 | 326,981 | 188,789 | |
Non-interest bearing promissory note to a related party for Consulting Services | $ 40,000 | ||||
Issuance of common stock | 40,000 | ||||
Common stock issued during period | 20,000 | ||||
Common stock per share value | $ 1.00 |