10-Q

U.S. 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: September 30, 2014

Quest Solution, Inc.

 (Exact name of small business issuer as

specified in its charter)

Delaware	20-3454263
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2580 Anthem Village Drive

Henderson, NV 89052

 (Address of principal executive offices) (Zip Code)

(702) 399-9777

 (Issuer's telephone number)

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 [X] 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 (§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 (Do not check if a smaller reporting company)	[  ]
Smaller reporting company	[X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

YES [ ] NO [X]

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:

33,710,416 shares of common stock, $0.001 par value, as of November 10, 2014.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION	3
ITEM 1. FINANCIAL STATEMENTS	3
CONDENSED CONSOLIDATED BALANCE SHEET	3
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS	4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	5
NOTES TO FINANCIAL STATEMENTS	6
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	13
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK	16
ITEM 4. CONTROLS AND PROCEDURES	16
PART II - OTHER INFORMATION	17
ITEM 1. LEGAL PROCEEDINGS	17
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.	17
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.	17
ITEM 4. MINE SAFETY DISCLOSURES.	17
ITEM 5. OTHER INFORMATION.	17
ITEM 6. EXHIBITS	17
SIGNATURES	18

2

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

QUEST SOLUTION, INC.

(F.KA. AMERIGO ENERGY, INC.)

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

		September 30,		December 31,
		2014		2013
ASSETS
	Current assets:
	Cash	$	1,584,699	$	13,302
	Account receivable, net		4,505,617		1,559
	Inventory		63,552		-
	Prepaids		289,590		76,032
	Prepaids - related party		231,508		-
	Loan receivable		-		78,733
	Note receivable		500		5,000
	Interest receivable		-		18,262
	Total current assets		6,675,466		192,888
	Other assets:
	Deposits		4,400		950
	Fixed assets, net		69,530		-
	Goodwill		14,691,372		-
	Intangibles, net		469,214		-
	License agreement		-		2,212,400
	Total other assets		15,234,516		2,213,350
	Total assets	$	21,909,982	$	2,406,238
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
	Current liabilities
	Accounts payable and accrued liabilities	$	4,949,817	$	278,010
	Accounts payable and accrued liabilities, related party		15,678		42,000
	Accrued payroll, related party		180,000		45,000
	Advances, related party		101,456		32,442
	Accrued payroll and sales tax		413,670		-
	Other liabilities		755,344		-
	Loan payable		10,000		20,000
	Line of credit		-		97,491
	Current portion of note payable		3,155,250		-
	Note payable, related party		834,960		-
	Current portion of  long-term convertible debt		-		25,000
	Total current liabilities		10,416,175		539,943
	Long-term liabilities:
	Note payable		11,251,000		-
	Convertible note payable		-		1,975,000
	Total liabilities		21,667,175		2,514,943
	Stockholders' equity (deficit)
	Preferred stock; $0.001 par value; 25,000,000 shares authorized 500,000 and 3,500,000 shares outstanding as of September 30, 2014 and December 31, 2013, respectively.		500		3,500
	Common stock; $0.001 par value; 100,000,000 shares authorized; 33,710,416 and 34,935,416 shares outstanding of September 30, 2014 and December 31, 2013 respectively.		33,710		34,935
	Unamortized stock-based compensation		-		(23,400)
	Unissued shares		-		360
	Additional paid-in capital		17,205,399		16,919,705
	Accumulated (deficit)		(16,996,802)		(17,043,805)
	Total stockholders' equity (deficit)		242,807		(108,705)
	Total liabilities and stockholders' equity (deficit)	$	21,909,982	$	2,406,238

The accompanying notes to the financials should be read in conjunction with these financial statements.

3

QUEST SOLUTION, INC.

(F.KA. AMERIGO ENERGY, INC.)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the three months				For the nine months
	ending September 30,				ending September 30,
	2014		2013		2014		2013
Revenues
Gross Sales	$	9,120,927	$	804	$	26,287,892	$	1,559
Less sales returns, discounts, & allowances		(36,465)		-		(147,024)		-
Oil revenues		-		-		-		514
Total Revenues		9,084,462		804		26,140,868		2,073
Cost of goods sold
Cost of goods sold		7,072,614		-		20,086,597		-
Cost of goods sold, related party		347,261		-		1,041,784		-
Total costs of good sold		7,419,875		-		21,128,381		-
Gross profit		1,664,587		804		5,012,487		2,073
Operating expenses
General and administrative		222,857		875		723,447		14,111
Salary and employee benefits		1,252,445		-		3,895,458		-
Depreciation and amortization		7,067		-		17,889		-
Stock compensation		54,130		135,878		84,215		192,663
Professional fees		110,005		3,500		377,769		238,374
Total operating expenses		1,646,504		140,253		5,098,778		445,148
Income (loss) from operations		18,083		(139,449)		(86,291)		(443,075)
Other income (expenses):
Gain on debt settlement		29,999		-		181,948		19,195
Loss on license settlement		-		-		(93,578)		-
Loss on note receivable settlement		-		-		(18,995)		-
Interest expense		(375)		(41,907)		(1,375)		(103,878)
Other income		15,079		-		65,294		-
Total other income (expenses)		44,703		(41,907)		133,294		(84,683)
Net income (loss)	$	62,786	$	(181,356)	$	47,003	$	(527,758)
Net loss per share - basic	$	0.00	$	(0.01)	$	0.00	$	(0.02)
Net loss per share - diluted	$	0.00	$	(0.01)	$	0.00	$	(0.02)
Weighted average number of common shares outstanding - basic		33,660,416		25,424,824		33,334,616		24,678,868
Weighted average number of common shares outstanding - diluted		50,445,416		24,470,380		50,119,616		24,297,602

The accompanying notes to the financials should be read in conjunction with these financial statements.

4

QUEST SOLUTION, INC.

(F.KA. AMERIGO ENERGY, INC.)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(UNAUDITED)

	For the nine months
	ending September 30,
	2014		2013
Cash flows from operating activities:
Net loss	$	47,003	$	(527,758)
Adjustments to reconcile net loss to
net cash used by operating activities:
Stock based compensation - shares for services		67,836		63,281
Depreciation and amortization		(1,449)		-
Loss on cancelled shares		(105,901)		-
Gain on license		93,578		-
Loss on settlement of debt		(37,491)		-
Loss on note receivable settlement		18,995		-
Interest expense		-		118,994
Bad debt expense		1,559		-
Warrants granted		119,892		148,150
Gain on extinguishment of debt		-		(19,196)
Changes in operating assets and liabilities:
(Increase) / decrease in accounts receivable		(1,060,873)		(1,559)
(Increase) / decrease in prepaid		-		(16,266)
(Increase) / decrease in prepaid, related party		1,041,784
(Increase) / decrease in customer deposit		(45,267)
Increase / (decrease) in accounts payable and accrued liabilities		301,329		187,567
Increase / (decrease) in accounts payable and accrued liabilities, related party		(26,322)		14,088
(Increase) / decrease in salary payable, related party		135,000
(Increase) / decrease in other liabilities		455,619
Increase / (decrease) in advances from related party		69,014
Net cash provided  (used) by operating activities		1,074,306		(32,699)
Cash flows from investing activities:
(Purchase of) cash from acquisition		1,950,120		-
Change in other assets		3,221		-
(Purchase) of license agreements		(150,000)
(Purchase) of notes receivable		-		(88,810)
Net cash (used) by investing activities		1,803,341		(88,810)
Cash flows from financing activities:
Increase in bank overdraft		-		2,814
Proceeds from shares sold		25,000		-
Proceeds from loan receivable		78,000		-
Proceeds from note receivable		4,500		-
Proceeds (payment) on line of credit		(60,000)		89,640
Proceeds (payment) from notes/loans payable		(1,343,750)		20,000
Payment on loans, related party		-		(3,000)
Payment on loans payable		(10,000)		-
Proceeds from loan, related party		-		12,000
Net cash provided (used) by financing activities		(1,306,250)		121,454
Net (decrease) increase in cash		1,571,397		(55)
Cash, beginning of period		13,302		55
Cash, end of period	$	1,584,699	$	-
Cash paid for interest	$	-	$	-
Cash paid for taxes	$	-	$	-
Supplementary cash flow information:
Stock issued for services	$	124,800	$	93,850
Warrants issued for services	$	591,761	$	148,150
Stock and warrants for License	$	-	$	212,400
Note payable for purchase of intangibles	$	450,000	$	2,000,000

The accompanying notes to the financials should be read in conjunction with these financial statements.

5

QUEST SOLUTION, INC

(FKA AMERIGO ENERGY, INC.)

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION

The interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles 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.

These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2013 and notes thereto included in the Company's Form 10-K. The Company follows the same accounting policies in the preparation of interim reports.

Operating results for the three and nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the year ended December 31, 2014.

Summary of Significant Accounting Policies

This summary of significant accounting policies of Quest Solution, Inc. is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management who is responsible for the integrity and objectivity of the financial statements. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements.

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the 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 revenue and expenses during the reporting period. Actual results could differ from those estimates.

Cash

Cash consists of petty cash, checking, savings, and money market accounts.  For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of September 30, 2014 and December 31, 2013.

The Company maintains its cash in bank deposit accounts which, at times, may exceed federal insured limits.

Accounts Receivable

Accounts receivable are carried at their estimated collectible amounts. The Company provides allowances for uncollectible accounts receivable equal to the estimated collection losses that will be incurred in collection of all receivables. Accounts receivable are periodically evaluated for collectability based on past credit history with customers and their current financial condition. The Company’s management determines which accounts are past due and if deemed uncollectible, the Company charges off the receivable in the period the determination is made. The Company generally requires no collateral to secure its ordinary accounts receivable.

6

Property and Equipment

Property and equipment are stated at cost and depreciated using both straight-line and accelerated methods over estimated useful lives ranging from 3 to 15 years. Upon disposition of property and equipment, related gains and losses are recorded in operations. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expenses as incurred.

Shipping and Handling Costs

The Company classifies shipping and handling costs as operating expenses in the statements of income.

Advertising

The Company generally expenses advertising costs as incurred.

Inventory

Substantially all inventory consists of finished goods and are valued based upon first-in first-out ("FIFO") cost, not in excess of market. The determination of whether the carrying amount of inventory requires a write-down is based on a detailed evaluation of inventory relative to any potential slowing moving products or discontinued items as well as the market conditions for the specific inventory items.

Depreciation and amortization

Depreciation and amortization expense primarily consists of the non-cash write-down of tangible and intangible assets over their expected economic lives. We expect this expense to continue to grow in absolute dollars and potentially as a percentage of revenue as we continue to grow and incur capital expenditures to improve our technological infrastructure and acquire assets through potential future acquisitions.

Revenue Recognition

Recurring technology and services revenue consists of subscription-based fees, software subscription license fees, software maintenance fees and hosting fees related to the use of our solution to manage our customers' communications expenses, as well as fees for perpetual software licenses and professional services and products sold.

We recognize revenue when persuasive evidence of an arrangement exists, pricing is fixed and determinable, collection is reasonably assured and delivery or performance of service has occurred. Recurring technology and services subscription-based fees, software subscription license fees, software maintenance fees and hosting fees are recognized ratably over the term of the period of service. The subscription-based services we provide include help desk, staging, carrier activations and provisioning.

Sales revenue is recognized upon the shipment of merchandise to customers.  The Company recognizes revenues from software sales when software products are shipped.

Software license fees consist of fees paid for a perpetual license agreement for our technology, which are recognized in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC 605, Software Revenue Recognition, as amended.

Professional services related to the implementation of our software products, which we refer to as consulting services, are generally performed on a fixed fee basis under separate service arrangements. Consulting services revenue is recognized as the services are performed by measuring progress towards completion based upon either costs or the achievement of certain milestones.

Fair Value of Financial Instruments

The Company’s financial instruments include cash, accounts receivable, accounts payable, and notes payable. All instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at September 30, 2014 and December 31, 2013. The Company did not engage in any transaction involving derivative instruments.

7

As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The three levels of the fair value hierarchy are described below:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability;

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

Recent pronouncements

The Company’s management has reviewed all of the FASB’s Accounting Standard Updates through September 30, 2014 and has concluded that none will have a material impact on the Company’s financial statements. Management does not believe that any other recently issued but not yet effective accounting pronouncements, if adopted, would have an effect on the accompanying consolidated financial statements.

Goodwill

We test our goodwill and other indefinite-lived intangible assets for impairment annually, or, under certain circumstances, more frequently, such as when events or circumstances indicate there may be impairment. We are required to write down the value of goodwill only when our testing determines the recorded amount of goodwill exceeds the fair value. Our annual measurement date for testing goodwill impairment is December 31, at which date we test our reporting units, which is currently our ownership in Quest Solution, Inc.

As the acquisition occurred during the nine months ended September 30, 2014 we are in the process of completing our goodwill impairment testing by considering multiple avenues inclusive of a qualitative assessment, a market approach and a discounted cash flow method. The market approach method includes the use of comparable multiples of publicly traded companies whose services are comparable to ours. The discounted cash flow method is based on the present value of projected cash flows and a terminal value, which represents the expected normalized cash flows of the segments beyond the cash flows from the discrete projection period.

We have not yet completed our impairment testing. However, based on our analysis performed thus far with respect to these segments as described above, we believe that the goodwill related to the Quest Solution acquisition was not impaired as of September 30, 2014.

NOTE 2 - ACQUISITION OF QUEST SOLUTION, INC.

On January 10, 2014, the Company completed the purchase of Quest Solution, Inc. ("Quest"), an Oregon corporation in the technology, software, and mobile data collection systems business.

The purchase price for Quest was $16,000,000.

The consideration given to the shareholders of Quest Solution, Inc. were as follows:

A.  A promissory note for $4,969,000, which payments are to be a minimum of 45.0% of the cash earned from EBITDA of Quest Solution, Inc. during the prior quarter.  Once the Holder has received $3,375,000, the principal and interest payments on the promissory note are to be a minimum of 22.5% of the cash earned from EBITDA of Quest Solution, Inc. during the prior quarter.  

8

The balance of the promissory note is expected to be paid before February 18, 2016, or twenty five (25) months from the date of execution of this agreement. Should the cash flow and payments from EBITDA during the term of this agreement not be sufficient to pay off the loan prior to its maturation, the loan will extend for additional twelve (12) months periods till paid off.  

The holder of the note is permitted to convert up $1,594,000 of the Promissory Note into common shares of the Company at a ratio of one share for every $1.00 of promissory note converted.  This conversion feature is non-transferrable without written consent from the Company.  

B.  A promissory note for $11,031,000, which payments are to be payments on the promissory  note are  to  be a minimum of forty five percent (45%) of the cash earned from EBITDA of Quest Solution, Inc. during the prior quarter.  Once the first promissory note ($4.97mm) has received $3,375,000, the principal and interest payments on this promissory note are to be a minimum of 67.5% of the cash earned from EBITDA of Quest Solution, Inc. during the prior quarter.  

The balance of the promissory note is expected to be paid before January 18, 2017, or three (3) years from the date of execution of this agreement.  Should the cash flow and payments from EBITDA during the term of this agreement not be sufficient to pay off the loan prior to its maturation, the loan will extend for additional twelve (12) months periods till paid off.  

The holders of the notes are permitted to convert up to $4,781,000 of the Promissory Note into common shares of the Company at a ratio of one share for every $1.00 of promissory note converted. This conversion feature is non-transferrable without written consent from the Company.  

The prior owners of Quest shall retain a security interest in the subsidiary until the promissory note is satisfied.  

In accordance with ASC 805-10-25-13, the following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition and the preliminary allocation of the purchase price to the fair value of net assets acquired:

Cash	$	1,950,121
Accounts receivable, net		3,444,744
Prepaid expenses, related party		1,273,292
Note receivable, related party		688,677
Other assets		196,794
Goodwill		13,429,857
Accounts payable and accrued liabilities		(4,983,485)
Total purchase price allocated	$	16,000,000

NOTE 3 - INTEREST AND LOAN RECEIVABLE

Concurrent with the company entering into a line of credit agreement for production in 2013, the Company entered into a corresponding line of credit with its supply chain related to the production of the liquor brands.  The line of credit for the importer is $100,000, which will bear interest at 20% of funds advanced.  The line of credit was guaranteed by the importer as well as the owner of the import company, personally. As of September 30, 2014 and December 31, 2013, the balance of the loan receivable was $0 and $78,733.  This loan was settled during first quarter 2014 and the line of credit was closed.

NOTE 4 - PREPAID EXPENSES, RELATED PARTY

As of September 30, 2014 and December 31, 2013 there were $289,590 and $76,032 of prepaid expenses in the company.  $275,279 of the prepaid expenses as of September 30, 2014 relate to shares issued to consultants which will be expensed over the respective term of the contract and warrant agreement.  See Note 8 for details on the shares and warrants issued.

As of September 30, 2014, there were $231,508 of related party prepaid expenses.  The prepaid expenses are made up of prepaid insurance which is being expensed through November 30, 2014 for insurance coverage paid for in 2013, which the policy period covers the company through November 30, 2014.  The Company deems this to be a related party expense as the prior owners of Quest Solution, Inc. are the controlling shareholders of the insurance company.  As of January 1, 2014, the Company will not be renewing any of these policies once they expire.  In the nine months ended September 30, 2014, $1,041,784 was expensed in cost of goods sold, related party.

9

NOTE 5 - INTELLECTUAL PROPERTY

On February 25, 2013, the Company announced the acquisition of a license agreement for the promotion of a liquor line. In consideration for the acquisition, the Company agreed to issue 360,000 shares of its common stock fair valued at $32,400, warrants to purchase up to two million (2,000,000) shares of the Company’s common stock valued at $180,000 utilizing the Black-Scholes Model, and a convertible promissory note in the amount of $2,000,000. Pursuant to the terms of the agreement, the warrants were subject to specific vesting requirements related to sales benchmarks whereas for each 5,000 cases sold the seller will receive 500,000 fully vested warrants exercisable at a rate of $1.00 per share for a term of five years.  

On January 10, 2014, the Company came to terms on a settlement with its prior investment in the license and the related liquor brands.  The Company concurrently canceled its consulting contract related to the liquor line and received back 1,765,000 of the shares that had previously been issued in conjunction with this venture.   This cancellation also removed the $2,000,000 promissory note related to the acquisition, as well as the $65,000 annual consulting contract with the Consultant and the corresponding 2,000,000 warrants issued as well.  As of September 30, 2014, there are no amounts remaining due to this transaction.

During the period ending September 30, 2014, the company acquired four different licenses for technology.  The licenses acquired are for (1) re-enforcing steel detection, (2) gun barrel detection, (3) air frame inspection, and (4) mining belt guard inspection.  The cost of the first three licenses was $150,000 each with a 5% royalty on sales.  The term of these licenses is 15 years each.  A fourth license was acquired with minimum purchase requirements stated in the contract.  

NOTE 6 - LINE OF CREDIT

On March 22, 2013, the Company executed a line of credit agreement with a third party for $100,000 to be used as purchase order financing for the production of liquor brands.  The balance at September 30, 2014 and December 31, 2013 was $0 and $97,491.  This line of credit was closed during the first quarter of 2014.

During December of 2011, Quest Solution acquired a $750,000 revolving line of credit from Wells Fargo Bank. Borrowings are collateralized by accounts receivable, equipment and inventory owned by the Company as well as a personal guarantee from the two shareholders.  This line of credit expired September 15, 2014. Monthly interest only payments are required with the principal portion due at maturity. The balance at September 30, 2014 was $0.  Interest is charged at a rate of prime plus 0.5% (currently 3.75%), with a floor rate of 4.5%.

NOTE 7 - NOTES PAYABLE

Notes and loans payable consisted of the following:

	September 30,		December 31,
	2014		2013
Note payable - acquisition of Quest	$	14,406,250	$	--
Note payable - related party		834,960		--
Note payable related to license agreement - canceled January 2014		--		2,000,000
Total notes payable		15,241,210		2,000,000
Less: current portion		(3,990,210)		(25,000)
Total long-term notes payable	$	11,251,000	$	1,975,000

As of September 30, 2014 and 2013, the Company record interest expense in connection with these notes in the amount of $0 and $70,996, respectively.

The $834,960 related party note has no definitive due date so it has been classified as current liabilities.

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NOTE 8 - STOCKHOLDERS' DEFICIT

As of September 30, 2014, there were 33,710,416 shares of common stock outstanding, and 500,000 preferred shares outstanding.

Preferred Stock

As of September 30, 2014, there were 25,000,000 preferred shares authorized and 500,000 preferred shares outstanding.  The board of directors had previously set the voting rights for the preferred stock at 1 share of preferred to 250 common shares.

Common Stock

In January 2014, concurrent with the cancellation of the license agreement, the Company cancelled two consulting agreements previously entered into during April 2013, in which shares previously issued were returned in full to the Company. A total of 1,765,000 shares valued at $105,900 were returned and canceled in full settlement.

On March 1, 2014, the Company issued a total of 100,000 shares valued at $41,000 to Douglas Zorn, the Company’s then Chief Operating Officer for services. The shares were fully earned and non assessable as of March 31, 2014. In addition the Company issued the same consultant a total of 900,000 warrants valued at $368,878. The value of these warrants estimated by using the Black-Scholes option pricing model with the following assumptions: exercise price of $1.50, term of 3 years; risk free interest rate of 0.69%; dividend yield of 0% and expected volatility of 433%. As of September 30, 2014 the agreement with this officer has been mutually cancelled and Mr. Zorn’s contract as Chief Operating Officer ceased at the end of August 2014.

During the first quarter of 2014, the Company issued warrants to executives of Quest Solution, Inc. with the following milestones:  

When the Company reaches $35,000,000 in sales, 5,000,000 warrants at $1.00 per share vest and become exercisable. These warrants expire on January 9, 2016.  

When the Company makes it to the NASDAQ or AMEX or larger exchange, 2,000,000 warrants at $3.00 per share vest and become exercisable. These warrants expire on January 9, 2017.

Additionally, when the Company reaches $40,000,000 in sales, a 2,000,000 share bonus is given to the executives. This expires January 8, 2017.

On May 9, 2014, the company issued a total of 240,000 shares valued at $124,800 for marketing services.

On August 8, 2014, the company issued 250,000 shares of stock related to warrants which were exercised.

On September 25, 2014, the company sold 50,000 shares valued at $25,000.

NOTE 9 - RELATED PARTY TRANSACTIONS

As of September 30, 2014, the Company had $180,000 in accrued payroll payable to the Company’s current officers.

As of September 30, 2014, the Company owes $51,456 in related party loans to the CEO who has made loans to the Company for expenses as well as $15,678 to an entity the CEO owns which lent the Company money.

As of September 30, 2014, an officer advanced $50,000 in relation to company expenses.

11

As mentioned in Note 7, notes and loans payable consisted of the following:

	September 30,		December 31,
	2014		2013
Note payable - acquisition of Quest	$	14,406,250	$	--
Note payable - related party		834,960		--
Note payable related to license agreement - canceled January 2014		--		2,000,000
Total notes payable		15,241,210		2,000,000
Less: current portion		(3,990,210)		(25,000)
Total long-term notes payable	$	11,251,000	$	1,975,000

As of September 30, 2014 and 2013, the Company record interest expense in connection with these notes in the amount of $0 and $70,996, respectively.

The $834,960 related party note has no definitive due date so it has been classified as current liabilities.

NOTE 10 - SUBSEQUENT EVENTS

The Company has evaluated subsequent events in accordance with ASC 855 through the date in which it has made its financial statements available, and has identified no significant reportable events through that date.

12

WHERE YOU CAN FIND ADDITIONAL INFORMATION

We have filed with the Securities and Exchange Commission this Form 10-Q, including exhibits, under the Securities Act. You may read and copy all or any portion of the registration statement or any reports, statements or other information in the files at SEC's Public Reference Room located at 100 F Street, NE., Washington, DC 20549, on official business days during the hours of 10 a.m. to 3 p.m.

You can request copies of these documents upon payment of a duplicating fee by writing to the Commission. You may call the Commission at 1-800-SEC-0330 for further information on the operation of its public reference room. Our filings, including the registration statement, will also be available to you on the website maintained by the Commission at http://www.sec.gov.

We intend to furnish our stockholders with annual reports which will be filed electronically with the SEC containing consolidated financial statements audited by our independent auditors, and to make available to our stockholders quarterly reports for the first three quarters of each year containing unaudited interim consolidated financial statements.

The Company maintains its website at http://www.QuestSolution.com.   Our website and the information to be contained on either site, or connected to either site, are not part of or incorporated by reference into this filing.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This discussion contains forward-looking statements. The reader should understand that several factors govern whether any forward-looking statement contained herein will be or can be achieved. Any one of those factors could cause actual results to differ materially from those projected herein. These forward-looking statements include plans and objectives of management for future operations, including plans and objectives relating to the products and the future economic performance of the Company. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions, future business decisions, and the time and money required to successfully complete development projects, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of those assumptions could prove inaccurate and, therefore, there can be no assurance that the results contemplated in any of the forward- looking statements contained herein will be realized. Based on actual experience and business development, the Company may alter its marketing, capital expenditure plans or other budgets, which may in turn affect the Company's results of operations. In light of the significant uncertainties inherent in the forward-looking statements included therein, the inclusion of any such statement should not be regarded as a representation by the Company or any other person that the objectives or plans of the Company will be achieved.

A complete discussion of these risks and uncertainties are contained in our Annual Financial Statements included in the Form 10-K for the fiscal year ended December 31, 2013, as filed with the Securities and Exchange Commission on April 2, 2014.

Introduction

Quest Solution, Inc. has historically derived our revenues from various sources. Our strategy has developed into leveraging management's relationships for investments for the Company. The Company intends on continuing with its acquisition and holding strategy of existing companies with revenues and positive cash flow.

Through its wholly owned subsidiary, Quest Solution is a leading provider in the technology, software, and mobile data collection systems business.

Quest Solution is a national mobility systems integrator with a focus on design, delivery, deployment and support of fully integrated mobile solutions. The Company takes a consultative approach by offering end to end solutions that include hardware, software, communications and full lifecycle management services. The highly tenured team of professionals simplifies the integration process and delivers proven problem solving solutions backed by numerous customer references.

The following is a discussion of the Company’s financial condition, results of operations, financial resources and working capital. This discussion and analysis should be read in conjunction with the Company's financial statements contained in this Form 10-Q.

13

Overview

RESULTS OF OPERATIONS

Revenues

For the three months ended September 30, 2014 and 2013, the company generated revenues in the amount of $9,120,927 and $804, respectively, the increase is attributable to the addition of our wholly owned subsidiary.  

For the three months ended September 30, 2014 and 2013, the company generated revenues on producing oil and gas properties in the amount of $0 and $0, respectively.

For the nine months ended September 30, 2014 and 2013, the company generated revenues in the amount of $26,287,892 and $1,559, respectively in revenues from such production the increase is attributable to the addition of our wholly owned subsidiary.  

For the nine months ended September 30, 2014 and 2013, the company generated revenues on producing oil and gas properties in the amount of $0 and $514, respectively.

Cost of Goods Sold

For the three months ended September 30, 2014 and 2013, the company recognized a total of $7,072,614 and $0, respectively in cost of goods sold the increase is attributable to the addition of our wholly owned subsidiary.  .  The company also recognized $347,261 and $0, respectively of cost of goods sold, related party from the insurance expenses paid in 2013 for a policy which covers the company through November 2014.

For the nine months ended September 30, 2014 and 2013, the company recognized a total of $20,086,597 and $0, respectively in cost of goods sold the increase is attributable to the addition of our wholly owned subsidiary.  .  The company also recognized $1,041,784 and $0, respectively of cost of goods sold, related party from the insurance expenses paid in 2013 for a policy which covers the company through November 2014.

Operating expenses

Total operating expense for the three months ended September 30, 2014 and 2013 recognized was $1,646,401 and $140,253, respectively the increase is attributable to the addition of our wholly owned subsidiary.   

Total operating expense for the nine months ended September 30, 2014 and 2013 recognized was $5,098,778 and $445,148, respectively the increase is attributable to the addition of our wholly owned subsidiary.   

Three Months Ended

General and administrative expenses for the three months ended September 30, 2014 totaled $222,754 and $780 during the comparable three month period. The increase is primarily the result of an increase in business activities related to the acquisition.

Salary and employee benefits for the three months ended September 30, 2014 totaled $1,252,445 as compared to $0 for the three months ended September 30, 2013. The increase is directly related to the acquisition.

Lease operating expense for the three months ended September 30, 2014 totaled $0 as compared to $95 for the three months ended September 30, 2013. The decrease is directly related to the decrease in interest the Company holds.

Stock compensation for the three months ended September 30, 2014 were $54,130 as compared to $135,878 for the three months ended September 30, 2013. The decrease was related to the company issuing less stock for services during the period.

Professional fees for the three months ended September 30, 2014 were $110,005 as compared to $3,500 for the three months ended September 30, 2013. The increase was related to the increase of professional accounting, consulting and legal services.

14

Other income and expenses Three Months Ended

Interest Expense - Interest expense for the three months ended September 30, 2014 totaled $375 as compared to $41,907 for the three months ended September 30, 2013. The decrease is directly related to company paying in full various outstanding loans.

Interest Income - Interest income for the three months ended September 30, 2014 totaled $15,079 as compared to $0 for the three months ended September 30, 2013. The increase is directly related to the new operations.

Nine Months Ended

General and administrative expenses for the nine months ended September 30, 2014 totaled $723,344 and $13,829 during the comparable nine month period. The increase is primarily the result of an increase in business activities related to the acquisition.

Salary and employee benefits for the nine months ended September 30, 2014 totaled $3,895,458 as compared to $0 for the nine months ended September 30, 2013. The increase is directly related to the acquisition.

Lease operating expense for the nine months ended September 30, 2014 totaled $103 as compared to $282 for the nine months ended September 30, 2013. The decrease is directly related to the decrease in interest the Company holds.

Stock compensation for the nine months ended September 30, 2014 were $84,215 as compared to $192,663 for the nine months ended September 30, 2013. The decrease was related to the company not issuing as much stock for services during the period.

Professional fees for the nine months ended September 30, 2014 were $377,769 as compared to $238,374 for the nine months ended September 30, 2013. The increase was related to the increase of professional accounting, consulting and legal services.

Other income and expenses Nine Months Ended

Interest Expense - Interest expense for the nine months ended September 30, 2014 totaled $1,375 as compared to $103,878 for the nine months ended September 30, 2013. The decrease is directly related to company paying in full various outstanding loans.

Interest Income - Interest income for the nine months ended September 30, 2014 totaled $65,294 as compared to $0 for the nine months ended June 30, 2013. The increase is directly related to the new operations.

The company recorded a loss on license settlement in the amount of $93,578 for the nine months ended September 30, 2014 ($0 for the nine months ended September 30, 2013).  A further loss of $18,995 was recognized in the settlement of a note receivable for the nine months ended September 30, 2014 ($0 for the nine months ended September 30, 2013). The company recognized a gain on debt settlement of $181,948 for the nine months ended September 30, 2014 ($19,195 for the nine months ended September 30, 2013).

Net income (loss) attributable to common stock

The company realized a net income of $62,786 for the three months ended September 30, 2014, compared to a net loss of $181,356 for the three months ended September 30, 2013, an increase of $244,142. The increase in net income is attributable to the income from our wholly owned subsidiary.

The company realized a net income of $47,003 for the nine months ended September 30, 2014, compared to a net loss of $527,758 for the nine months ended September 30, 2013, an increase of $574,761. The increase in net income is attributable to the income from our wholly owned subsidiary.

Liquidity and capital resources

At September 30, 2014, we had cash in the amount of $1,584,699 and a working capital deficit of $3,740,709.  In addition, our stockholders' equity was $242,807 at September 30, 2014 and a stockholder deficit at December 31, 2013 of $108,705.

Our accumulated deficit decreased from $17,043,805 at December 31, 2013 to $16,996,802 at September 30, 2014.

15

Our operations resulted in net cash provided of $1,074,306 during the nine months ended September 30, 2014, compared to cash used of $32,699 during the nine months ended September 30, 2013, an increase of $1,107,005.

Net cash by investing activities was $1,803,341 for the nine months ended September 30, 2014, compared to using net cash used of $88,810 for the nine months ended September 30, 2013, an increase of $1,892,151.

Our financing activities used net cash of $1,306,250 during the nine months ended September 30, 2014, compared to providing net cash of $121,454 during the nine months ended September 30, 2013, a decrease of $1,427,704.

Inflation

The Company's results of operations have not been affected by inflation and management does not expect inflation to have a material impact on its operations in the future.

Off- Balance Sheet Arrangements

The Company currently does not have any off-balance sheet arrangements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Not Applicable

ITEM 4. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS

We evaluated the effectiveness of our disclosure controls and procedures as of September 30 2014, the end of the period covered by this Quarterly Report on Form 10-Q. This evaluation was undertaken by our Chief Executive Officer and Chief Financial Officer, Jason F. Griffith.

Mr. Griffith serves as our principal executive officer and as our principal accounting and financial officer.  The Company utilizes a third party to assist in the financial statement preparation for the auditor and our wholly owned subsidiary has an accounting team to prepare the financials at that level.

We reviewed and evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as of the end of the fiscal quarter covered by this report, as required by Securities Exchange Act Rule 13a-15, and concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed in our reports filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended, is accumulated and communicated to management on a timely basis, including our principal executive officer and principal financial and accounting officer.

CONCLUSIONS

Based on this evaluation, our principal executive officer and principal financial and accounting officer concluded that our disclosure controls and procedures are effective to ensure that the information we are required to disclose in reports that we file pursuant to the Exchange Act are recorded, processed, summarized, and reported in such reports within the time periods specified in the Securities and Exchange Commission's rules and forms.

CHANGES IN INTERNAL CONTROLS

There were no changes in our internal controls over financial reporting that occurred during the last fiscal quarter, i.e., the three months ended September 30, 2014, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

16

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

As of September 30, 2014, the Company is not a party to any pending material legal proceeding. To the knowledge of management, no federal, state or local governmental agency is presently contemplating any proceeding against the Company. To the knowledge of management, no director, executive officer or affiliate of the Company, any owner of record or beneficially of more than five percent of the Company's Common Stock is a party adverse to the Company or has a material interest adverse to the Company in any proceeding.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

 Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS

 (a) Exhibits.

31.1 Certification of our Principal Executive Officer and Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1 Certification of our Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)

17

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 12, 2014

By: /s/ Jason F. Griffith

Jason F. Griffith

Chief Executive Officer,

and Chief Financial Officer

18

EX-31

Exhibit 31.1

CERTIFICATION BY CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13a-14(a)/15(d)-14(a)

I, Jason F. Griffith, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of Quest Solution, Inc. for the fiscal quarter ended September 30, 2014:

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 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 annual report) 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 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.

6.

I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date:  November 12, 2014

By: /s/ Jason F. Griffith

Jason F. Griffith

Chief Executive Officer,

and Chief Financial Officer

EX-32

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

In connection with the Quarterly Report of Quest Solution, Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Jason F. Griffith, Chief Executive Officer and Chief Financial Officer of the Company do certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to their knowledge:

(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 operations of the Company.

/s/ Jason F. Griffith

Chief Executive Officer

Chief Financial Officer

November 12, 2014

XML

Stockholders' Deficit, Note (Details) (USD $)	3 Months Ended		3 Months Ended					3 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Mar. 31, 2014 Executives of Quest Solution, Inc. (Sales Milestone, Warrants)	Mar. 31, 2014 Executives of Quest Solution, Inc. (Market Milestone, Warrants)	Mar. 31, 2014 Executives of Quest Solution, Inc. (Sales Milestone, Common Stock)	Jan. 10, 2014 Le Flav Spirits	Sep. 30, 2014 Preferred Stock	Mar. 31, 2014 Services rendered, COO	Jun. 30, 2014 Marketing services
Common stock outstanding	33,710,416	34,935,416
Preferred shares authorized	25,000,000	25,000,000					25,000,000
Preferred shares issued and outstanding							500,000
Common stock returned						1,765,000
Common stock returned, value						$ 105,900
Common stock issued for services								100,000	240,000
Value of common stock issued for services								41,000	124,800
Warrants issued for services								900,000
Warrants issued for services, value								368,878
Contingent share-based compensation			When the Company reaches $35,000,000 in sales, 5,000,000 warrants at $1.00 per share vest and become exercisable. These warrants expire on January 9, 2016	When the Company makes it to the NASDAQ or AMEX or larger exchange, 2,000,000 warrants at $3.00 per share vest and become exercisable. These warrants expire on January 9, 2017	when the Company reaches $40,000,000 in sales, a 2,000,000 share bonus is given to the executives. This expires January 8, 2017
Common stock related to warrants which were exercised	250,000
Common stock issued for cash, shares	50,000
Common stock issued for cash, proceeds	$ 25,000

XML

Interest and Loan Receivable (Details) (USD $)	Sep. 30, 2014	Dec. 31, 2013	Mar. 22, 2013
Line of credit amount provided			$ 100,000
Amount of loan receivable		78,733
Line of credit agreement, Provided
Interest rate on line			20.00%
Amount of loan receivable	$ 0	$ 78,733

XML

Basis of Presentation: Fair Value of Financial Instruments (Policies)

3 Months Ended

Sep. 30, 2014

Policies

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company’s financial instruments include cash, accounts receivable, accounts payable, and notes payable. All instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at September 30, 2014 and December 31, 2013. The Company did not engage in any transaction involving derivative instruments.

As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The three levels of the fair value hierarchy are described below:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability;

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

XML

Notes Payable Disclosure: Schedule of Notes Payable (Details) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Notes payable	$ 11,251,000	$ 1,975,000
Note payable (acquisition of Quest)
Notes payable	14,406,250
Note payable (related party)
Notes payable	834,960
Note payable (license agreement)
Notes payable		$ 2,000,000

XML

Prepaid Expenses, Related Party, Note

3 Months Ended

Sep. 30, 2014

Notes

Prepaid Expenses, Related Party, Note

NOTE 4 - PREPAID EXPENSES, RELATED PARTY

As of September 30, 2014 and December 31, 2013 there were $289,590 and $76,032 of prepaid expenses in the company.  $275,279 of the prepaid expenses as of September 30, 2014 relate to shares issued to consultants which will be expensed over the respective term of the contract and warrant agreement.  See Note 8 for details on the shares and warrants issued.

As of September 30, 2014, there were $231,508 of related party prepaid expenses.  The prepaid expenses are made up of prepaid insurance which is being expensed through November 30, 2014 for insurance coverage paid for in 2013, which the policy period covers the company through November 30, 2014.  The Company deems this to be a related party expense as the prior owners of Quest Solution, Inc. are the controlling shareholders of the insurance company.  As of January 1, 2014, the Company will not be renewing any of these policies once they expire.  In the nine months ended September 30, 2014, $1,041,784 was expensed in cost of goods sold, related party.

XML

Notes Payable Disclosure: Schedule of Notes Payable (Tables)

3 Months Ended

Sep. 30, 2014

Tables/Schedules

Schedule of Notes Payable

	September 30,		December 31,
	2014		2013
Note payable - acquisition of Quest	$	14,406,250	$	--
Note payable - related party		834,960		--
Note payable related to license agreement - canceled January 2014		--		2,000,000
Total notes payable		15,241,210		2,000,000
Less: current portion		(3,990,210)		(25,000)
Total long-term notes payable	$	11,251,000	$	1,975,000

XML

Acquisition of Quest Solution, Inc. Disclosure: Schedule of Assets Acquired and Liabilities Assumed (Tables)

3 Months Ended

Sep. 30, 2014

Tables/Schedules

Schedule of Assets Acquired and Liabilities Assumed

Cash	$	1,950,121
Accounts receivable, net		3,444,744
Prepaid expenses, related party		1,273,292
Note receivable, related party		688,677
Other assets		196,794
Goodwill		13,429,857
Accounts payable and accrued liabilities		(4,983,485)
Total purchase price allocated	$	16,000,000

XML

Related Party Transactions: Schedule of Related Party Transactions (Tables)

3 Months Ended

Sep. 30, 2014

Tables/Schedules

Schedule of Related Party Transactions

	September 30,		December 31,
	2014		2013
Note payable - acquisition of Quest	$	14,406,250	$	--
Note payable - related party		834,960		--
Note payable related to license agreement - canceled January 2014		--		2,000,000
Total notes payable		15,241,210		2,000,000
Less: current portion		(3,990,210)		(25,000)
Total long-term notes payable	$	11,251,000	$	1,975,000

XML

Acquisition of Quest Solution, Inc. Disclosure (Details) (USD $)	Jan. 10, 2014
Details
Purchase price	$ 16,000,000
Promissory notes issued to shareholders of acquired company	4,969,000
Additional promissory notes issued to shareholders of acquired company	$ 11,031,000

XML

Interest and Loan Receivable

3 Months Ended

Sep. 30, 2014

Notes

Interest and Loan Receivable

NOTE 3 - INTEREST AND LOAN RECEIVABLE

Concurrent with the company entering into a line of credit agreement for production in 2013, the Company entered into a corresponding line of credit with its supply chain related to the production of the liquor brands.  The line of credit for the importer is $100,000, which will bear interest at 20% of funds advanced.  The line of credit was guaranteed by the importer as well as the owner of the import company, personally. As of September 30, 2014 and December 31, 2013, the balance of the loan receivable was $0 and $78,733.  This loan was settled during first quarter 2014 and the line of credit was closed.

XML

Acquisition of Quest Solution, Inc. Disclosure: Schedule of Assets Acquired and Liabilities Assumed (Details) (USD $)	Jan. 10, 2014
Total purchase price allocated	$ 16,000,000
Assets acquired, Cash
Business Acquisition, Purchase Price Allocation, Assets Acquired	1,950,121
Assets acquired, Accounts Receivable
Business Acquisition, Purchase Price Allocation, Assets Acquired	3,444,744
Assets acquired, Prepaid expenses
Business Acquisition, Purchase Price Allocation, Assets Acquired	1,273,292
Assets acquired, Note receivable
Business Acquisition, Purchase Price Allocation, Assets Acquired	688,677
Assets acquired, Other assets
Business Acquisition, Purchase Price Allocation, Assets Acquired	196,794
Assets acquired, Goodwill
Business Acquisition, Purchase Price Allocation, Assets Acquired	13,429,857
Liabilities acquired, Accounts payable and accrued liabilities
Business Acquisition, Purchase Price Allocation, Liabilities Assumed	$ (4,983,485)

XML

Related Party Transactions (Details) (USD $)	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2013
Accrued payroll, related parties	$ 180,000	$ 45,000
Accounts payable, related parties	15,678	42,000
Interest expense recorded	0		70,996
CEO loans
Due to related parties	51,456
Officer, company expenses
Due to related parties	$ 50,000

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Sep. 30, 2014	Dec. 31, 2013
Current assets
Cash	$ 1,584,699	$ 13,302
Accounts receivable	4,505,617	1,559
Inventory	63,552
Prepaids	289,590	76,032
Prepaids - related party	231,508
Loan receivable		78,733
Note receivable	500	5,000
Interest receivable		18,262
Total current assets	6,675,466	192,888
Other Assets
Deposits	4,400	950
Fixed assets, net	69,530
Goodwill	14,691,372
Intangibles, net	469,214
License agreement		2,212,400
Total other assets	15,234,516	2,213,350
Total assets	21,909,982	2,406,238
Current liabilities
Accounts payable and accrued liabilities	4,949,817	278,010
Accounts payable and accrued liabilities - related party	15,678	42,000
Accrued payroll - related party	180,000	45,000
Advances payable - related party	101,456	32,442
Accrued payroll and sales tax	413,670
Other liabilities	755,344
Loan payable	10,000	20,000
Line of credit		97,491
Current portion of note payable, related party	3,155,250
Note payable, related party	834,960
Current portion of long-term convertible debt		25,000
Total current liabilities	10,416,175	539,943
Long-term liabilities
Note payable	11,251,000
Convertible note payable		1,975,000
Total long-term liabilities	11,251,000	1,975,000
Total liabilities	21,667,175	2,514,943
Stockholders' equity (deficit)
Preferred stock value	500	3,500
Common stock value	33,710	34,935
Unamortized stock-based compensation		(23,400)
Common stock unissued value		360
Additional paid-in capital	17,205,399	16,919,705
Accumulated deficit	(16,996,802)	(17,043,805)
Total stockholders' equity (deficit)	242,807	(108,705)
Total liabilities and stockholders' equity (deficit)	$ 21,909,982	$ 2,406,238

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Basis of Presentation

3 Months Ended

Sep. 30, 2014

Notes

Basis of Presentation

NOTE 1 - BASIS OF PRESENTATION

The interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles 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.

These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2013 and notes thereto included in the Company's Form 10-K. The Company follows the same accounting policies in the preparation of interim reports.

Operating results for the three and nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the year ended December 31, 2014.

Summary of Significant Accounting Policies

This summary of significant accounting policies of Quest Solution, Inc. is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management who is responsible for the integrity and objectivity of the financial statements. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements.

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the 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 revenue and expenses during the reporting period. Actual results could differ from those estimates.

Cash

Cash consists of petty cash, checking, savings, and money market accounts.  For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of September 30, 2014 and December 31, 2013.

The Company maintains its cash in bank deposit accounts which, at times, may exceed federal insured limits.

Accounts Receivable

Accounts receivable are carried at their estimated collectible amounts. The Company provides allowances for uncollectible accounts receivable equal to the estimated collection losses that will be incurred in collection of all receivables. Accounts receivable are periodically evaluated for collectability based on past credit history with customers and their current financial condition. The Company’s management determines which accounts are past due and if deemed uncollectible, the Company charges off the receivable in the period the determination is made. The Company generally requires no collateral to secure its ordinary accounts receivable.

Property and Equipment

Property and equipment are stated at cost and depreciated using both straight-line and accelerated methods over estimated useful lives ranging from 3 to 15 years. Upon disposition of property and equipment, related gains and losses are recorded in operations. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expenses as incurred.

Shipping and Handling Costs

The Company classifies shipping and handling costs as operating expenses in the statements of income.

Advertising

The Company generally expenses advertising costs as incurred.

Inventory

Substantially all inventory consists of finished goods and are valued based upon first-in first-out ("FIFO") cost, not in excess of market. The determination of whether the carrying amount of inventory requires a write-down is based on a detailed evaluation of inventory relative to any potential slowing moving products or discontinued items as well as the market conditions for the specific inventory items.

Depreciation and amortization

Depreciation and amortization expense primarily consists of the non-cash write-down of tangible and intangible assets over their expected economic lives. We expect this expense to continue to grow in absolute dollars and potentially as a percentage of revenue as we continue to grow and incur capital expenditures to improve our technological infrastructure and acquire assets through potential future acquisitions.

Revenue Recognition

Recurring technology and services revenue consists of subscription-based fees, software subscription license fees, software maintenance fees and hosting fees related to the use of our solution to manage our customers' communications expenses, as well as fees for perpetual software licenses and professional services and products sold.

We recognize revenue when persuasive evidence of an arrangement exists, pricing is fixed and determinable, collection is reasonably assured and delivery or performance of service has occurred. Recurring technology and services subscription-based fees, software subscription license fees, software maintenance fees and hosting fees are recognized ratably over the term of the period of service. The subscription-based services we provide include help desk, staging, carrier activations and provisioning.

Sales revenue is recognized upon the shipment of merchandise to customers.  The Company recognizes revenues from software sales when software products are shipped.

Software license fees consist of fees paid for a perpetual license agreement for our technology, which are recognized in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC 605, Software Revenue Recognition, as amended.

Professional services related to the implementation of our software products, which we refer to as consulting services, are generally performed on a fixed fee basis under separate service arrangements. Consulting services revenue is recognized as the services are performed by measuring progress towards completion based upon either costs or the achievement of certain milestones.

Fair Value of Financial Instruments

The Company’s financial instruments include cash, accounts receivable, accounts payable, and notes payable. All instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at September 30, 2014 and December 31, 2013. The Company did not engage in any transaction involving derivative instruments.

As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The three levels of the fair value hierarchy are described below:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability;

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

Recent pronouncements

The Company’s management has reviewed all of the FASB’s Accounting Standard Updates through September 30, 2014 and has concluded that none will have a material impact on the Company’s financial statements. Management does not believe that any other recently issued but not yet effective accounting pronouncements, if adopted, would have an effect on the accompanying consolidated financial statements.

Goodwill

We test our goodwill and other indefinite-lived intangible assets for impairment annually, or, under certain circumstances, more frequently, such as when events or circumstances indicate there may be impairment. We are required to write down the value of goodwill only when our testing determines the recorded amount of goodwill exceeds the fair value. Our annual measurement date for testing goodwill impairment is December 31, at which date we test our reporting units, which is currently our ownership in Quest Solution, Inc.

As the acquisition occurred during the nine months ended September 30, 2014 we are in the process of completing our goodwill impairment testing by considering multiple avenues inclusive of a qualitative assessment, a market approach and a discounted cash flow method. The market approach method includes the use of comparable multiples of publicly traded companies whose services are comparable to ours. The discounted cash flow method is based on the present value of projected cash flows and a terminal value, which represents the expected normalized cash flows of the segments beyond the cash flows from the discrete projection period.

We have not yet completed our impairment testing. However, based on our analysis performed thus far with respect to these segments as described above, we believe that the goodwill related to the Quest Solution acquisition was not impaired as of September 30, 2014.

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Intellectual Property, Note (Details) (USD $)	9 Months Ended		9 Months Ended
	Sep. 30, 2014	Jan. 10, 2014 Le Flav Spirits	Sep. 30, 2014 Licenses for technology
Common stock returned		1,765,000
Promissory note cancelled		$ 2,000,000
Annual consulting contract cancelled		65,000
Warrants cancelled and returned		2,000,000
Acquisition of license agreements	$ 150,000		$ 150,000

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Basis of Presentation: Inventory, Policy (Policies)

3 Months Ended

Sep. 30, 2014

Policies

Inventory, Policy

Inventory

Substantially all inventory consists of finished goods and are valued based upon first-in first-out ("FIFO") cost, not in excess of market. The determination of whether the carrying amount of inventory requires a write-down is based on a detailed evaluation of inventory relative to any potential slowing moving products or discontinued items as well as the market conditions for the specific inventory items.

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Line of Credit, Note (Details) (USD $)	Dec. 31, 2013	Sep. 30, 2014 Line of credit agreement, Received	Dec. 31, 2013 Line of credit agreement, Received	Mar. 22, 2013 Line of credit agreement, Received	Sep. 30, 2014 Line of credit agreement, Quest Solution	Dec. 31, 2011 Line of credit agreement, Quest Solution
Line of credit amount				$ 100,000		$ 750,000
Line of credit, balance	$ 97,491	$ 0	$ 97,491		$ 0

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Basis of Presentation: Revenue Recognition (Policies)

3 Months Ended

Sep. 30, 2014

Policies

Revenue Recognition

Revenue Recognition

Recurring technology and services revenue consists of subscription-based fees, software subscription license fees, software maintenance fees and hosting fees related to the use of our solution to manage our customers' communications expenses, as well as fees for perpetual software licenses and professional services and products sold.

We recognize revenue when persuasive evidence of an arrangement exists, pricing is fixed and determinable, collection is reasonably assured and delivery or performance of service has occurred. Recurring technology and services subscription-based fees, software subscription license fees, software maintenance fees and hosting fees are recognized ratably over the term of the period of service. The subscription-based services we provide include help desk, staging, carrier activations and provisioning.

Sales revenue is recognized upon the shipment of merchandise to customers.  The Company recognizes revenues from software sales when software products are shipped.

Software license fees consist of fees paid for a perpetual license agreement for our technology, which are recognized in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC 605, Software Revenue Recognition, as amended.

Professional services related to the implementation of our software products, which we refer to as consulting services, are generally performed on a fixed fee basis under separate service arrangements. Consulting services revenue is recognized as the services are performed by measuring progress towards completion based upon either costs or the achievement of certain milestones.

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Acquisition of Quest Solution, Inc. Disclosure

3 Months Ended

Sep. 30, 2014

Notes

Acquisition of Quest Solution, Inc. Disclosure

NOTE 2 - ACQUISITION OF QUEST SOLUTION, INC.

On January 10, 2014, the Company completed the purchase of Quest Solution, Inc. ("Quest"), an Oregon corporation in the technology, software, and mobile data collection systems business.

The purchase price for Quest was $16,000,000.

The consideration given to the shareholders of Quest Solution, Inc. were as follows:

A.  A promissory note for $4,969,000, which payments are to be a minimum of 45.0% of the cash earned from EBITDA of Quest Solution, Inc. during the prior quarter.  Once the Holder has received $3,375,000, the principal and interest payments on the promissory note are to be a minimum of 22.5% of the cash earned from EBITDA of Quest Solution, Inc. during the prior quarter. 

The balance of the promissory note is expected to be paid before February 18, 2016, or twenty five (25) months from the date of execution of this agreement. Should the cash flow and payments from EBITDA during the term of this agreement not be sufficient to pay off the loan prior to its maturation, the loan will extend for additional twelve (12) months periods till paid off. 

The holder of the note is permitted to convert up $1,594,000 of the Promissory Note into common shares of the Company at a ratio of one share for every $1.00 of promissory note converted.  This conversion feature is non-transferrable without written consent from the Company. 

B.  A promissory note for $11,031,000, which payments are to be payments on the promissory  note are  to  be a minimum of forty five percent (45%) of the cash earned from EBITDA of Quest Solution, Inc. during the prior quarter.  Once the first promissory note ($4.97mm) has received $3,375,000, the principal and interest payments on this promissory note are to be a minimum of 67.5% of the cash earned from EBITDA of Quest Solution, Inc. during the prior quarter. 

The balance of the promissory note is expected to be paid before January 18, 2017, or three (3) years from the date of execution of this agreement.  Should the cash flow and payments from EBITDA during the term of this agreement not be sufficient to pay off the loan prior to its maturation, the loan will extend for additional twelve (12) months periods till paid off. 

The holders of the notes are permitted to convert up to $4,781,000 of the Promissory Note into common shares of the Company at a ratio of one share for every $1.00 of promissory note converted. This conversion feature is non-transferrable without written consent from the Company. 

The prior owners of Quest shall retain a security interest in the subsidiary until the promissory note is satisfied. 

In accordance with ASC 805-10-25-13, the following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition and the preliminary allocation of the purchase price to the fair value of net assets acquired:

Cash	$	1,950,121
Accounts receivable, net		3,444,744
Prepaid expenses, related party		1,273,292
Note receivable, related party		688,677
Other assets		196,794
Goodwill		13,429,857
Accounts payable and accrued liabilities		(4,983,485)
Total purchase price allocated	$	16,000,000

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BALANCE SHEETS (parenthetical) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Balance Sheet
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	25,000,000	25,000,000
Preferred stock, shares outstanding	500,000	3,500,000
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares outstanding	33,710,416	34,935,416

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Basis of Presentation: Cash, Policy (Policies)

3 Months Ended

Sep. 30, 2014

Policies

Cash, Policy

Cash

Cash consists of petty cash, checking, savings, and money market accounts.  For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of September 30, 2014 and December 31, 2013.

The Company maintains its cash in bank deposit accounts which, at times, may exceed federal insured limits.

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Document and Entity Information	3 Months Ended
	Sep. 30, 2014
Document and Entity Information
Entity Registrant Name	QUEST SOLUTION, INC.
Document Type	10-Q
Document Period End Date	Sep. 30, 2014
Amendment Flag	false
Entity Central Index Key	0000278165
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding	33,710,416
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3

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Basis of Presentation: Accounts Receivable, Policy (Policies)

3 Months Ended

Sep. 30, 2014

Policies

Accounts Receivable, Policy

Accounts Receivable

Accounts receivable are carried at their estimated collectible amounts. The Company provides allowances for uncollectible accounts receivable equal to the estimated collection losses that will be incurred in collection of all receivables. Accounts receivable are periodically evaluated for collectability based on past credit history with customers and their current financial condition. The Company’s management determines which accounts are past due and if deemed uncollectible, the Company charges off the receivable in the period the determination is made. The Company generally requires no collateral to secure its ordinary accounts receivable.

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CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Revenue
Gross sales	$ 9,120,927	$ 804	$ 26,287,892	$ 1,559
Less sales returns, discounts and allowances	(36,465)		(147,024)
Oil revenues				514
Total Revenue	9,084,462	804	26,140,868	2,073
Cost of goods sold
Cost of goods sold	7,072,614		20,086,597
Cost of goods sold, related party	347,261		1,041,784
Total costs of goods sold	7,419,875		21,128,381
Operating expenses
General and administrative	222,857	875	723,447	14,111
Salary and employee benefits	1,252,445		3,895,458
Depreciation and amortization	7,067		17,889
Stock compensation	54,130	135,878	84,215	192,663
Professional fees	110,005	3,500	377,769	238,374
Total operating expenses	1,646,504	140,253	5,098,778	445,148
Income (loss) from operations	18,083	(139,449)	(86,291)	(443,075)
Other income (expenses):
Gain on debt settlement	29,999		181,948	19,195
Loss on license settlement			(93,578)
Loss on note receivable settlement			(18,995)
Interest expense	(375)	(41,907)	(1,375)	(103,878)
Other income	15,079		65,294
Total other income (expenses)	44,703	(41,907)	133,294	(84,683)
Net income (loss)	$ 62,786	$ (181,356)	$ 47,003	$ (527,758)
Net income (loss) per share - basic and diluted	$ 0	$ (0.01)	$ 0	$ (0.02)
Weighted average number of common shares outstanding - basic	33,660,416	25,424,824	33,334,616	24,678,868
Weighted average number of common shares outstanding - diluted	50,445,416	24,470,380	50,119,616	24,297,602

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Notes Payable Disclosure

3 Months Ended

Sep. 30, 2014

Notes

Notes Payable Disclosure

NOTE 7 - NOTES PAYABLE

Notes and loans payable consisted of the following:

	September 30,		December 31,
	2014		2013
Note payable - acquisition of Quest	$	14,406,250	$	--
Note payable - related party		834,960		--
Note payable related to license agreement - canceled January 2014		--		2,000,000
Total notes payable		15,241,210		2,000,000
Less: current portion		(3,990,210)		(25,000)
Total long-term notes payable	$	11,251,000	$	1,975,000

As of September 30, 2014 and 2013, the Company record interest expense in connection with these notes in the amount of $0 and $70,996, respectively.

The $834,960 related party note has no definitive due date so it has been classified as current liabilities.

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Line of Credit, Note

3 Months Ended

Sep. 30, 2014

Notes

Line of Credit, Note

NOTE 6 - LINE OF CREDIT

On March 22, 2013, the Company executed a line of credit agreement with a third party for $100,000 to be used as purchase order financing for the production of liquor brands.  The balance at September 30, 2014 and December 31, 2013 was $0 and $97,491.  This line of credit was closed during the first quarter of 2014.

During December of 2011, Quest Solution acquired a $750,000 revolving line of credit from Wells Fargo Bank. Borrowings are collateralized by accounts receivable, equipment and inventory owned by the Company as well as a personal guarantee from the two shareholders.  This line of credit expired September 15, 2014. Monthly interest only payments are required with the principal portion due at maturity. The balance at September 30, 2014 was $0.  Interest is charged at a rate of prime plus 0.5% (currently 3.75%), with a floor rate of 4.5%.

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Basis of Presentation: Depreciation and Amortization, Policy (Policies)

3 Months Ended

Sep. 30, 2014

Policies

Depreciation and Amortization, Policy

Depreciation and amortization

Depreciation and amortization expense primarily consists of the non-cash write-down of tangible and intangible assets over their expected economic lives. We expect this expense to continue to grow in absolute dollars and potentially as a percentage of revenue as we continue to grow and incur capital expenditures to improve our technological infrastructure and acquire assets through potential future acquisitions.

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Basis of Presentation: Property and Equipment, Policy (Policies)

3 Months Ended

Sep. 30, 2014

Policies

Property and Equipment, Policy

Property and Equipment

Property and equipment are stated at cost and depreciated using both straight-line and accelerated methods over estimated useful lives ranging from 3 to 15 years. Upon disposition of property and equipment, related gains and losses are recorded in operations. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expenses as incurred.

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Subsequent Events

3 Months Ended

Sep. 30, 2014

Notes

Subsequent Events

NOTE 10 - SUBSEQUENT EVENTS

The Company has evaluated subsequent events in accordance with ASC 855 through the date in which it has made its financial statements available, and has identified no significant reportable events through that date.

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Stockholders' Deficit, Note

3 Months Ended

Sep. 30, 2014

Notes

Stockholders' Deficit, Note

NOTE 8 - STOCKHOLDERS' DEFICIT

As of September 30, 2014, there were 33,710,416 shares of common stock outstanding, and 500,000 preferred shares outstanding.

Preferred Stock

As of September 30, 2014, there were 25,000,000 preferred shares authorized and 500,000 preferred shares outstanding.  The board of directors had previously set the voting rights for the preferred stock at 1 share of preferred to 250 common shares.

Common Stock

In January 2014, concurrent with the cancellation of the license agreement, the Company cancelled two consulting agreements previously entered into during April 2013, in which shares previously issued were returned in full to the Company. A total of 1,765,000 shares valued at $105,900 were returned and canceled in full settlement.

On March 1, 2014, the Company issued a total of 100,000 shares valued at $41,000 to Douglas Zorn, the Company’s then Chief Operating Officer for services. The shares were fully earned and non assessable as of March 31, 2014. In addition the Company issued the same consultant a total of 900,000 warrants valued at $368,878. The value of these warrants estimated by using the Black-Scholes option pricing model with the following assumptions: exercise price of $1.50, term of 3 years; risk free interest rate of 0.69%; dividend yield of 0% and expected volatility of 433%. As of September 30, 2014 the agreement with this officer has been mutually cancelled and Mr. Zorn’s contract as Chief Operating Officer ceased at the end of August 2014.

During the first quarter of 2014, the Company issued warrants to executives of Quest Solution, Inc. with the following milestones: 

When the Company reaches $35,000,000 in sales, 5,000,000 warrants at $1.00 per share vest and become exercisable. These warrants expire on January 9, 2016. 

When the Company makes it to the NASDAQ or AMEX or larger exchange, 2,000,000 warrants at $3.00 per share vest and become exercisable. These warrants expire on January 9, 2017.

Additionally, when the Company reaches $40,000,000 in sales, a 2,000,000 share bonus is given to the executives. This expires January 8, 2017.

On May 9, 2014, the company issued a total of 240,000 shares valued at $124,800 for marketing services.

On August 8, 2014, the company issued 250,000 shares of stock related to warrants which were exercised.

On September 25, 2014, the company sold 50,000 shares valued at $25,000.

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Related Party Transactions

3 Months Ended

Sep. 30, 2014

Notes

Related Party Transactions

NOTE 9 - RELATED PARTY TRANSACTIONS

As of September 30, 2014, the Company had $180,000 in accrued payroll payable to the Company’s current officers.

As of September 30, 2014, the Company owes $51,456 in related party loans to the CEO who has made loans to the Company for expenses as well as $15,678 to an entity the CEO owns which lent the Company money.

As of September 30, 2014, an officer advanced $50,000 in relation to company expenses.

As mentioned in Note 7, notes and loans payable consisted of the following:

	September 30,		December 31,
	2014		2013
Note payable - acquisition of Quest	$	14,406,250	$	--
Note payable - related party		834,960		--
Note payable related to license agreement - canceled January 2014		--		2,000,000
Total notes payable		15,241,210		2,000,000
Less: current portion		(3,990,210)		(25,000)
Total long-term notes payable	$	11,251,000	$	1,975,000

As of September 30, 2014 and 2013, the Company record interest expense in connection with these notes in the amount of $0 and $70,996, respectively.

The $834,960 related party note has no definitive due date so it has been classified as current liabilities.

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Basis of Presentation: Use of Estimates (Policies)

3 Months Ended

Sep. 30, 2014

Policies

Use of Estimates

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the 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 revenue and expenses during the reporting period. Actual results could differ from those estimates.

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Prepaid Expenses, Related Party, Note (Details) (USD $)	3 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2014	Dec. 31, 2013
Details
Prepaid expenses	$ 289,590	$ 289,590	$ 76,032
Related party prepaid expenses	231,508	231,508
Related party cost of goods sold	$ 347,261	$ 1,041,784

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Basis of Presentation: Advertising, Policy (Policies)

3 Months Ended

Sep. 30, 2014

Policies

Advertising, Policy

Advertising

The Company generally expenses advertising costs as incurred.

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Basis of Presentation: Recent Pronouncements (Policies)

3 Months Ended

Sep. 30, 2014

Policies

Recent Pronouncements

Recent pronouncements

The Company’s management has reviewed all of the FASB’s Accounting Standard Updates through September 30, 2014 and has concluded that none will have a material impact on the Company’s financial statements. Management does not believe that any other recently issued but not yet effective accounting pronouncements, if adopted, would have an effect on the accompanying consolidated financial statements.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (USD $)	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Cash flows from operating activities:
Net income (loss)	$ 47,003	$ (527,758)
Adjustments to reconcile net loss to net cash used by operating activities:
Stock based compensation - shares for services	67,836	63,281
Depreciation and amortization	(1,449)
Loss on cancelled shares	(105,901)
Gain on license	93,578
Loss on settlement of debt	(37,491)
Loss on note receivable settlement	18,995
Interest expense		118,994
Bad debt expense	1,559
Warrants granted	119,892	148,150
Gain on extinguishment of debt		(19,196)
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable	(1,060,873)	(1,559)
(Increase) decrease in prepaid		(16,266)
(Increase) decrease in prepaid, related party	1,041,784
(Increase) decrease in customer deposit	(45,267)
Increase / (decrease) in accounts payable and accrued liabilities	301,329	187,567
Increase / (decrease) in accounts payable and accrued liabilities, related party	(26,322)	14,088
Increase / (decrease) in salary payable, related party	135,000
Increase / (decrease) in other liabilities	455,619
Increase / (decrease) in advances from related party	69,014
Net cash provided (used) by operating activities	1,074,306	(32,699)
Cash flows from investing activities:
(Proceeds from) cash from acquisition	1,950,120
(Proceeds from) change in other assets	3,221
(Payments for) license agreements	150,000
(Purchase) of notes receivable		88,810
Net cash provided (used) by investing activities	1,803,341	(88,810)
Cash flows from financing activities:
Increase in bank overdraft		2,814
Proceeds from shares sold	25,000
Proceeds from loan receivable	78,000
Proceeds from notes receivable	4,500
Proceeds (payment) on line of credit	(60,000)	89,640
Proceeds (payment) from notes/loans payable	(1,343,750)	20,000
Payments on loans, related party		3,000
Payments on loans	10,000
Proceeds from loan, related party		12,000
Net cash provided (used) by financing activities	(1,306,250)	121,454
Net increase (decrease) in cash	1,571,397	(55)
Cash, beginning of period	13,302	55
Cash, end of period	1,584,699
Cash paid for interest
Cash paid for taxes
Supplementary cash flow information
Stock issued for services	124,800	93,850
Warrants issued	591,761	148,150
Stock and warrants for license		212,400
Note payable for purchase of intangibles	$ 450,000	$ 2,000,000

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Intellectual Property, Note

3 Months Ended

Sep. 30, 2014

Notes

Intellectual Property, Note

NOTE 5 - INTELLECTUAL PROPERTY

On February 25, 2013, the Company announced the acquisition of a license agreement for the promotion of a liquor line. In consideration for the acquisition, the Company agreed to issue 360,000 shares of its common stock fair valued at $32,400, warrants to purchase up to two million (2,000,000) shares of the Company’s common stock valued at $180,000 utilizing the Black-Scholes Model, and a convertible promissory note in the amount of $2,000,000. Pursuant to the terms of the agreement, the warrants were subject to specific vesting requirements related to sales benchmarks whereas for each 5,000 cases sold the seller will receive 500,000 fully vested warrants exercisable at a rate of $1.00 per share for a term of five years. 

On January 10, 2014, the Company came to terms on a settlement with its prior investment in the license and the related liquor brands.  The Company concurrently canceled its consulting contract related to the liquor line and received back 1,765,000 of the shares that had previously been issued in conjunction with this venture.   This cancellation also removed the $2,000,000 promissory note related to the acquisition, as well as the $65,000 annual consulting contract with the Consultant and the corresponding 2,000,000 warrants issued as well.  As of September 30, 2014, there are no amounts remaining due to this transaction.

During the period ending September 30, 2014, the company acquired four different licenses for technology.  The licenses acquired are for (1) re-enforcing steel detection, (2) gun barrel detection, (3) air frame inspection, and (4) mining belt guard inspection.  The cost of the first three licenses was $150,000 each with a 5% royalty on sales.  The term of these licenses is 15 years each.  A fourth license was acquired with minimum purchase requirements stated in the contract. 

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Basis of Presentation: Goodwill, Policy (Policies)

3 Months Ended

Sep. 30, 2014

Policies

Goodwill, Policy

Goodwill

We test our goodwill and other indefinite-lived intangible assets for impairment annually, or, under certain circumstances, more frequently, such as when events or circumstances indicate there may be impairment. We are required to write down the value of goodwill only when our testing determines the recorded amount of goodwill exceeds the fair value. Our annual measurement date for testing goodwill impairment is December 31, at which date we test our reporting units, which is currently our ownership in Quest Solution, Inc.

As the acquisition occurred during the nine months ended September 30, 2014 we are in the process of completing our goodwill impairment testing by considering multiple avenues inclusive of a qualitative assessment, a market approach and a discounted cash flow method. The market approach method includes the use of comparable multiples of publicly traded companies whose services are comparable to ours. The discounted cash flow method is based on the present value of projected cash flows and a terminal value, which represents the expected normalized cash flows of the segments beyond the cash flows from the discrete projection period.

We have not yet completed our impairment testing. However, based on our analysis performed thus far with respect to these segments as described above, we believe that the goodwill related to the Quest Solution acquisition was not impaired as of September 30, 2014.

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Notes Payable Disclosure (Details) (USD $)	Sep. 30, 2014	Sep. 30, 2013
Details
Interest expense recorded	$ 0	$ 70,996

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Basis of Presentation: Shipping and Handling Costs (Policies)

3 Months Ended

Sep. 30, 2014

Policies

Shipping and Handling Costs

Shipping and Handling Costs

The Company classifies shipping and handling costs as operating expenses in the statements of income.