Consolidated SEC Viewer Rendering


Document and Entity Information

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Document and Entity Information - shares
9 Months Ended
Sep. 30, 2015
Nov. 12, 2015
Document and Entity Information:    
Entity Registrant Name ACQUIRED SALES CORP  
Document Type 10-Q  
Document Period End Date Sep. 30, 2015  
Amendment Flag false  
Entity Central Index Key 0001391135  
Current Fiscal Year End Date --12-31  
Entity Common Stock, Shares Outstanding   2,269,648
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 2015  
Document Fiscal Period Focus Q3  
Trading Symbol aqsp  

CONDENSED BALANCE SHEETS

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CONDENSED BALANCE SHEETS - USD ($)
Sep. 30, 2015
Dec. 31, 2014
Current Assets    
Cash and cash equivalents $ 84,322 $ 587,937
Prepaid expenses   7,985
Total Current Assets 84,322 595,922
Note receivable   602,500
Interest receivable   35,926
Total Assets 84,322 1,234,348
Current Liabilities    
Trade accounts payable 12,646 24,982
Total Liabilities $ 12,646 $ 24,982
Shareholders' Equity    
Preferred stock, $0.001 par value; 10,000,000 shares authorized; none outstanding    
Common stock, $0.001 par value; 100,000,000 shares authorized; 2,269,648 shares outstanding $ 2,270 $ 2,270
Additional paid-in capital 13,554,524 13,554,524
Accumulated deficit (13,485,118) (12,347,428)
Total Shareholders' Equity 71,676 1,209,366
Total Liabilities and Shareholders' Equity $ 84,322 $ 1,234,348

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical)

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
Sep. 30, 2015
Dec. 31, 2014
Statement of Financial Position    
Common Stock, par or stated value $ 0.001 $ 0.001
Common Stock, shares authorized 100,000,000 100,000,000
Common Stock, shares outstanding 2,269,648 2,269,648
Preferred Stock, par or stated value $ 0.001 $ 0.001
Preferred Stock, shares authorized 10,000,000 10,000,000
Preferred Stock, shares issued    
Preferred Stock, shares outstanding    

CONDENSED STATEMENTS OF OPERATIONS

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CONDENSED STATEMENTS OF OPERATIONS - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Income Statement        
Selling, General and Administrative Expense $ (52,944) $ (103,591) $ (366,181) $ (251,169)
Bad Debt Expense (835,277)   (835,277)  
Interest Income 17,726 16,094 61,501 16,094
Other Income   4,534 2,267 20,797
Loss from Continuing Operations (870,495) (82,963) (1,137,690) (214,278)
Gain (Loss) on Disposal of Discontinued Operations   74,605   74,605
Net Income (Loss) $ (870,495) $ (8,358) $ (1,137,690) $ (139,673)
Basic and Diluted Earnings (Loss) per Share        
Continuing Operations $ (0.38) $ (0.04) $ (0.50) $ (0.09)
Discontinued Operations 0 0.03 0 0.03
Net Income ( Loss) per Share $ (0.38) $ (0.01) $ (0.50) $ (0.06)

CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)

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CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) - USD ($)
Common Stock
Additional Paid-in Capital
Accumulated Deficit
Total
Stockholders' Equity beginning of period, Value at Dec. 31, 2013 $ 2,270 $ 8,410,295 $ (7,026,157) $ 1,386,408
Stockholders' Equity beginning of period, Shares at Dec. 31, 2013 2,269,648      
Net Income (Loss)     (139,673) (139,673)
Stockholders' Equity, end of period, Value at Sep. 30, 2014 $ 2,270   (7,165,830) 1,246,735
Stockholders' Equity, end of period, Shares at Sep. 30, 2014 2,269,648      
Stockholders' Equity beginning of period, Value at Dec. 31, 2014 $ 2,270 13,554,524 (12,347,428) 1,209,366
Stockholders' Equity beginning of period, Shares at Dec. 31, 2014 2,269,648      
Net Income (Loss)     (1,137,690) (1,137,690)
Stockholders' Equity, end of period, Value at Sep. 30, 2015 $ 2,270 $ 13,554,524 $ (13,485,118) $ 71,676
Stockholders' Equity, end of period, Shares at Sep. 30, 2015 2,269,648      

CONDENSED STATEMENTS OF CASH FLOWS

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CONDENSED STATEMENTS OF CASH FLOWS - USD ($)
9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Cash Flows from Operating Activities    
Net Income (Loss) $ (1,137,690) $ (139,673)
Adjustments to reconcile income (loss) to net cash used in operating activities:    
Bad debt expense 835,277  
Income from discontinued operations   (74,605)
Changes in operating assets and liabilities:    
Prepaid expenses 7,985 (7,985)
Accrued interest receivable (61,501) (16,094)
Accounts payable (12,336) 37,045
Net cash used in operating activities of continuing operations (368,265) (201,312)
Net cash provided by (used in) operating activities of discontinued operations   74,605
Net cash used in operating activities (368,265) (126,707)
Cash Flows from Investing Activities    
Proceeds from sale of discontinued operations, net of cash sold   1,000,000
Note Receivable (135,350) (602,500)
Net cash provided by investing activities (135,350) 397,500
Cash Flow from Financing Activities    
Proceeds from borrowing under related party note payable   300,000
Payment of principle on related party note payable   (300,000)
Payment of obligation under stock repurchase   (20,000)
Net cash used in financing activities   (20,000)
Net Increase (Decrease) in Cash (503,615) 250,793
Cash and Cash Equivalents at Beginning of Period 587,937 427,294
Cash and Cash Equivalents at End of Period $ 84,322 $ 678,087
Supplemental Cash Flow Information    
Cash paid for interest    
Cash paid for income taxes   $ 822

Note 1 - Basis of Presentation and Significant Accounting Policies

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Note 1 - Basis of Presentation and Significant Accounting Policies
9 Months Ended
Sep. 30, 2015
Notes  
Note 1 - Basis of Presentation and Significant Accounting Policies

NOTE 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

 

Basis of PresentationOn February 13, 2012, Acquired Sales Corp (“Acquired Sales,” “AQSP,” or the “Company”) purchased 100% of the equity interests of Defense & Security Technology Group, Inc. (“DSTG”). On September 30, 2013, Acquired Sales sold 100% of the capital stock of DSTG to Minh Le, the previous owner of DSTG prior to its acquisition. DSTG’s results of operations have been included in the Company's operations through September 30, 2013 and have been reclassified as discontinued operations.

 

On January 12, 2013, Acquired Sales entered into an agreement with Drumright Group, LLC (“Drumright”) that was closed on February 11, 2013, wherein Acquired Sales sold 100% of the capital stock of Cogility Software Corporation (“Cogility”) to Drumright. Cogility’s results of operations have been reclassified as discontinued operations.

 

Condensed Financial Statements – The accompanying financial statements are condensed and do not include all disclosures normally required by generally accepted accounting principles. These statements should be read in conjunction with the annual financial statements included in Form 10-K filed with the U.S. Securities and Exchange Commission on March 31, 2015. In particular, the nature of operations and significant accounting principles were presented in Note 1 to the annual financial statements. In the opinion of management, all adjustments necessary for a fair presentation have been included in the accompanying unaudited condensed consolidated financial statements and consist of only normal recurring adjustments, except as disclosed herein. The results of operations for the three and nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2015.

 

Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Significant estimates include share-based compensation. Actual results and outcomes may differ from management’s estimates and assumptions.

 

Basic and Diluted Earnings (Loss) Per Common Share – Basic earnings (loss) per common share is determined by dividing earnings (loss) by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per common share is calculated by dividing earnings (loss) by the weighted-average number of common shares and dilutive common share equivalents outstanding during the period. When dilutive, the incremental potential common shares issuable upon exercise of stock options and warrants are determined by the treasury stock method. The following table summarizes the calculations of basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2015 and 2014.

 

 

For the Three Months

For the Nine Months

 

Ended

Ended

 

September 30,

September 30,

 

2015

2014

2015

2014

Loss from Continuing Operations

$(870,495)

$(82,963)

$(1,137,690)

$(214,278)

Income (Loss) from Discontinued Operations

-

74,605

-

74,605

Net Lncome (Loss)

$(870,495)

$(8,358)

$(1,137,690)

$(139,673)

Weighted -Average Shares Outstanding

2,269,648

2,269,648

2,269,648

2,269,648

Basic  and Diluted Earnings (Loss) per Share

 

 

 

 

Continuing Operations

$(0.38)

$(0.04)

$(0.50)

$(0.09)

Discontinued Operations

-

0.03

-

0.03

Basic and Diluted Earnings (Loss) per Share

$(0.38)

$(0.01)

$(0.50)

$(0.06)

 

There were 4,848,774 employee stock options and 938,000 warrants outstanding during the three and nine months ended September 30, 2015 that were excluded from the computation of diluted earnings (loss) per share because their effects would have been anti-dilutive. There were 2,148,774 employee stock options and 938,000 warrants outstanding during the three and nine months ended September 30, 2014 that were excluded from the computation of diluted earnings (loss) per share because their effects would have been anti-dilutive.

 

Recent Accounting Pronouncements – In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification (“ASC”) 605, Revenue Recognition. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The effective date will be the first quarter of fiscal year 2018 using one of two retrospective application methods. The Company has not determined the potential effects on the financial statements.

 

In June 2014, the FASB issued ASU No. 2014-12, Compensation-Stock Compensation (Topic 718)-Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (a consensus of the FASB Emerging Issues Task Force). ASU No. 2014-12 requires that a performance target that affects vesting and could be achieved after the requisite service period shall be treated as a performance condition. The effective date will be the first quarter of fiscal year 2016. The Company has not determined the potential effects on the financial statements.


Note 2 - Risks and Uncertainties

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Note 2 - Risks and Uncertainties
9 Months Ended
Sep. 30, 2015
Notes  
Note 2 - Risks and Uncertainties

NOTE 2 - RISKS AND UNCERTAINTIES

 

Going Concern – The Company has a history of recurring losses, which have resulted in an accumulated deficit of $13,485,118 as of September 30, 2015. During the nine months ended September 30, 2015, the Company recognized a loss from continuing operations of $1,137,690. The Company used net cash of $368,265 in operating activities of continuing operations. As discussed in Note 3, on September 1, 2015, the Company determined that the note and related interest receivable due from the William Noyes Webster Foundation, Inc. (the “Foundation”) would not be collectible. As such, management wrote off the note totaling $737,850 and interest receivable totaling $97,427 as bad debt expense on September 1, 2015.

 

The sale of Cogility and DSTG eliminated the Company’s source of revenue. As a result, there is substantial doubt that the Company will be able to continue as a going concern. Bankruptcy of the Company at some point in the future is a possibility. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

Management plans to sustain the Company as a going concern by taking the following actions: (1) acquiring and/or developing profitable businesses that will create positive income from operations; (2) acquiring valuable real estate in exchange for common stock and/or preferred stock; and/or (3) completing private placements of our common stock and/or preferred stock. Management believes that by taking these actions, the Company will be provided with sufficient future operations and cash flow to continue as a going concern. However, there can be no assurance that the Company will be successful in consummating such actions on acceptable terms, if at all. Moreover, any such actions can be expected to result in substantial dilution to the existing shareholders of the Company.


Note 3 - The William Noyes Webster Foundation, Inc.

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Note 3 - The William Noyes Webster Foundation, Inc.
9 Months Ended
Sep. 30, 2015
Notes  
Note 3 - The William Noyes Webster Foundation, Inc.

NOTE 3 – THE WILLIAM NOYES WEBSTER FOUNDATION, INC.

 

The William Noyes Webster Foundation, Inc. (the "Foundation"), a non-profit Massachusetts corporation, received a provisional registration from the Commonwealth of Massachusetts to own and operate a medical marijuana cultivation facility in Plymouth, Massachusetts (the “Plymouth Cultivation Facility”), and a medical marijuana dispensary in Dennis, Massachusetts (the “Dennis Dispensary”). Jane W. Heatley ("Heatley") is the founder and a member of the board of directors of the Foundation.

 

Teaming Agreement – On July 8, 2014, Acquired Sales Corp. ("AQSP") entered into a Teaming Agreement (the "Teaming Agreement") with Heatley, in which, among other things: (1) AQSP and Heatley agreed to use their respective best efforts, working exclusively together as a team, and not as a partnership or other entity, in order to consummate transactions, agreements, contracts or other arrangements pursuant to which AQSP will provide capital and expertise to the Foundation; and (2) Heatley agreed that Heatley shall not, and shall not permit the Foundation to, discuss or negotiate for debt or equity financing, or consulting services or other expertise, from any third party. AQSP has claimed that Heatley has violated the Teaming Agreement by discussing and negotiating for debt or equity financing, or consulting services or other expertise, from at least one third party. Heatley has claimed that AQSP violated the Teaming Agreement because Heatley believes that AQSP has failed to lend funds to the Foundation in accordance with the Teaming Agreement. AQSP believes that Heatley's claim is baseless. No assurances whatsoever can be made that Heatley will comply with the terms of the Teaming Agreement, nor that AQSP will be able to adequately enforce the terms of the Teaming Agreement if it is ever the subject of litigation.

 

Promissory Note - On July 14, 2014, the Foundation signed and delivered to AQSP a Secured Promissory Note (the "Note") which is in the stated loan amount of $1,500,000, and is secured by a Security Agreement of even date therewith (the “Security Agreement”). The Note provides that the $1,500,000 loan may be advanced in one or more installments as the Foundation and AQSP may mutually agree upon. The Foundation and AQSP mutually agreed that the first installment of this loan would be $602,500. Pursuant to instructions from the Foundation, on July 14, 2014, AQSP paid $2,500 owed by the Foundation to one of its consultants, and AQSP advanced $600,000 directly to the Foundation.  The amount and timing of subsequent loan installments under the Note, which could have totaled $897,500, had not yet been mutually agreed upon between the Foundation and AQSP as of the date of the Note.

 

Between April and July 2015, AQSP loaned an additional $135,350 to the Foundation, evidenced by the Note and secured by the Security Agreement. Following such additional loans, the principal of the loan from AQSP to the Foundation, evidenced by the Note and secured by the Security Agreement, is now $737,850.

 

The principal balance outstanding under the Note bore interest at the rate of 12.5% per annum, compounded monthly. It was contemplated that the first payment of accrued interest by the Foundation under the Note would be made as soon after the Foundation commences operations of the Plymouth Cultivation Facility and the Dennis Dispensary as the Foundation's cash flows shall reasonably permit, but in any event no later than one year after the Foundation commences operations. The principal of the Note would be payable in eight consecutive equal quarterly installments, commencing on the last day of the calendar quarter in which the Foundation commences operations. Principal on the Note and related accrued interest would be considered past due if the aforementioned payments were not received by their due dates.

 

Uncollectable Note and Interest Receivable – Periodically, management of the Company assessed the collectability of the Note based on the adequacy of the Foundation’s collateral and the Foundation’s capability of repaying the Note according to its terms. Based on management’s assessment, on September 1, 2015, the Company concluded that the Note and related interest receivable would not be collectible. As such, management wrote off the Note totaling $737,850 and interest receivable totaling $97,427 as bad debt expense on September 1, 2015.


Note 4 - Notes Payable

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Note 4 - Notes Payable
9 Months Ended
Sep. 30, 2015
Notes  
Note 4 - Notes Payable

NOTE 4 – NOTES PAYABLE

 

Notes Payable to Related Parties – On July 14, 2014, AQSP borrowed $300,000 from the Roberti Jacobs Family Trust (the "Trust"). The Trust is an affiliate of Gerard M. Jacobs, AQSP's chief executive officer. The loan was repaid in full on August 5, 2014.


Note 5 - Shareholders' Equity

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Note 5 - Shareholders' Equity
9 Months Ended
Sep. 30, 2015
Notes  
Note 5 - Shareholders' Equity

NOTE 5 – SHAREHOLDERS’ EQUITY

 

Share-Based Compensation – The following is a summary of share-based compensation, stock option and warrant activity as of September 30, 2015 and changes during the year then ended:

 

 

 

 

Weighted-Average

Aggregate

 

 

Weighted-Average

Remaining Contractual

Intrinsic

 

Shares

Exercise Price (a)

Term (Years)

Value

Outstanding, December 31, 2014

6,198,774

$1.56

 

 

Terminated warrants

(1,350,000)

 

 

 

Outstanding, September 30, 2015

4,848,774

$1.56

7.39

$2,125,125

Exercisable, September 30, 2015

3,598,774

$1.46

6.05

$2,125,125

 

 

 

 

 

Note:

 

 

 

 

(a) The Weighted-Average Exercise Price column excludes those warrants that have an exercise price for the common stock priced at the Capital Raise Price Per Share.

 

 

 

 

 

 

On July 20, 2015, the Board of Directors of AQSP agreed and acknowledged that all of the rights to purchase warrants, granted to members of the board of directors of AQSP, whose exercise price was based on the planned capital raise to fund the proposed acquisition of PPV, Inc. are now terminated. As a result of this termination, rights to purchase warrants, granted to members of the board of directors of AQSP, exercisable into 1,350,000 shares of AQSP have been terminated.

 

Financing Warrants – Through December 31, 2012, the Company issued 938,000 warrants in connection with the issuance of notes payable primarily to related parties. The warrants were outstanding at September 30, 2015. At September 30, 2015, the financing warrants had a weighted-average exercise price of $2.32 per share, a weighted-average remaining contractual term of 1.11 years and an aggregate intrinsic value of $0.

 

Common Stock – On October 17, 2013, the Company entered into a settlement agreement with Matthew Ghourdjian and the Deborah Sue Ghourdjian Separate Property Trust, whereby Mr. Ghourdjian and the Trust sold to the Company 690,796 shares of common stock for $30,000 cash plus an obligation to pay an additional $20,000 in February 2014, or approximately $0.07 per share. Mr. Ghourdjian resigned from the Company as an employee, director and officer. Mr. Ghourdjian and the Trust, and the Company entered into mutual releases of all claims against one another. The obligation was paid in February 2014.


Note 6 - Contingent Contractual Obligations and Commercial Commitments

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Note 6 - Contingent Contractual Obligations and Commercial Commitments
9 Months Ended
Sep. 30, 2015
Notes  
Note 6 - Contingent Contractual Obligations and Commercial Commitments

NOTE 6 – CONTINGENT CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

 

Medical Marijuana in Massachusetts:

 

As discussed in Note 3, the Company has agreements with Heatley and the William Noyes Webster Foundation, Inc. (the “Foundation”).

 

AQSP has agreed to pay a lump sum finder's fee to Parare Partners Inc. in the event that all of the following conditions occur: (1) AQSP makes certain loans to the William Noyes Webster Foundation, Inc. (the "Foundation") which was found by Parare Partners Inc., (2) the Foundation constructs and brings into operation its planned medical marijuana cultivation facility in Plymouth, Massachusetts (the “Plymouth Cultivation Facility”) and medical marijuana dispensary in Dennis, Massachusetts (the “Dennis Dispensary”), (3) AQSP directly or via subsidiaries enters into certain consulting agreements with the Foundation, and (4) all necessary approvals are obtained. If all of such conditions occur, then the finder's fee will be calculated as follows: (i) 5% of the first $1,000,000 of the aggregate principal amount of such loans, (ii) 4% of the second $1,000,000 of the aggregate principal amount of such loans, (iii) 3% of the third $1,000,000 of the aggregate principal amount of such loans, (iv) 2% of the fourth $1,000,000 of the aggregate principal amount of such loans, and (v) 1% of the aggregate principal amount of such loans that are in excess of $4,000,000. As of September 30, 2015, no finder’s fees are due to Parare Partners, Inc.

 

During the nine month period ended September 30, 2015, MVJ Realty, LLC, an affiliate of AQSP director Vincent J. Mesolella (“MVJ Realty”), loaned a total of $23,000 to the Foundation, which $23,000 was used as follows: (a) $9,500 was used by the Foundation to pay the rent of the Plymouth Cultivation Facility for the month of May, 2015; (b) $6,900 was used by the Foundation to pay the rent of the Dennis Dispensary for the months of April and May, 2015; (c) $3,600 was used by the Foundation to pay for the general liability insurance policy covering the Plymouth Cultivation Facility and the Dennis Dispensary; and (d) $3,000 was used by the Foundation to pay the application fees for two applications (the “Two New Applications”) by the Foundation to the Commonwealth of Massachusetts for licenses (the “Two New Licenses”) to operate two new medical marijuana dispensaries in Massachusetts (the “Two New Dispensaries”). In making these $23,000 loans to the Foundation, MVJ Realty viewed itself as acting as an agent for AQSP, and expected to eventually be reimbursed for the $23,000 by AQSP subject to the execution and delivery by the Foundation to AQSP of loan documents evidencing that the principal amount of the loan from AQSP to the Foundation, evidenced by the Note and secured by the Security Agreement, had been increased by $23,000. The execution and delivery of such loan documents occurred on July 15, 2015, and MVJ Realty was reimbursed for the $23,000 in August 2015.

 

In the Two New Applications, the Foundation included background information in regard to each director and officer of AQSP. If the Two New Licenses are awarded to the Foundation, then the Foundation may seek to obtain financing for the Two New Dispensaries from MVJ Realty/AQSP. The Foundation and MVJ Realty/AQSP have not yet entered into any agreements in regard to such potential financing, and AQSP considers it to be extremely doubtful that any such agreements will ever be entered into in light of the on-going disputes between AQSP, Heatley and the Foundation regarding the Teaming Agreement.

 

At this time, no assurances or guarantees whatsoever can be made as to whether any transaction with the Foundation will be successfully consummated, nor on what terms.

 

Acquisition of Real Estate

 

As discussed in AQSP’s prior public filings, AQSP and one of its directors, Vincent J. Mesolella, have agreed to negotiate in good faith regarding the possibility of AQSP acquiring certain parcels of real estate in Rhode Island that are owned by entities affiliated with Vincent J. Mesolella and his son Derek V. Mesolella, an independent contractor to AQSP, one of which parcels is also partly owned by an affiliate of AQSP’s chief executive officer, Gerard M. Jacobs (collectively, the “Mesolella/Jacobs Properties”).

 

The independent members of the board of directors of AQSP, Joshua A. Bloom, Michael D. McCaffrey and Richard E. Morrissy, met separately and decided to cause AQSP to retain an MAI appraiser in Rhode Island to appraise the Mesolella/Jacobs Properties and one other parcel of real estate in Rhode Island that is owned by an unrelated third party (the “Unrelated Parcel”) who expressed a potential interest in AQSP acquiring the Unrelated Parcel.

 

The parties have been unable to agree upon mutually acceptable valuations of any of the Mesolella/Jacobs Properties. Consequently, the independent directors have met and have recommended to the full board of directors of AQSP that all pending purchase and sale offers on the Mesolella/Jacobs Properties be withdrawn.


Note 7 - Subsequent Events

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Note 7 - Subsequent Events
9 Months Ended
Sep. 30, 2015
Notes  
Note 7 - Subsequent Events

NOTE 7 – SUBSEQUENT EVENTS

 

We have evaluated subsequent events through the date of filing this quarterly report on Form 10-Q. No events have occurred that would require adjustment to or disclosure in the financial statements.


Note 1 - Basis of Presentation and Significant Accounting Policies (Policies)

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Note 1 - Basis of Presentation and Significant Accounting Policies (Policies)
9 Months Ended
Sep. 30, 2015
Policies  
Basis of Presentation

Basis of PresentationOn February 13, 2012, Acquired Sales Corp (“Acquired Sales,” “AQSP,” or the “Company”) purchased 100% of the equity interests of Defense & Security Technology Group, Inc. (“DSTG”). On September 30, 2013, Acquired Sales sold 100% of the capital stock of DSTG to Minh Le, the previous owner of DSTG prior to its acquisition. DSTG’s results of operations have been included in the Company's operations through September 30, 2013 and have been reclassified as discontinued operations.

 

On January 12, 2013, Acquired Sales entered into an agreement with Drumright Group, LLC (“Drumright”) that was closed on February 11, 2013, wherein Acquired Sales sold 100% of the capital stock of Cogility Software Corporation (“Cogility”) to Drumright. Cogility’s results of operations have been reclassified as discontinued operations.

Condensed Financial Statements

Condensed Financial Statements – The accompanying financial statements are condensed and do not include all disclosures normally required by generally accepted accounting principles. These statements should be read in conjunction with the annual financial statements included in Form 10-K filed with the U.S. Securities and Exchange Commission on March 31, 2015. In particular, the nature of operations and significant accounting principles were presented in Note 1 to the annual financial statements. In the opinion of management, all adjustments necessary for a fair presentation have been included in the accompanying unaudited condensed consolidated financial statements and consist of only normal recurring adjustments, except as disclosed herein. The results of operations for the three and nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2015.

Use of Estimates

Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Significant estimates include share-based compensation. Actual results and outcomes may differ from management’s estimates and assumptions.

Basic and Diluted Earnings (Loss) Per Common Share

Basic and Diluted Earnings (Loss) Per Common Share – Basic earnings (loss) per common share is determined by dividing earnings (loss) by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per common share is calculated by dividing earnings (loss) by the weighted-average number of common shares and dilutive common share equivalents outstanding during the period. When dilutive, the incremental potential common shares issuable upon exercise of stock options and warrants are determined by the treasury stock method. The following table summarizes the calculations of basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2015 and 2014.

 

 

For the Three Months

For the Nine Months

 

Ended

Ended

 

September 30,

September 30,

 

2015

2014

2015

2014

Loss from Continuing Operations

$(870,495)

$(82,963)

$(1,137,690)

$(214,278)

Income (Loss) from Discontinued Operations

-

74,605

-

74,605

Net Lncome (Loss)

$(870,495)

$(8,358)

$(1,137,690)

$(139,673)

Weighted -Average Shares Outstanding

2,269,648

2,269,648

2,269,648

2,269,648

Basic  and Diluted Earnings (Loss) per Share

 

 

 

 

Continuing Operations

$(0.38)

$(0.04)

$(0.50)

$(0.09)

Discontinued Operations

-

0.03

-

0.03

Basic and Diluted Earnings (Loss) per Share

$(0.38)

$(0.01)

$(0.50)

$(0.06)

 

There were 4,848,774 employee stock options and 938,000 warrants outstanding during the three and nine months ended September 30, 2015 that were excluded from the computation of diluted earnings (loss) per share because their effects would have been anti-dilutive. There were 2,148,774 employee stock options and 938,000 warrants outstanding during the three and nine months ended September 30, 2014 that were excluded from the computation of diluted earnings (loss) per share because their effects would have been anti-dilutive.

Recent Accounting Pronouncements

Recent Accounting Pronouncements – In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification (“ASC”) 605, Revenue Recognition. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The effective date will be the first quarter of fiscal year 2018 using one of two retrospective application methods. The Company has not determined the potential effects on the financial statements.

 

In June 2014, the FASB issued ASU No. 2014-12, Compensation-Stock Compensation (Topic 718)-Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (a consensus of the FASB Emerging Issues Task Force). ASU No. 2014-12 requires that a performance target that affects vesting and could be achieved after the requisite service period shall be treated as a performance condition. The effective date will be the first quarter of fiscal year 2016. The Company has not determined the potential effects on the financial statements.


Note 1 - Basis of Presentation and Significant Accounting Policies: Basic and Diluted Earnings (Loss) Per Common Share: Schedule of Earnings Per Share, Basic and Diluted (Tables)

v3.2.0.727
Note 1 - Basis of Presentation and Significant Accounting Policies: Basic and Diluted Earnings (Loss) Per Common Share: Schedule of Earnings Per Share, Basic and Diluted (Tables)
9 Months Ended
Sep. 30, 2015
Tables/Schedules  
Schedule of Earnings Per Share, Basic and Diluted

 

 

For the Three Months

For the Nine Months

 

Ended

Ended

 

September 30,

September 30,

 

2015

2014

2015

2014

Loss from Continuing Operations

$(870,495)

$(82,963)

$(1,137,690)

$(214,278)

Income (Loss) from Discontinued Operations

-

74,605

-

74,605

Net Lncome (Loss)

$(870,495)

$(8,358)

$(1,137,690)

$(139,673)

Weighted -Average Shares Outstanding

2,269,648

2,269,648

2,269,648

2,269,648

Basic  and Diluted Earnings (Loss) per Share

 

 

 

 

Continuing Operations

$(0.38)

$(0.04)

$(0.50)

$(0.09)

Discontinued Operations

-

0.03

-

0.03

Basic and Diluted Earnings (Loss) per Share

$(0.38)

$(0.01)

$(0.50)

$(0.06)


Note 5 - Shareholders' Equity: Schedule of Share-based Compensation, Stock Options and Warrant Activity (Tables)

v3.2.0.727
Note 5 - Shareholders' Equity: Schedule of Share-based Compensation, Stock Options and Warrant Activity (Tables)
9 Months Ended
Sep. 30, 2015
Tables/Schedules  
Schedule of Share-based Compensation, Stock Options and Warrant Activity

 

 

 

 

Weighted-Average

Aggregate

 

 

Weighted-Average

Remaining Contractual

Intrinsic

 

Shares

Exercise Price (a)

Term (Years)

Value

Outstanding, December 31, 2014

6,198,774

$1.56

 

 

Terminated warrants

(1,350,000)

 

 

 

Outstanding, September 30, 2015

4,848,774

$1.56

7.39

$2,125,125

Exercisable, September 30, 2015

3,598,774

$1.46

6.05

$2,125,125

 

 

 

 

 

Note:

 

 

 

 

(a) The Weighted-Average Exercise Price column excludes those warrants that have an exercise price for the common stock priced at the Capital Raise Price Per Share.

 

 

 

 

 


Note 1 - Basis of Presentation and Significant Accounting Policies (Tables)

v3.2.0.727
Note 1 - Basis of Presentation and Significant Accounting Policies (Tables)
9 Months Ended
Sep. 30, 2015
Tables/Schedules  
Schedule of Earnings Per Share, Basic and Diluted

 

 

For the Three Months

For the Nine Months

 

Ended

Ended

 

September 30,

September 30,

 

2015

2014

2015

2014

Loss from Continuing Operations

$(870,495)

$(82,963)

$(1,137,690)

$(214,278)

Income (Loss) from Discontinued Operations

-

74,605

-

74,605

Net Lncome (Loss)

$(870,495)

$(8,358)

$(1,137,690)

$(139,673)

Weighted -Average Shares Outstanding

2,269,648

2,269,648

2,269,648

2,269,648

Basic  and Diluted Earnings (Loss) per Share

 

 

 

 

Continuing Operations

$(0.38)

$(0.04)

$(0.50)

$(0.09)

Discontinued Operations

-

0.03

-

0.03

Basic and Diluted Earnings (Loss) per Share

$(0.38)

$(0.01)

$(0.50)

$(0.06)


Note 5 - Shareholders' Equity (Tables)

v3.2.0.727
Note 5 - Shareholders' Equity (Tables)
9 Months Ended
Sep. 30, 2015
Tables/Schedules  
Schedule of Share-based Compensation, Stock Options and Warrant Activity

 

 

 

 

Weighted-Average

Aggregate

 

 

Weighted-Average

Remaining Contractual

Intrinsic

 

Shares

Exercise Price (a)

Term (Years)

Value

Outstanding, December 31, 2014

6,198,774

$1.56

 

 

Terminated warrants

(1,350,000)

 

 

 

Outstanding, September 30, 2015

4,848,774

$1.56

7.39

$2,125,125

Exercisable, September 30, 2015

3,598,774

$1.46

6.05

$2,125,125

 

 

 

 

 

Note:

 

 

 

 

(a) The Weighted-Average Exercise Price column excludes those warrants that have an exercise price for the common stock priced at the Capital Raise Price Per Share.

 

 

 

 

 


Note 1 - Basis of Presentation and Significant Accounting Policies: Basis of Presentation (Details)

v3.2.0.727
Note 1 - Basis of Presentation and Significant Accounting Policies: Basis of Presentation (Details)
12 Months Ended
Dec. 31, 2012
Sep. 30, 2013
Jan. 12, 2013
Defense Securities Technology Group      
Subsidiary or Equity Method Investee, Cumulative Percentage Ownership after All Transactions 100.00%    
Defense & Security Technology Group, Inc      
Stock Sold to Acquirer, percent   100.00%  
Drumright Group LLC purchase of Cogility      
Stock Sold to Acquirer, percent     100.00%

Note 1 - Basis of Presentation and Significant Accounting Policies: Basic and Diluted Earnings (Loss) Per Common Share: Schedule of Earnings Per Share, Basic and Diluted (Details)

v3.2.0.727
Note 1 - Basis of Presentation and Significant Accounting Policies: Basic and Diluted Earnings (Loss) Per Common Share: Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Details        
Loss from Continuing Operations $ (870,495) $ (82,963) $ (1,137,690) $ (214,278)
Income (Loss) from Discontinued Operations 0 74,605 0 74,605
Net Income (Loss) $ (870,495) $ (8,358) $ (1,137,690) $ (139,673)
Weighted -Average Shares Outstanding 2,269,648 2,269,648 2,269,648 2,269,648
Basic and Diluted Earnings (Loss) per Share        
Continuing Operations $ (0.38) $ (0.04) $ (0.50) $ (0.09)
Discontinued Operations 0 0.03 0 0.03
Basic and Diluted Earnings (Loss) per Share $ (0.38) $ (0.01) $ (0.50) $ (0.06)

Note 1 - Basis of Presentation and Significant Accounting Policies: Basic and Diluted Earnings (Loss) Per Common Share (Details)

v3.2.0.727
Note 1 - Basis of Presentation and Significant Accounting Policies: Basic and Diluted Earnings (Loss) Per Common Share (Details) - shares
9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Equity Option    
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount 4,848,774 2,148,774
Warrant    
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount 938,000 938,000

Note 2 - Risks and Uncertainties (Details)

v3.2.0.727
Note 2 - Risks and Uncertainties (Details) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Dec. 31, 2014
Accumulated deficit $ (13,485,118)   $ (13,485,118)   $ (12,347,428)
Loss from Continuing Operations (870,495) $ (82,963) (1,137,690) $ (214,278)  
Net cash used in operating activities of continuing operations     (368,265) $ (201,312)  
Bad debt expense $ 835,277   835,277    
Secured Promissory Note          
Bad debt expense     737,850    
Interest receivable          
Bad debt expense     $ 97,427    

Note 3 - The William Noyes Webster Foundation, Inc. (Details)

v3.2.0.727
Note 3 - The William Noyes Webster Foundation, Inc. (Details) - USD ($)
1 Months Ended 3 Months Ended 7 Months Ended 9 Months Ended
Jul. 31, 2014
Sep. 30, 2015
Jul. 31, 2015
Sep. 30, 2015
Sep. 30, 2014
Note receivable payment       $ 135,350 $ 602,500
Bad debt expense   $ 835,277   835,277  
Secured Promissory Note          
Note receivable payment $ 602,500        
Bad debt expense       737,850  
Secured Promissory Note | William Noyes Webster Foundation Inc          
Debt Instrument, Face Amount   $ 1,500,000   $ 1,500,000  
Note receivable payment 600,000   $ 135,350    
Note Receivable     $ 737,850    
Debt Instrument, Interest Rate, Stated Percentage   12.50%   12.50%  
Secured Promissory Note | William Noyes Webster Foundation Inc | Payment To Consultant          
Note receivable payment $ 2,500        
Secured Promissory Note | William Noyes Webster Foundation Inc | Unfunded Portion of Note          
Debt Instrument, Face Amount   $ 897,500   $ 897,500  
Interest receivable          
Bad debt expense       $ 97,427  

Note 4 - Notes Payable (Details)

v3.2.0.727
Note 4 - Notes Payable (Details)
Jul. 14, 2014
USD ($)
Roberti Jacobs Family Trust  
Debt Instrument, Face Amount $ 300,000

Note 5 - Shareholders' Equity: Schedule of Share-based Compensation, Stock Options and Warrant Activity (Details)

v3.2.0.727
Note 5 - Shareholders' Equity: Schedule of Share-based Compensation, Stock Options and Warrant Activity (Details) - Sep. 30, 2015 - USD ($)
Total
Options, Outstanding, Beginning Balance 6,198,774
Options, Outstanding, Weighted Average Exercise Price, Beginning Balance $ 1.56
Options, Outstanding, Ending Balance 4,848,774
Options, Outstanding, Weighted Average Exercise Price, Ending Balance $ 1.56
Options, Outstanding, Weighted Average Remaining Term 7 years 4 months 20 days
Options, Outstanding, Intrinsic Value $ 2,125,125
Options, Exercisable 3,598,774
Options, Exercisable, Weighted Average Exercise Price $ 1.46
Options, Exercisable, Weighted Average Remaining Term 6 years 18 days
Options, Exercisable, Intrinsic Value $ 2,125,125
Warrant  
Terminated Warrants (1,350,000)

Note 5 - Shareholders' Equity (Details)

v3.2.0.727
Note 5 - Shareholders' Equity (Details) - USD ($)
3 Months Ended 9 Months Ended 12 Months Ended
Mar. 31, 2014
Sep. 30, 2015
Sep. 30, 2014
Dec. 31, 2013
Feb. 28, 2014
Class of Warrant, Outstanding   938,000      
Payment to Mr. Ghourdjian for Purchase of Common Stock $ 20,000   $ 20,000 $ 30,000  
Matthew Ghourdjian          
Share Price         $ 0.07
Common Stock          
Stock Repurchased During Period, Shares       690,796  
Warrant | Notes Payable to Related Parties          
Weighted Average Exercise Price   $ 2.32      
Weighted Average Remaining Contractual Term   1 year 1 month 10 days      
Aggregate Intrinsic Value   $ 0      

Note 6 - Contingent Contractual Obligations and Commercial Commitments (Details)

v3.2.0.727
Note 6 - Contingent Contractual Obligations and Commercial Commitments (Details) - Sep. 30, 2015 - USD ($)
Total
MVJ Realty, LLC  
Debt Instrument, Face Amount $ 23,000
Debt Instrument, Use of proceeds $23,000 was used as follows: (a) $9,500 was used by the Foundation to pay the rent of the Plymouth Cultivation Facility for the month of May, 2015; (b) $6,900 was used by the Foundation to pay the rent of the Dennis Dispensary for the months of April and May, 2015; (c) $3,600 was used by the Foundation to pay for the general liability insurance policy covering the Plymouth Cultivation Facility and the Dennis Dispensary; and (d) $3,000 was used by the Foundation to pay the application fees for two applications (the “Two New Applications”) by the Foundation to the Commonwealth of Massachusetts for licenses (the “Two New Licenses”) to operate two new medical marijuana dispensaries in Massachusetts (the “Two New Dispensaries”).
Debt Instrument, Repurchase Amount $ 23,000
Parere Partners Inc. | Medical marijuana on Cape Cod  
Commitments Under Agreements with the William Noyes Webster Foundation, Inc. (i) 5% of the first $1,000,000 of the aggregate principal amount of such loans, (ii) 4% of the second $1,000,000 of the aggregate principal amount of such loans, (iii) 3% of the third $1,000,000 of the aggregate principal amount of such loans, (iv) 2% of the fourth $1,000,000 of the aggregate principal amount of such loans, and (v) 1% of the aggregate principal amount of such loans that are in excess of $4,000,000. As of September 30, 2015, no finder’s fees are due to Parare Partners, Inc.
William Noyes Webster Foundation Inc | Secured Promissory Note  
Debt Instrument, Face Amount $ 1,500,000
William Noyes Webster Foundation Inc | MVJ Realty, LLC | Secured Promissory Note  
Debt Instrument, Increase $ 23,000

Element Counts

Number of Extension Elements: 104
Number of Contexts: 50
Number of Segments: 21
Number of Units: 4

Renderer Messages

In ''CONDENSED BALANCE SHEETS'', column(s) 3, 4 are contained in other reports, so were removed by flow through suppression.

In ''CONDENSED STATEMENTS OF CASH FLOWS'', column(s) 1, 2, 3, 7 are contained in other reports, so were removed by flow through suppression.


Content Summary

Documents

000010 - Document - Document and Entity Information

Statements

000020 - Statement - CONDENSED BALANCE SHEETS

000030 - Statement - CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical)

000040 - Statement - CONDENSED STATEMENTS OF OPERATIONS

000050 - Statement - CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)

000060 - Statement - CONDENSED STATEMENTS OF CASH FLOWS

Notes to Financials (level 1)

000070 - Disclosure - Note 1 - Basis of Presentation and Significant Accounting Policies

000080 - Disclosure - Note 2 - Risks and Uncertainties

000090 - Disclosure - Note 3 - The William Noyes Webster Foundation, Inc.

000100 - Disclosure - Note 4 - Notes Payable

000110 - Disclosure - Note 5 - Shareholders' Equity

000120 - Disclosure - Note 6 - Contingent Contractual Obligations and Commercial Commitments

000130 - Disclosure - Note 7 - Subsequent Events

Policies (level 2)

000140 - Disclosure - Note 1 - Basis of Presentation and Significant Accounting Policies (Policies)

Tables/Schedules (level 3)

000150 - Disclosure - Note 1 - Basis of Presentation and Significant Accounting Policies: Basic and Diluted Earnings (Loss) Per Common Share: Schedule of Earnings Per Share, Basic and Diluted (Tables)

000160 - Disclosure - Note 5 - Shareholders' Equity: Schedule of Share-based Compensation, Stock Options and Warrant Activity (Tables)

000170 - Disclosure - Note 1 - Basis of Presentation and Significant Accounting Policies (Tables)

000180 - Disclosure - Note 5 - Shareholders' Equity (Tables)

Details (level 4)

000190 - Disclosure - Note 1 - Basis of Presentation and Significant Accounting Policies: Basis of Presentation (Details)

000200 - Disclosure - Note 1 - Basis of Presentation and Significant Accounting Policies: Basic and Diluted Earnings (Loss) Per Common Share: Schedule of Earnings Per Share, Basic and Diluted (Details)

000210 - Disclosure - Note 1 - Basis of Presentation and Significant Accounting Policies: Basic and Diluted Earnings (Loss) Per Common Share (Details)

000220 - Disclosure - Note 2 - Risks and Uncertainties (Details)

000230 - Disclosure - Note 3 - The William Noyes Webster Foundation, Inc. (Details)

000240 - Disclosure - Note 4 - Notes Payable (Details)

000250 - Disclosure - Note 5 - Shareholders' Equity: Schedule of Share-based Compensation, Stock Options and Warrant Activity (Details)

000260 - Disclosure - Note 5 - Shareholders' Equity (Details)

000270 - Disclosure - Note 6 - Contingent Contractual Obligations and Commercial Commitments (Details)


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