Stockholder's Equity

12 Months Ended

Dec. 31, 2015

Equity [Abstract]

Stockholder's Equity

NOTE 5 – STOCKHOLDER’S EQUITY

On July 31, 2014, OICco Acquisition IV, Inc. issued the VapAria Shareholders 36,000,000 shares of OICco common stock and 500,000 shares of our 10% Series A Convertible Preferred Stock in exchange for the common stock and preferred stock owned by the VapAria Shareholders. On July 31, 2014, the Company had 14,000,000 common shares outstanding immediately prior to the merger and net liabilities of $61,655.

As a result of the closing of this transaction, VapAria became wholly owned subsidiary of our company and its business and operations represent those of our company.

For accounting purposes, this transaction is being accounted for as a reverse merger and has been treated as a recapitalization of OICco Acquisition IV, Inc., with VapAria considered the accounting acquirer, and the financial statements of the accounting acquirer became the financial statements of the registrant. The Company did not recognize goodwill or any intangible assets in connection with the transaction. The 36,000,000 common shares and 500,000 Series A Convertible Preferred Stock issued to the shareholders of VapAria in conjunction with the share exchange transaction have been presented as outstanding for all periods. The historical financial statements include the operations of the accounting acquirer for all periods presented and net assets of $61,655 was recorded as reverse merger adjustment.

VapAria Solutions issued 500,000 shares of its 10% Series A Convertible Preferred Stock with a stated value of $1.00 per share as consideration under the exclusive License Agreement and Option to License Agreement (the “License Agreement”) on December 31, 2013. In July 2014 those shares were exchanged for an identical series of the Company’s 10% Series A convertible preferred stock. The 10% Series A convertible preferred stock pays the holder a 10% annual dividend in common stock and the shares of the 10% Series A convertible preferred stock become convertible into shares of the Company’s common stock five years from the date of issuance at a conversion rate of one share of the Company’s common stock for each share of the 10% Series A convertible preferred stock.

The License Agreement is with an affiliate of the Company, Chong Corporation, and it provides an exclusive license with industry standard royalty provisions for Chong’s intellectual property portfolio consisting of a Lobelia Patent 8,287,922 – issued October 16, 2012 – A method for lobelia delivery is provided comprising: providing a lobelia solution suitable for vaporization in a compact handheld device; providing the compact handheld device; vaporizing the lobelia solution at a low temperature upon activation by a user such that an effective serving of lobelia is provided to the user; Device Patent Application 20130199528 – A control system for a handheld vapor delivery device, comprising: a circuit configured to provide a precise amount of power from a power source to heat a heating element to a minimum required temperature to completely vaporize a predetermined volume of liquid, and control a precise duration of time to supply the precise amount of power to completely vaporize the predetermined volume of liquid at the required temperature. The application also utilizes alkaline battery chemistry and an enclosed cartridge that eliminates leaking and restricts adulteration; Tobacco Formula Patent Application 20130213417 – A tobacco solution prepared by a process and ingredients enabling vaporization at low temperature; and, Vaporized Medicants and Methods of Use Patent Application 20130072577 – Medicant solutions, i.e. suitable for vaporization at low temperature. Medicants or active ingredients that are covered by the application include energy boosters, analgesics, sleep aids, motion sickness remedies and erectile dysfunction remedies. In addition to providing the license, the Agreement also obligates the Company to continue to fund and manage the patent process on behalf of the current portfolio.

GAAP requires that intellectual property be carried on the balance sheet at the historical basis of the portfolio’s patent development. That historical carrying basis, incurred at the affiliate, Chong Corporation, and controlled by the Company’s Chairman and CEO, Alexander Chong, who also was deemed a controlling Company shareholder at the time of the License Agreement was determined to be $196,401 – the amount reflected on the Company’s balance sheet for the period ending December 31, 2013.

The Company amortized $11,556 during each of the fiscal years ending December 31, 2015 and December 2014 respectively in accordance with its policy to do a straight-line basis over periods of benefit of 17 years.

In January 2015 the Company sold 100,000 shares of common stock for $100,000 to a non-U.S. Person in a private transaction. No commission or finder’s fee were paid and the proceeds were used for working capital.

In January 2015 the Company also sold 10,000 shares of common stock for $10,000 to an investor in a private transaction. No commission or finder’s fee were paid and the proceeds were used for working capital.

In April 2015 we declared and issued 50,000 shares of our common stock to Chong Corporation as a dividend on our 10% Series A convertible preferred stock. The stock was valued at $1.00 per share.

In December 2015 the Company, in line with the Company’s 2014 Equity Compensation Plan, granted 3,000,000 non-qualified stock options to its management. These options were fully vested upon granting and have an exercise price of $1.00 per share. The options have a fair market value of $407,706 at December 31, 2015 as determined using the Black-Scholes model and were expensed in 2015. The exercise period terminates 5:00 pm Eastern Time December 31, 2020.

On December 31, 2015, the Company had 50,160,000 shares of common stock issued and outstanding.

Preferred Stock -- Under the terms of the 10% Series A convertible preferred stock the Company pays the holder a 10% annual dividend in common stock and the preferred becomes convertible to common stock five years from issuance at a conversion rate of one share of the Company’s common stock for each share of the 10% Series A convertible preferred stock. The 10% Series A convertible preferred stock is not redeemable at the holder’s option and has no voting rights.

The Company analyzed the embedded conversion option for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the conversion option should be classified as equity.