The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
Notes to Unaudited Condensed Consolidated Financial Statements
Note 1 – Business
Buscar Company. ("Buscar", "we", "us", "our", the "Company") was incorporated in Nevada as Cascade Springs Ltd. on January 19, 2010. In 2012, we amended our Articles of Incorporation to change our name to Colorado Gold Mines, Inc. On June 18, 2014, changed our name to Buscar Oil, Inc. On May 19, 2015, the Company changed it's name to Buscar Company. On April 22, 2016, Buscar incorporated a wholly-owned California subsidiary, Buscar Stables, Inc. ("Buscar Stables"). Buscar is domiciled in the state of Colorado, and its corporate headquarters are located in Los Angeles, CA. The Company selected March 31 as its fiscal year end.
The Company's primary business is the breeding and selling of thoroughbreds, through its wholly owned subsidiary Buscar Stables. The Company will breed in California. The Company expects that it will need to raise $5,500,000 to fully execute its breeding program. The breeding program consists of the Company acquiring broodmares and paying stud fees to farms who own the studs. The breeding season typically runs from February through May. Under the rules of racing, every foal (a baby thoroughbred) is given a birthday of January 1 of the year of its birth regardless of its actual date of birth. The Company will generate revenue from its breeding operations through the sale of the foals and purse winnings from the foals the Company keeps. While the Company is building its breeding operations, the Company will own and manage thoroughbreds that will race in allowance or stakes races. This will allow the Company to begin to develop relationships with other owners and trainers for the benefit of its breeding operations.
Note 2 – Summary of Significant Accounting Policies
Basis of Presentation of Interim Financial Statements
The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. In our opinion, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending March 31, 2017. Notes to the interim unaudited condensed consolidated financial statements that would substantially duplicate the disclosures contained in the audited consolidated financial statements for fiscal year ended March 31, 2016 have been omitted. This report should be read in conjunction with the audited consolidated financial statements and the footnotes thereto for the fiscal year ended March 31, 2016 included in the Company's Form 10-K as filed with the Securities and Exchange Commission on July 15, 2016.
Consolidation Policy
For September 30, 2016, the unaudited condensed consolidated financial statements of the Company include the accounts of the Company and its wholly owned subsidiary, Buscar Stables, Inc. All significant intercompany balances and transactions have been eliminated in consolidation.
Thoroughbreds
The Company depreciates thoroughbreds via straight-line depreciation over its useful life of 3 years.
The thoroughbreds are stated at the lower of cost or market value. The cost was deemed to be the best evidence of market value and the company's thoroughbreds were therefore stated at cost. Costs of maintaining horses prior to maturity and entered into a race or disposition are capitalized as additional costs of the horse. When a horse is sold or otherwise disposed of, the cost and associated accumulated depreciation are removed from the accounts and the resulting gain or loss is recognized in the statement of operations.
The company evaluates the recoverability of its Long Term Assets in accordance with ASC topic 360, which requires recognition of impairments of long lived assets in the event an indication of impairment exists and the net book value of such assets exceeds the expected future value net cash flows attainable to such assets. The Company did not recognize any impairment losses for any periods presented.
|
|
September 30,
2016
|
|
|
March 31,
2016
|
|
Thoroughbreds
|
|
$
|
104,858
|
|
|
$
|
-
|
|
Accumulated depreciation
|
|
|
(7,788
|
)
|
|
|
-
|
|
Thoroughbreds - net
|
|
|
97,070
|
|
|
|
-
|
|
Thoroughbred Revenue Recognition
The Company pursues opportunities to realize revenues from a principal activity: breeding the thoroughbreds. It is the Company's policy that revenues and gains will be recognized in accordance with ASC Topic 605-10-25, "Revenue Recognition." Under ASC Topic 605-10-25, revenue earning activities such as selling the horses and the Company has substantially accomplished all it must do to be entitled to the benefits represented by the revenue. Gains or losses from the sale of the horses are recognized when the horse is sold, and the cost and associated accumulated depreciation are removed from the accounts and the resulting gain or loss is recognized in the statement of operations.
Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new pronouncements that have been issued that might have a material impact on its financial position or results of operations.
Note 3 – Going Concern
These unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year. Realization values may be substantially different from carrying values as shown and these unaudited condensed consolidated financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. At September 30, 2016, the Company had not yet achieved profitable operations, has accumulated losses of $17,058,127 since its inception, has a working capital of $233,165 and expects to incur further losses in the development of its business, all of which raise substantial doubt about the Company's ability to continue as a going concern. The Company's ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available or on terms acceptable to the Company.
Note 4 – Due to Related Parties
During the six months ended September 30, 2016, the Company borrowed a total amount of $191,796 from a shareholder, who is also married to our CEO of the Company, and repaid $88,430 for payments of operating expenses and purchase of thoroughbreds. As of September 30, 2016, the Company recorded due to a shareholder of $130,166.
During the six months ended September 30, 2016, the Company repaid $7,500 to a shareholder, who is also a former officer of the Company. As of September 30, 2016, the Company recorded due to shareholder of $5,871 for payments of operating expense on behalf of the Company.
As of September 30, 2016 and March 31, 2016, the Company owed related parties $136,037 and $40,171, respectively.
Note 5 – Commitments and Contingencies
As of September 30, 2016, the Company had a total of $313,792 of outstanding liabilities. As of this date, the Company recognized $177,270 of outstanding liabilities related to previous Company directors, Robert Sawatsky and Kelly Fielder. The Company's legal counsel believes that the outstanding liabilities are expected to be paid back to the previous Company directors, Robert Sawatsky and Kelly Fielder, who had originally loaned money to the Company. However, there has been no resolution of this event.
Note 6 – Equity
On July 7, 2016, the Company filed Amended and Restated Articles of Incorporation with the Nevada Secretary of State to amend the par value of preferred stock and common stock to $0.0001. Preferred share and common share amounts in these financial statements have been retroactively adjusted to reflect this change in par value.
Preferred Stock
The Company has authorized 50,000,000 preferred shares with a par value of $0.0001 per share. Board of Directors are authorized to divide the authorized shares of Preferred Stock into one or more series, each of which shall be so designated as to distinguish the shares thereof from the shares of all other series and classes.
Series A Preferred Stock
The Company has designated 10,000,000 preferred shares of Series A Preferred Stock with a par value of $0.0001 per share. As at September 30, 2016 and March 31, 2016, the Company had 8,000,000 shares of Series A Preferred Stock issued and outstanding.
Series B Preferred Stock
The Company has designated 10,000,000 preferred shares of Series B Preferred Stock with a par value of $0.0001 per share.
During the six months ended September 30, 2016, 10,000,000 shares of Series B Preferred Stock were issued to our CEO for the par value as there is no stated value.
During the six months ended September 30, 2016, 35,000 shares of Series B Preferred Stock were converted at rate of 1 preferred share to 400 common shares, resulting in the issuance of 14,000,000 shares of common stock, for a value of $1,400, of which $1,397 was recorded as a deemed dividend.
As at September 30, 2016 and March 31, 2016, the Company had 9,965,000 and 0 shares of Series B Preferred Stock issued and outstanding, respectively.
Common Stock
The Company has authorized 500,000,000 shares of common stock with a par value of $0.0001 per share.
During the six months ended September 30, 2016, the Company issued common shares, as follows:
·
|
1,897,500 shares for services, with a fair value of $1,753,500 as compensation
|
|
|
·
|
500,643 shares were sold for cash for a consideration of $595,000
|
|
|
·
|
803 shares for rounding up adjustment of reverse split.
|
|
|
·
|
14,000,000 shares were issued for the conversion of 35,000 shares of Series B Preferred Stock.
|
As of September 30, 2016 and March 31, 2016, the Company had 16,771,321 and 372,375 shares of common stock issued and outstanding, respectively.
Note 7 – Subsequent events
On November 7, 2016, the Company began attending the Keeneland November sale. At the auction the Company acquired Milania (Hip 13) for $310,000 and Sweet Dreams (Hip 80) for $180,000. The Company acquired the mares through our bloodstock agents and owns 100% of each mare. The mares are the initial acquisition on the part of the company to build out its breeding division. Both mares are currently pregnant and expected to deliver in February or March 2017. The mares were transported from Keeneland (which is located in Keeneland, Kentucky) to a farm outside of Lexington, Kentucky. The Company’s goal is to sell the mares offspring at the Keeneland November 2017 and to stud the mares again in March/April 2017.
Milania (Hip 13) is carrying a colt sired by Pioneerof the Nile. She is expected to give birth in February or March 2017. Pioneerof the Nile is among the leading sires with 4 crops of racing age that includes the following: 329 foals, 174 starters, 16 black-type winners, 128 winners of 271 races and earnings of $19,914,401, including triple crown champion American Pharoah. Pioneerof the Nile’s colt weanlings have so far sold for an average of $360,000 in 2016. The Company expects to sell her offspring as a weanling at the 2017 November sale and stud her to a new sire in March 2017. Milania was sired by Bernardini who was a Champion 3-year-old colt who won $3,060,480 including the Preakness. Milania’s dam is Keeper Hill who won $1,661,281 and multiple stakes races including the Kentucky Oaks.