Nature Of Operations And Basis Of Presentations

12 Months Ended

Dec. 31, 2013

Nature Of Operations And Basis Of Presentations

Nature Of Operations And Basis Of Presentations

NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Innovative Product Opportunities Inc. (the "Company" or "Innovative") was incorporated on April 3, 2009 in the State of Delaware and established a fiscal year end of December 31. The Company is a development stage enterprise organized to provide product development. The Company is currently in the development stage as defined in Financial Accounting Standards Board ("FASB") Accounting Standard Codification ("ASC") 915.

On March 1, 2012 the company entered into a license agreement with Szar International, Inc. (dba Cigar & Spirits Magazine) (“Cigar & Spirits”) and moved offices to our new California address with Cigar and Spirits. The agreement grants Innovative the right to market the products of Cigar & Spirits including but not limited to the sales, promotion, and advertising vehicles of the Magazine. There are no specific rent terms included in the license agreement but verbally they have agreed to allow Innovative to use their office on an on-going basis free of additional charge. On July 8, 2013, Innovative received written notice that Cigar & Spirits will cancel the license agreement on August 1, 2013.  

Our business is a product development firm creating products designed, prototyped and produced in numerous industries including consumer and household goods, office products, furniture, and toys.

Restatement:

On February 22, 2012, the company entered into an $11,250 promissory note with Al Kau for cash received by the Company. This note was non-interest bearing and payable on demand. From October 10, 2012 to October 18, 2012, the Company issued 140,000,000 shares of common stock valued at $226,600 ($0.0016 per share) based on the quoted price on the day of issue for payment of principal totaling $14,000 on outstanding notes payable. The payment of principal was originally accounted as a loss on settlement of debt of $212,600. It was determined that the original accounting was in error as an amendment to the promissory note dated September 3, 2012 was not considered by the Company.

On September 3, 2012, the Company amended the promissory note with a carrying value of $11,250 issued to Al Kau on February 22, 2012. Under US GAAP, the modification of the promissory note should have been accounted for as debt extinguishment and the issuance of a new debt instrument. The amended note had a fixed conversion price of $0.0001 per share of the Company’s common stock. In additional, as a result of the modification the face value of the amended note was increased from $11,250 to $14,000 resulting in a finance charge of $2,750. The amended note bears interest at 20% per annum and allows for the lender to secure a portion of the Company assets up to 200% of the face value of the note and mature one year from the day of their respective issuance. The amended note resulted in a beneficial conversion feature of $11,250 since the closing price of common stock on September 3, 2013 exceeded the fixed conversion price. The beneficial conversion feature of $11,250 is included in additional paid-in capital. From October 10, 2012 to October 18, 2012, the holder of the amended note converted $14,000 of principal plus accrued interest into 140,000,000 shares of the Company’s common stock.

A summary of the effect of the restatement is as follows: 

	As Previously Reported			Restatement			As Restated
Balance Sheet - December 31, 2012
Notes payable	$	78,417		$	2,750		$	81,167
Total liabilities	$	160,253		$	2,750		$	163,003
Additional paid-in-capital	$	5,735,800		$	(201,350	)	$	5,534,450
Accumulated deficit during development stage	$	(5,928,585	)	$	198,600		$	(5,729,985	)
Total Stockholders’ Deficit	$	(157,985	)	$	(2,750	)	$	(160,735	)
Statement of Operations- For the Year Ended December 31, 2012
Loss on settlement of debt	$	212,600		$	(212,600	)	$	—
Finance costs	$	—		$	14,000		$	14,000
Net loss	$	(525,957	)	$	198,600		$	(327,357	)
Statement of Cash Flows - For the Year Ended December 31, 2012
Net loss	$	(525,957	)	$	198,600		$	(327,357	)
Loss on settlement of debt	$	212,600		$	(212,600	)	$	—
Accretion of debt discount	$	—		$	14,000		$	14,000