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ORGANIZATION AND BASIS OF PRESENTATION
3 Months Ended
Mar. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
ORGANIZATION AND BASIS OF PRESENTATION

The unaudited financial statements included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The financial statements and notes are presented as permitted on Form 10-Q and do not contain certain information included in the Company’s annual statements and notes. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these financial statements be read in conjunction with the December 31, 2015 Form 10-K filed with the SEC, including the audited financial statements and the accompanying notes thereto. While management believes the procedures followed in preparing these financial statements are reasonable, the accuracy of the amounts are in some respects dependent upon the facts that will exist, and procedures that will be accomplished by the Company later in the year.

 

These unaudited financial statements reflect all adjustments, including normal recurring adjustments which, in the opinion of management, are necessary to present fairly the operations and cash flows for the periods presented.

 

On June 2, 2006, Celtic Capital, Inc. was incorporated in the State of Nevada. On October 20, 2008, Celtic Capital, Inc. changed its name to Entertainment Educational Arts Inc. On May 12, 2010, the Company changed its name to DNA Precious Metals, Inc. (the “Company”). On October 29, 2010, the Company formed DNA Canada Inc., a Canadian (Province of Quebec) incorporated company, as a wholly-owned subsidiary. The Company operated all of its exploration operations through this Canadian entity.

 

The Company acquired certain mining claims on June 9, 2011 located in the Montauban and Chavigny townships near Grondines-West in the Portneuf County of Quebec, Canada (“Montauban Mine Property” or “Property”). 

 

On October 30, 2013 and November 27, 2013, the Company entered into binding agreements for the asset acquisitions of an undivided one hundred percent (100%) interest in certain mineral claims and mining assets located in the Province of Quebec’s Montauban and Chavigny townships near Grondines West, in the county of Portneuf, specifically Mining Lease BM 748 and Mining Concession Miniere CM 410. The purchase price was CDN$75,000 together with the issuance of 1,050,000 common shares of the Company. The common shares for the acquisition were valued at their fair market value on the day they were issued which totaled $496,860. In connection with the asset purchase, the Company also issued 40,000 shares of common stock to a former supplier of the vendor for mining related information of the assets purchased valued at $20,000 along with cash consideration of CDN$20,000. The Company had been awaiting confirmation of the contemplated transaction from a bankruptcy court in Montreal, Quebec overviewing the financial restructuring of the vendor. The bankruptcy court approved the transaction on April 17, 2014.

 

On January 10, 2014, the Company entered into an asset purchase agreement for an undivided one hundred percent (100%) interest in certain mineral claims located in the Province of Quebec’s Montauban and Chavigny townships near Grondines West, in the county of Portneuf, including claims, rights, concessions and leases. The purchase price was CDN$70,000, 1,000,000 common shares of the Company and a one percent (1%) net smelter return (“NSR”). The Company paid CDN$10,000 upon the signing of the asset purchase agreement with the cash balance due, along with the common shares, upon the closing of the asset purchase agreement and transfer of the mineral claims in the name of the Company. The transfer of the mineral claims was completed in February 2014 whereby the remaining cash balance due and the common shares were released to the vendor.

 

The common shares for the acquisition will be valued at their fair market value on the day they were issued which totaled $340,000. The total cost of the acquisition amounted to $403,840.

 

On April 14, 2014, the Company entered into an asset purchase agreement for an undivided one hundred percent (100%) interest in fifty-seven (57) mining claims located in the Province of Quebec’s Montauban and Chavigny townships near Grondines West, in the county of Portneuf. The purchase price was CDN$5,000 (US $4,547). The transfer of the mining claims has been completed by the Province of Quebec in the name of the Company.

 

On December 4, 2014, the Company presented a renewal request with the Government of the Province of Quebec to renew all 122 claims and this has been granted through a decision dated February 23, 2015.

 

On January 16, 2015, Breathe eCigs Corp., a Tennessee corporation (“Breathe”), entered into a Share Exchange Agreement (the “Exchange Agreement”) with the Company, whereby the Company acquired all of the issued and outstanding membership interests Breathe LLC in consideration for the issuance of 150,000,000 shares of the Company’s common stock to the members of Breathe LLC.

 

As a result of the transaction effected by the Exchange Agreement, at closing Breathe became a wholly owned subsidiary of the Company, with the former Breathe shareholders owning approximately 56% of the then issued and outstanding common stock of the Company. The Company accounted for this acquisition as a reverse merger, whereby Breathe became the accounting acquirer. As a result, the comparative figures are those of Breathe. 

 

In connection with the acquisition of Breathe LLC, on March 5, 2015 the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which the Company merged with its wholly owned subsidiary, Breathe eCig Corp., the sole purpose of the Merger was to effect a change of the Company's name from DNA Precious Metals, Inc. to Breathe eCig Corp. This name change more accurately reflects the Company’s current operations.

 

With the acquisition of Breathe LLC, it was contemplated that the Company would spin-off the operations of its mining operations, which were being conducted through the Company’s wholly owned subsidiary, DNA Canada, Inc. (“DNAC”).  Effective February 3, 2015, the Company declared a stock dividend whereby each of the Company’s shareholders on the record date (February 3, 2015) would receive one share of DNAC for every two shares of the Company’s common stock owned.

 

On February 3, 2015, the Company declared a stock dividend of its wholly owned subsidiary, DNA Canada, Inc. (“DNAC”) to the shareholders of record on February 3, 2015 whereby each shareholder of record received one share of DNAC for every two shares of DNA owned as of the record date.  The former members of Breathe LLC tendered their shares of DNAC for redemption by the Company.

 

With the completion of the spin-off, the Company was no longer in the mining field and its sole and exclusive business operations was the marketing of its electronic cigarettes and related vapor devices.

 

The Company in March 2015 entered into Distribution Agreements with various distributors for the distribution of the Company’s products.

 

On May 11, 2015 the Company formed two wholly owned subsidiaries to conduct non-eCigarette related business by way of holding medical device and other related intellectual property for the future development of for-profit activates and/or partnerships. Currently these entities are inactive, and neither holds any assets, carry any liabilities nor hold any intellectual property.  

 

On March 15, 2016, the Company had their DEF 14A approved by the SEC. As a result of this, the authorized common stock increased from 500,000,000 to 8,000,000,000 shares. The common share increase was approved by the Company’s board of Directors on February 1, 2016.  In lieu of calling a special meeting of our stockholders, our Board of Directors had elected to obtain stockholder approval of the Authorized Share Increase Amendment by written consent (“Written Consent”) pursuant to Article II, Section 12 of our Bylaws and Section 78.370 of the Nevada Revised Statues. The close of business on February 18, 2016 was fixed as the record date for the determination of holders of our Common Stock entitled to receive notice of and discretion to approve the Authorized Share Increase Amendment.

 

On January 25, 2016, Mr. Seth M. Shaw succeeded Mr. Joshua Kimmel as Chief Executive Officer of the Company.  Mr. Kimmel resigned as a director and officer of the Company at that time.  On April 5, 2016, Mr. Shinsuke Nakano was appointed CEO of the Company.  Simultaneously, Mr. Shaw was appointed Interim Chief Financial Officer and Director. 

 

As of March 30, 2016, pursuant to a settlement agreement under trademark litigation with plaintiff, Breathe LLC (a Florida organization), the Company had ceased its continuing operations in the eCigarette business (the effective date of the discontinuance of operations in that industry). In accordance with the settlement agreement, the Company is required to pay two cash payments ($10,000 was paid on March 31, 2016 and $15,000 is due by July 31, 2016.) Under this agreement, the Company also is required to issue 50 million restricted common shares of Company stock (which was issued April 15, 2016) in addition to the transfer of 5,000,000 common shares which it holds in Tauriga Sciences, Inc. The Company further agrees to split 50/50 any future sales of its held inventory. The sale of inventory shall be a joint effort by the two companies and shall last for a duration of one year from April 1, 2016. After such period, the Company will dispose of any remaining inventory. As of March 30, 2016, the Company re-entered the development stage.

 

On April 5, 2016, the Company announced its intention to give White Fox Ventures Inc. a majority controlling interest in the Company pursuant to an Acquisition Agreement by which White Fox Ventures Inc. was to be acquired for an undetermined amount of shares equating 85% of the total authorized capital of the Company. The deal was to be effective April 15, 2016. On May 5, 2016, the Company announced that the deal will be rescinded based on the due diligence on this acquisition. It was determined that the agreement and acquisition were not in the best interests of the Company at this time. The parties are working on an alternative structure at this time. The principal of White Fox Ventures Inc., Shinsuke Nakano (“Nakano”), and investors had invested $196,557 into the Company in the form of payment of various settlements and invoices outstanding. The investment will be treated as private placement at $0.0001, whereby the Company, on May 10, 2016, issued to Nakano and investors 1,965,570,000 shares of common stock. In addition, for their investments Nakano was named as the Chief Executive Officer of the Company and the Chairman of the Board and Abe was appointed to the positions of Chief Operating Officer ("COO") and Director ("Board Member".) An additional $65,000 was invested in May 2016 and an additional 650,000,000 shares are owed for this investment.

 

On May 23, 2016 the Company filed with the Secretary of State for the State of Nevada, the amendment to its state corporate charter to change the name of the company to White Fox Ventures, Inc. (“White Fox”) to better reflect the new direction of the business and to effect a 100:1 reverse stock split. On May 27, 2016, the Company filed the necessary documents with FINRA requesting these items as well as request a new ticker symbol.

 

Going Concern

 

The condensed consolidated financial statements have been prepared on a going concern basis. The going concern basis of presentation assumes that the Company will continue in operation for the foreseeable future and be able to realize its assets and discharge its liabilities and commitments in the normal course of business. The Company has generated net losses from continuing and discontinued operations totaling $202,714 and $1,000,304 for the three months ended March 31, 2016 and 2015, respectively.

 

The Company’s continuation as a going concern is dependent upon, amongst other things, continued financial support from its shareholders, attaining a satisfactory revenue level, attainment of profitable operations and the generation of cash from operations and the ability to secure new financing arrangements and new capital to carry out its business plan.  These matters are dependent on a number of items outside of the Company’s control and there exists material uncertainties that may cast significant doubt about the Company’s ability to continue as a going concern.

 

On March 30, 2016, the Company discontinued the operations of its eCigarette business as a result of the settlement agreement they entered into with Breathe LLC. The agreement was the result of the difficulties of past management to operate that business effectively and profitable. With the departure of the past CEO, Joshua Kimmel, the Company was able to convert over $1,050,000 in debt in exchange for the intellectual property the Company owned in this industry, and agreed to exit this industry and sell off all remaining inventory during the next fiscal year.

 

On May 23, 2016 the Company filed with the Secretary of State for the State of Nevada, the amendment to its state corporate charter to change the name of the company to White Fox Ventures, Inc. (“White Fox”) to better reflect the new direction of the business and to effect a 100:1 reverse stock split. On May 27, 2016 the Company filed the necessary documents with FINRA requesting these items as well as request a new ticker symbol.

 

The Company can give no assurance that it will achieve profitability in its new business or be capable of sustaining profitable continuing operations. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of the carrying amounts of assets or the amount and classification of liabilities that might result if the Company is unable to continue as a going concern. These factors raise substantial doubt regarding the ability of the Company to continue as a going concern.

 

The Company raised $169,500 for the three months ended March 31, 2016, through the sale of common stock to be issued and was able to raise capital in the form of a note from a related party in the amount of $47,500.  The Company also converted $21,190 of promissory notes into shares of common stock.

 

Basis of Accounting

 

These consolidated financial statements are prepared in conformity with United States generally accepted accounting principles (“U.S. GAAP”) and are presented in U.S. dollars.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Estimates include but are not limited to stock-based compensation and tax valuation allowances.