Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 31, 2016 | Jun. 30, 2015 | |
Document and Entity Information: | |||
Entity Registrant Name | EMAV HOLDINGS, INC. | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Trading Symbol | rvnw | ||
Amendment Flag | false | ||
Entity Central Index Key | 1,076,744 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 48,841,071 | ||
Entity Public Float | $ 12,471,273 | ||
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 | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Entity Incorporation, Date of Incorporation | May 14, 1987 | ||
Entity Incorporation, State Country Name | Florida |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Current Assets | ||
Cash and cash equivalents | $ 1,802 | $ 63,914 |
Deferred offering costs | 75,000 | |
Prepaid expenses | 1,000 | 77,666 |
Total Current Assets | 77,802 | 141,580 |
Property and equipment, net | 3,318 | 34,719 |
Total Assets | 81,120 | 176,299 |
Current liabilities | ||
Accounts payable | 42,731 | 19,353 |
Accrued liabilities | 10,859 | 5,052 |
Payable to related party | 22,500 | 12,500 |
Embedded conversion option liability | 78,713 | |
Notes payable, current portion, net of debt discount of $15,639 and $15,820 at December 31, 2015 and 2014, respectively | 144,339 | 38,686 |
Convertible note payable, current portion, net of discount of $27,426 at December 31, 2015 | 22,574 | |
Total Current Liabilities | 321,716 | 75,591 |
Note payable, net of current portion, net of debt discount of $0 and $15,639 at December 31, 2015 and 2014, respectively | 32,237 | |
Total Liabilities | $ 321,716 | $ 107,828 |
Commitments and contingencies (Note 6) | ||
Stockholders' Equity (Deficit) | ||
Common stock, $0.001 par value, 300,000,000 shares authorized; 47,780,465 shares and 47,421,565 shares issued and 46,905,465 shares and 46,546,565 shares outstanding at December 31, 2015 and 2014, respectively | $ 47,781 | $ 47,422 |
Treasury stock, 875,000 shares, $0.001 par value, issued not outstanding | (875) | (875) |
Additional paid in capital | 5,011,145 | 4,832,054 |
Accumulated deficit | (5,298,647) | (4,810,130) |
Total Stockholders' Equity (Deficit) | (240,596) | 68,471 |
Total Liabilities and Stockholders' Equity | $ 81,120 | $ 176,299 |
Consolidated Balance Sheets Par
Consolidated Balance Sheets Parenthetical - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Consolidated Balance Sheets Parenthetical | ||
Debt Discount - current | $ 15,639 | $ 15,820 |
Debt Discount on Convertible Notes Payable, Current | $ 27,426 | |
Debt Discount - long term | $ 15,639 | |
Common stock par value | $ 0.001 | $ 0.001 |
Common stock shares authorized | 300,000,000 | 300,000,000 |
Common stock shares issued | 47,780,465 | 47,421,565 |
Common stock shares outstanding | 46,905,465 | 46,546,565 |
Treasury stock par value | $ 0.001 | $ 0.001 |
Treasury stock shares issued | 875,000 | 875,000 |
Treasury stock shares outstanding |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Consolidated Statements of Operations | ||
Revenues | ||
Cost of goods sold | ||
Gross Profit (Loss) | ||
Operating Expenses | ||
Depreciation | $ 8,117 | $ 8,478 |
General and administrative | 403,657 | 3,700,072 |
Total Operating Expenses | 411,774 | 3,708,550 |
Operating Loss from Operations | (411,774) | (3,708,550) |
Other Income (Expenses) | ||
Other income | 2,716 | |
Interest expense | (50,746) | (26,930) |
Change in the fair value of embedded conversion option liability | (28,713) | |
Total Other Income (Expenses) | (76,743) | (26,930) |
Loss from Continuing Operations before Income Taxes | $ (488,517) | $ (3,735,480) |
Provision for income tax | ||
Net loss | $ (488,517) | $ (3,735,480) |
Basic and diluted net loss per share | $ (0.01) | $ (0.07) |
Weighted average number of shares outstanding | 46,731,324 | 50,787,179 |
Consolidated Statement of Share
Consolidated Statement of Shareholders' Equity - USD ($) | Common Stock | Treasury Stock | Additional paid in capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2013 | $ 51,003 | $ 1,075,598 | $ (1,074,650) | $ 51,951 | |
Balance - Shares at Dec. 31, 2013 | 51,002,565 | ||||
Return of common shares to treasury as part of settlement with shareholder | $ (12,000) | 12,000 | |||
Return of common shares to treasury as part of settlement with shareholder - shares | (12,000,000) | ||||
Retirement of shares from treasury | $ (5,000) | $ 5,000 | |||
Retirement of shares from treasury - shares | (5,000,000) | 5,000,000 | |||
Common shares sold at $0.50 per share | $ 769 | 383,731 | 384,500 | ||
Common shares sold at $0.50 per share - shares | 769,000 | ||||
Common shares issued in conjunction with note payable | $ 100 | 29,900 | 30,000 | ||
Common shares issued in conjunction with note payable - shares | 100,000 | ||||
Common stock issued to fundraising advisors for capital raise | $ 50 | 24,950 | 25,000 | ||
Common stock issued to fundraising advisors for capital raise - shares | 50,000 | ||||
Common shares issued to consultants for services | $ 500 | 249,500 | 250,000 | ||
Common shares issued to consultants for services - shares | 500,000 | ||||
Common shares issued to vendors for services, issued from treasury | $ 6,125 | 3,056,375 | 3,062,500 | ||
Common shares issued to vendors for services, issued from treasury - shares | 6,125,000 | ||||
Net loss | (3,735,480) | (3,735,480) | |||
Balance at Dec. 31, 2014 | $ 47,422 | $ (875) | 4,832,054 | (4,810,130) | 68,471 |
Balance - Shares at Dec. 31, 2014 | 47,421,565 | (875,000) | |||
Common shares sold at $0.50 per share | $ 359 | 179,091 | 179,450 | ||
Common shares sold at $0.50 per share - shares | 358,900 | ||||
Net loss | (488,517) | (488,517) | |||
Balance at Dec. 31, 2015 | $ 47,781 | $ (875) | $ 5,011,145 | $ (5,298,647) | $ (240,596) |
Balance - Shares at Dec. 31, 2015 | 47,780,465 | (875,000) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (488,517) | $ (3,735,480) |
Adjustment to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 8,117 | 8,478 |
Gain on sale of property and equipment | (2,716) | |
Issuance of common stock to vendors for services | 3,187,500 | |
Amortization of prepaid consulting services for stock issuances | 76,666 | 72,334 |
Amortization of debt discount on notes payable | 18,394 | 22,228 |
Amortization of Embedded conversion option liability discount | 25,000 | |
Change in the fair value of embedded conversion option liability | 28,713 | |
Changes in operating assets and liabilities: | ||
Change in Accounts payable | 23,378 | 5,353 |
Change in Accrued liabilities | 5,807 | 2,860 |
Net cash used in operating activities | (305,157) | (436,727) |
Cash Flows from Investing Activities: | ||
Purchase of property and equipment | (40,908) | |
Cash proceeds from sale of property and equipment | 26,000 | |
Net cash provided by (used in) investing activities | 26,000 | (40,908) |
Cash Flows from Financing Activities: | ||
Cash proceeds from sale of stock | 179,450 | 384,500 |
Cash proceeds from note payable | 45,000 | 40,000 |
Cash proceeds from loan from related party | 10,000 | 12,500 |
Cash payments against note payable | (17,404) | (20,901) |
Net cash provided by financing activities | 217,046 | 416,099 |
Net decrease in cash and cash equivalents | (62,112) | (61,536) |
Cash and cash equivalents, beginning of the period | 63,914 | 125,450 |
Cash and cash equivalents, end of the period | $ 1,802 | $ 63,914 |
Supplemental disclosures of cash flow information: | ||
Cash paid for income taxes | ||
Cash paid for interest | $ 1,546 | $ 1,536 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Issuance of common stock for prepaid consulting services and fundraising advisor | 150,000 | |
Cancellation of 5,000,000 common shares per settlement | 5,000 | |
Gross up on debt principal, offset by debt discount to normalize interest on note payable | 11,745 | 33,233 |
Issuance of common stock in conjunction with note payable | $ 30,000 | |
Issuance of note payable for deferred offering costs | $ 75,000 |
Note 1 - Nature of Operations a
Note 1 - Nature of Operations and Going Concern | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Note 1 - Nature of Operations and Going Concern | NOTE 1 NATURE OF OPERATIONS AND GOING CONCERN As used herein and except as otherwise noted, the term Company, it(s), our, us, we and EMAV shall mean EMAV Holdings, Inc., a Delaware corporation, and its consolidated subsidiary Electric Motors and Vehicles Company. EMAV Holdings, Inc. was originally incorporated on May 14, 1987 in Florida as Ventura Promotion Group, Inc. The Company became a public company in July 1998 and on November 12, 1998 changed its name to American Surface Technologies International, Inc. In September 2001, the State of Florida administratively dissolved the Company for not maintaining proper filings with the state and not paying franchise tax fees. In 2006, the Company changed its name to Global Environmental, Inc. In December 2007, the Company re-domiciled to Delaware and on August 27, 2008, changed its name to Ravenwood Bourne, Ltd. Effective September 30, 2011 the Company changed its name to PopBig, Inc. On December 26, 2013, the Company changed its name to EMAV Holdings, Inc. and entered into a merger agreement to acquire Electric Motors and Vehicles Company, a Delaware corporation (EMAVC). The merger completed on December 27, 2013 and was accounted for as a reverse merger and recapitalization in which EMAVC is deemed to be the accounting acquirer. Consequently, the assets and liabilities and the operations are reflected as the historical financial statements prior to the merger will be those of EMAVC and are recorded at the historical cost basis of EMAVC, and the consolidated financial statements subsequent to completion of the merger include the assets and liabilities of EMAV and EMAVC, and the operations of the combined Company from the closing date of the merger. The Company elected to change its fiscal year end to be December 31. Electric Motors And Vehicles Company was formed under the laws of Delaware on March 11, 2010. EMAVCs principal business is electric vehicle manufacturing and sales. It plans to design, assemble, and sell premium electric rugged sport adventure vehicles directly through a network of dealerships. EMAVC will deploy a unique approach to build and bring its vehicles to market. Rather than creating a new vehicle and building out a new distribution network, EMAVC will use the four-door Jeep Wrangler as the platform for its signature electric vehicle. Going Concern The Companys consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has not yet established a stable ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The Company funded its operations in 2015 through sale of its equity, debt financing and sale of its vehicle. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary financing to continue operations, and the attainment of profitable operations. The Company incurred a net loss of $488,517 for the year ended December 31, 2015, used net cash in operating activities of $305,157, had a working capital deficit of $243,914, and has an accumulated deficit of $5,298,647 as of December 31, 2015. These factors, among others raise a substantial doubt regarding the Companys ability to continue as a going concern. If the Company is unable to obtain adequate capital, it could be forced to cease operations. The accompanying consolidated financial statements do not include any adjustments to reflect the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Note 2 - Significant Accounting
Note 2 - Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Note 2 - Significant Accounting Policies | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following summary of significant accounting policies of the Company is presented to assist in the understanding of the Companys consolidated financial statements. The consolidated financial statements and notes are the representation of the Companys management who is responsible for their integrity and objectivity. The consolidated financial statements of the Company conform to accounting principles generally accepted in the United States of America (U.S. GAAP). Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company, and its wholly-owned subsidiary Electric Motors and Vehicles Company. All intercompany balances and transactions are eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Companys estimates of valuation of equity instruments. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. Cash and Cash Equivalents The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. Property and Equipment Property and equipment consists of office equipment which is recorded at cost and is depreciated on a straight-line basis over its estimated useful life of three to five years. Expenditures for renewals and betterments are capitalized. Expenditures for minor items, repairs and maintenance are charged to operations as incurred. Gain or loss upon sale or retirement due to obsolescence is reflected in the operating results in the period the event takes place. Long-lived Assets In accordance with ASC 360, Property, Plant, and Equipment Fair value of Financial Instruments and Fair Value Measurements ASC 820, Fair Value Measurements and Disclosures, Level 1 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Companys financial instruments consist principally of cash, accounts payable, accrued liabilities, loan payable to a related party and promissory notes payable. Pursuant to ASC 820 and ASC 825, Financial Instruments Assets and liabilities measured at fair value on a recurring and non-recurring basis consist of the following at December 31, 2015: Fair Value Measurements at December 31, 2015 Carrying Value at December 31, 2015 (Level 1) (Level 2) (Level 3) Embedded Conversion Option Liability $ 78,713 $ - $ 78,713 $ - The following is a summary of activity of Level 2 assets and liabilities for the period ended December 31, 2015: Embedded conversion option liability Balance January 1, 2015 $ - Additions 50,000 Change in fair value 28,713 Balance December 31, 2015 $ 78,713 Changes in fair value of the embedded conversion option liability are included in other income (expense) in the accompanying consolidated statements of operations. Revenue Recognition The Company recognizes revenues when persuasive evidence of an arrangement exists; delivery has occurred; price is fixed or determinable; and collectability of the related receivable is reasonably assured. The Company closely follows the provisions of ASC 605 Revenue Recognition Earnings (Loss) Per Common Share The Company computes net earnings (loss) per share in accordance with ASC 260, Earnings per Share Equity Instruments Issued to Non-Employees for Acquiring Goods or Services Issuances of the Companys common stock or warrants for acquiring goods or services are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The measurement date for the fair value of the equity instruments issued to consultants or vendors is determined at the earlier of (i) the date at which a commitment for performance to earn the equity instruments is reached (a performance commitment which would include a penalty considered to be of a magnitude that is a sufficiently large disincentive for nonperformance) or (ii) the date at which performance is complete. However, situations may arise in which counter performance may be required over a period of time but the equity award granted to the party performing the service is fully vested and non-forfeitable on the date of the agreement. As a result, in this situation in which vesting periods do not exist as the instruments fully vested on the date of agreement, the Company determines such date to be the measurement date and will record the estimated fair market value of the instruments granted as a prepaid expense and amortize such amount to general and administrative expense in the accompanying statement of operations over the contract period. When it is appropriate for the Company to recognize the cost of a transaction during financial reporting periods prior to the measurement date, for purposes of recognition of costs during those periods, the equity instrument is measured at the then-current fair values at each of those interim financial reporting dates. Non-Cash Equity Transactions Shares of equity instruments issued for non-cash consideration are recorded at the estimated fair market value of the consideration granted based on the estimated fair market value of the equity instrument, or at the estimated fair market value of the goods or services received whichever is more readily determinable. Income Taxes The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income Taxes The Company follows the provisions of ASC 740-10, Accounting for Uncertain Income Tax Positions Recent Accounting Pronouncements We qualify as an emerging growth company Consolidation Reporting In February 2015, the FASB issued ASU 2015-02, " Consolidation: Amendments to the Consolidation Analysis Debt Issuance Costs In April 2015, the FASB issued ASU 2015-03, " InterestImputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs New Accounting Pronouncements In May 2014, and later amended in August 2015, the Financial Accounting Standards Board (FASB) issued new Accounting Standards Update (ASU) regarding revenue recognition under GAAP. This new guidance will supersede nearly all existing revenue recognition guidance and, and is effective for public entities for annual and interim periods beginning after December 31, 2017. Early adoption is permitted for reporting periods beginning after December 15, 2016. The Company is currently evaluating the impact of this new guidance on the Companys financial statements. In August 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial Statements Going Concern, which requires management to evaluate, at each annual and interim reporting period, whether there are conditions or events that raise substantial doubt about the entitys ability to continue as a going concern within one year after the date the financial statements are issued and provide related disclosures. ASU 2014-15 is effective for annual periods ending after December 15, 2016 and interim periods thereafter. The guidance is not expected to have a material impact on the Companys financial statements. In April 2015, FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which changes the presentation of debt issuance costs in financial statements. ASU 2015-03 requires an entity to present such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of debt issuance costs will continue to be reported as interest expense. ASU 2015-03 is effective for annual reporting periods beginning after December 15, 2015. Early adoption is permitted. The guidance is not expected to have a material impact on the Companys financial statements. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The amendments in this update simplify the presentation of deferred taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. These amendments may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The amendments are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. The guidance is not expected to have a material impact on the Companys financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 840), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments in this standard are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, for a public entity. Early adoption of the amendments in this standard is permitted for all entities and the Company must recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Company is currently in the process of evaluating the effect this guidance will have on its financial statements and related disclosures. The Financial Accounting Standards Board issues Accounting Standard Updates to amend the authoritative literature in ASC. There have been a number of ASUs to date that amend the original text of ASC. The Company believes those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to the Company, or (iv) are not expected to have a significant impact on the Company. The Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
Note 3 - Property and Equipment
Note 3 - Property and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Note 3 - Property and Equipment | NOTE 3 PROPERTY AND EQUIPMENT Property and equipment consists of: December 31, December 31, 2015 2014 Property and equipment $ 7,583 $ 43,405 Less: accumulated depreciation (4,265) (8,686) Property and equipment, net $ 3,318 $ 34,719 On November 5, 2015, the Company sold its vehicle for cash of $26,000 required for its working capital and recorded a gain of $2,716, which is included in other income on the statement of operations for the year ended December 31, 2015. Depreciation expense for the years ended December 31, 2015 and 2014 was $8,117 and $8,478, respectively. |
Note 4 - Note Payable
Note 4 - Note Payable | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Note 4 - Note Payable | NOTE 4 NOTES PAYABLE Notes payable consists of: December 31, 2015 December 31, 2014 Stockholder note payable, principal balance $40,000, unsecured, 5% stated annual interest, monthly interest only payments from September 18, 2014 to April 2015, 24 fixed monthly payments of $3,290 from May 18, 2015 to April 18, 2017. Original discount of $33,233 applied to normalize interest to 5% will be amortized over the loan term (P/Note 1) $ 73,233 $ 73,233 Stockholder note payable, principal balance of $53,000, unsecured, interest bearing, monthly payment of $3,790 starting February 1, 2014, due April 1, 2016 (P/Note 2) 11,745 29,149 Note payable, principal balance of $75,000, unsecured, bearing 10% annual interest, due in full for unpaid principal and interest on or before June 30, 2016 (P/Note 3) 75,000 - Total $ 159,978 $ 102,382 Note payable - current portion $ 159,978 $ 54,506 Note payable - long term portion $ - $ 47,876 Debt discount - current portion $ 15,639 $ 15,820 Debt discount - long term portion $ - $ 15,639 On June 18, 2014, the Company executed a promissory note (the P/Note 1) with a stockholder lender in the principal amount of $40,000. The terms of the P/Note 1 require the Company to make (a) monthly interest only payments (5% annual rate) starting on September 18, 2014; (b) twenty-four (24) payments of $3,290 each, including principal and interest, beginning May 18, 2015 through April 18, 2017, at which time the entire principal amount, plus any and all accrued interest shall be due and payable; and, (c) in the event of an investment or series of related investments of at least $5,000,000 before April 18, 2017, then the entire principal balance and all accrued and unpaid interest shall be due in full in addition to a $5,000 prepayment penalty. In connection with the issuance of P/Note 1, the Company has recorded a debt discount of $33,233 applied to normalize interest to 5% which will be amortized as interest expense over the life of the P/Note 1. The Company is in default in making its note payments as of December 31, 2015 and the note holder has not made a demand for the past due payments. The Company has recognized interest expense of $11,729 and $5,865 for amortization of debt discount related to P/Note 1 for the years ended December 31, 2015 and 2014, respectively. The unamortized portion of debt discount was $15,639 and $27,368 at December 31, 2015 and 2014, respectively. In addition, the Company has recorded an interest expense of $1,633 and $1,000 for the years ended December 31, 2015 and 2014, respectively. On May 23, 2013, the Company executed a promissory note (the P/Note 2) with a stockholder in the principal amount of $53,000. The terms of the P/Note 2 required the Company to make (a) a principal payment of $3,000 on or before June 6, 2013, and (b) fifteen (15) monthly payments of $3,790 each, including principal and interest, beginning February 2014 through April 2015, at which time the entire principal amount, plus any and all accrued interest was due and payable. On March 30, 2015, the Company and the shareholder mutually agreed to extend the due date of payment of the P/Note 2 to April 1, 2016. The Company is delinquent in making four (4) monthly payments as of December 31, 2015, and the note holder has not made a demand for the past due payments. The Company has recorded interest expense of $3,688 and $3,698 on P/Note 2 for the years ended December 31, 2015 and 2014, respectively. The Company agreed to issue 100,000 shares of restricted common stock at its fair value of $30,000 to the stockholder upon execution of P/Note 2 on May 23, 2014 as an additional consideration and not as additional interest. In connection with the issuance of the common stock pursuant to P/Note 2, the Company recorded a debt discount in the amount of $30,000 which was being amortized to interest expense over the life of the Note. The Company recorded interest expense of $4,091 and $16,364 as the amortization of debt discount related to P/Note 2 for the years ended December 31, 2015 and 2014, respectively. The net book value of the unamortized portion of the debt discount was $0 and $4,091 at December 31, 2015 and 2014, respectively. On December 22, 2015, the Company executed a promissory note (P/Note 3) to pay a third party a commitment fee of $50,000 and legal fees of $25,000 for a total consideration of $75,000. The third party agreed to commit to purchase up to $5 million worth of common stock over a period of time terminating on the earlier of (i) 24 months from the date on which the agreement was executed and delivered by the Company and the third party, or (ii the date on which the third party has purchased the aggregate maximum purchase of $5 million. The promissory note bears an interest at the rate of 10% per annum. Payment of all amounts due under P/Note 3, principal and interest, is due on or before June 30, 2016. The Company has recorded the principal amount of the promissory note of $75,000 as a deferred asset upon execution of the promissory note and which will be offset as fee for capital raise against the additional paid in capital when capital is raised by the third party. The Company has recorded an interest expense of $185 for the year ended December 31, 2015. The Company has recorded total interest expense on P/Note 1 and P/Note 2 relating to amortization of debt discount of $15,817 and $22,229 for the years ended December 31, 2015 and 2014, respectively. The Company has recorded interest expense of $5,506 and $4,698 for the years ended December 31, 2015 and 2014, and accrued interest of $9,012 and $5,052 on P/Note 1, P/Note 2 and P/Note 3 as of December 31, 2015 and 2014, respectively. |
Note 5 - Convertible Note Payab
Note 5 - Convertible Note Payable | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Note 5 - Convertible Note Payable | NOTE 5 CONVERTIBLE NOTE PAYABLE Convertible note payable consists of: December 31, December 31, 2015 2014 Note payable to a third party, bearing interest of 12%, due on May 17, 2016 $ 50,000 $ - Less: debt discount (27,426) - Convertible note payable, net 22,574 - Less: current portion (22,574) - Convertible note payable, non-current $ - $ - On August 17, 2015, the Company received $45,000 from a third party against a $50,000 Convertible Promissory Note (the Note) executed on August 17, 2015. The Note bears an interest rate of 10% per annum. The maturity date of the Note is May 17, 2016 (nine months from the date of Note) and is the date upon which the principal sum of this promissory note, as well as any unpaid interest and other fees, shall be due and payable. The lender has the right at any time after the effective date, at its election, to convert all or part of the outstanding and unpaid principal sum and accrued interest into shares of fully paid and non-assessable shares of common stock of the Company as per the conversion formula: Number of shares receivable upon conversion equals the dollar conversion amount divided by the Conversion Price. The Conversion Price is the lessor of 55% of the lowest trade price in the 25 trading days previous to the conversion date. In connection with the issuance of the Note, the Company recorded a debt discount (original issuance discount) in the amount of $5,000 which will be amortized to interest expense over the term of the draw of nine months. In accordance with ASC 815, the Company recognized a debt discount related to the bifurcated embedded conversion option derivative liability in the amount of $50,000 which will be amortized to interest expense over the term of the draw and an initial change in fair value of $3,307 for a total initial embedded conversion option liability of $53,307. For the year ended December 31, 2015, the Company has recognized interest expense of $2,574 related to the amortization of the OID and $25,000 related to the amortization of the embedded conversion option liability discount as it related to this Note, and 1,849 related to interest expense on the Note. The Note balance was $50,000 and remaining unamortized debt discount was $2,426 at December 31, 2015. |
Note 6 - Derivative Financial I
Note 6 - Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Note 6 - Derivative Financial Instruments | NOTE 6 - DERIVATIVE FINANCIAL INSTRUMENTS Under the provisions of ASC 815-40, convertible instruments issued by the Company qualify for derivative treatment due to the variable conversion formula (Note 5). The embedded conversion features of the convertible note is bifurcated and recorded as a liability which is revalued at fair value each reporting date. If the fair value of the embedded conversion feature exceeds the face value of the related debt, net of other discounts, the excess is recorded as a change in fair value on the issuance date. Embedded conversion features are valued at their fair value, rather than by the intrinsic value method. The Company calculated the estimated fair values of the liabilities for embedded conversion feature at December 31, 2015 with the Black-Scholes option pricing model using the closing price of the Companys common stock at each respective date and the ranges for volatility, expected term, and risk free interest indicated in the table below. As a result, the Company recorded a change in the fair value of the liabilities for embedded conversion option derivative instruments for the year ended December 31, 2015 of $28,713 which was included in other expense (See Note 2 Fair Value Measurements). The fair market value of the Companys common stock on August 17, 2015 and December 31, 2015 was $0.60 and $0.35 per share, respectively. Embedded Conversion Options Black-Scholes Model Assumptions During The Year Ended December 31, 2015 Volatility 100.06% - 125.11% Expected term 0.38 0.75 years Risk free interest rate 0.32% - 0.65% |
Note 7 - Related Party Transact
Note 7 - Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Note 7 - Related Party Transactions | NOTE 7 RELATED PARTY TRANSACTIONS In April 2010, the Company entered into a verbal agreement with its executive director for providing business consulting and marketing services to the Company. No fixed compensation was agreed at the time of the verbal agreement. On November 14, 2014, the executive director resigned from his position and entered into a separation agreement which provided for, among other covenants and conditions, a mutual release of all claims between the Company and its executive director. The executive director was previously allotted 13,000,000 shares of the Companys common stock. Pursuant to the separation agreement, the executive agreed to retain 1,000,000 shares of common stock, and the Company had the sole discretion to determine the disposition of the remaining 12,000,000 shares of common stock. The Company has allocated these 12,000,000 shares of common stock as follows: (i) 6,125,000 shares of common stock have been reallocated to other persons and the Company has recorded an expense of $3,062,500 upon their issuance, (ii) 5,000,000 shares of common stock were cancelled and returned to the status of authorized and unissued shares, and (iii) the remaining 875,000 shares of common stock to remain issued and held in treasury as of December 31, 2015 (See Note 9). The Company made no cash payments to the executive director for consulting fees for the year ended December 31, 2015 and recorded an expense of $54,100 as consulting fees for the year ended December 31, 2014. The Company has engaged an entity owned by the Chief Executive Officer/Director (Officer) of the Company to provide business advisory, consulting, and legal services. The Company has recorded and paid legal and professional fees of The Officer has occasionally provided short term advances to the Company for its working capital needs. The short term advances are non-interest bearing, unsecured and due on demand. The Company is indebted to the Officer $22,500 and $12,500 due and payable as of December 31, 2015 and 2014, respectively. |
Note 8 - Commitments and Contin
Note 8 - Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Note 8 - Commitments and Contingencies | NOTE 8 COMMITMENTS AND CONTINGENCIES Settlement of litigation The Company entered into an agreement for public relations services (the Agreement) with an unrelated third party (DLC) in September 2010. The Company disputed the quality of the services rendered and failed to tender final payment under the Agreement. DLC initiated legal action against the Company in January 2012 for collection under the Agreement. The Company did not have the resources to contest the action, so a default judgment was entered against the Company in favor of DLC in July 2012 in the amount of $14,425. Thereafter, DLC sought to collect on the judgment, and the total amount claimed by DLC grew to over $25,000 as DLC was entitled to collect attorneys fees under the Agreement. In October 2013, the entire Agreement with DLC was negotiated and settled, requiring the Company to pay DLC $3,000 in November 2013 and $1,000 per month for the next 12-month period. The Company agreed not to contest DLCs ownership of 80,000 shares of the Companys stock. As of December 31, 2015 and 2014, the remaining liability on the settlement of $7,000 is included in accounts payable in accompanying consolidated financial statements. The Company plans on paying DLC for the months of May 2014 through November 2014, which DLC has yet to demand. Legal Costs and Contingencies In the normal course of business, the Company incurs costs to hire and retain external legal counsel to advise it on regulatory, litigation and other matters. The Company expenses these costs as the related services are received. If a loss is considered probable and the amount can be reasonable estimated, the Company recognizes an expense for the estimated loss. If the Company has the potential to recover a portion of the estimated loss from a third party, the Company makes a separate assessment of recoverability and reduces the estimated loss if recovery is also deemed probable. |
Note 9 - Stockholders' Equity
Note 9 - Stockholders' Equity | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Note 9 - Stockholders' Equity | NOTE 9 STOCKHOLDERS EQUITY The Companys capitalization at December 31, 2015 was 300,000,000 authorized common shares with a par value of $0.001, and 10,000,000 authorized preferred shares with a par value of $0.001. Common stock During the year ended December 31, 2015, the Company sold 358,900 shares of its common stock at $0.50 per share and received total cash consideration of $179,450. All the common shares were sold to accredited investors pursuant to separate Private Placements. On September 1, 2014, the Company engaged Fastnet Advisors, LLC (the Fastnet) to provide corporate business advisory services to the Company. The engagement was for an initial period of six (6) months. The Company agreed to pay Fastnet $3,000 for September 2014; $4,000 per month for October 2014, November 2014 and December 2014; and $5,000 per month for January 2015 and February, 2015. The Company made cash payments to Fastnet of $9,500 for consulting services rendered and accrued the remainder expense of $15,500 for consulting services rendered as accounts payable as of December 31, 2015. In addition, on November 14, 2014, the Company agreed to issue to Fastnet 250,000 shares of restricted common stock valued at $125,000 based upon the selling price of $0.50 per share the Company was able to obtain for sales of similar stock around the date of issuance. The total value of the engagement was estimated at $150,000, which was recorded as prepaid expense in 2014 to be amortized over the six (6) month term of the engagement. The remaining prepaid expense of $42,666 at December 31, 2014 was amortized by the Company and recorded as consulting expense for the year ended December 31, 2015. On November 14, 2014, pursuant to a separation agreement with an executive, the Company received 875,000 shares of returned common stock, which remain issued and not outstanding and held as treasury shares as of December 31, 2015 (see Note 7). On December 1, 2014, the Company engaged a financial advisor and placement agent to raise capital for the Company for a six months term. Pursuant to the terms of the agreement, the Company paid a non-refundable retainer of $10,000 and issued 50,000 shares of its common stock valued at $25,000 based upon the selling price of $0.50 per share the Company was able to obtain for sales of similar stock around the date of issuance. The Company has expensed the offering costs of $35,000 for raising capital as consulting expense in the accompanying financial statements as of December 31, 2015. Warrants In April 2010, the Company granted three individuals, warrants to purchase 2,500,000 shares of common stock at an exercise price of $0.25 per share as compensation in connection with the individuals providing introductions for raising capital for the Company. The warrants have a six year term and expire in April 2016. The fair value of 2,500,000 warrants at the original issue date was estimated to be $1,077,927 using a Black-Scholes option pricing model with an expected life of 6 years, a risk free interest rate of 2.96%, a dividend yield of 0%, and an expected volatility of 100%. The expected volatility was estimated to be 100% since the Company's stock is not traded and no historical volatility data is available. As these services were provided as part of the Companys equity funding, the value of the warrants were recorded within equity as part of the accounting for the related equity transactions. There have been no other grants of warrant instruments through December 31, 2015. The Company has not established a stock option plan nor has issued any stock options through December 31, 2015. As a result of all common stock issuances and cancellations, the total common shares issued at December 31, 2015 were 47,780,465 of which 46,905,465 shares were outstanding and the remaining 875,000 shares were held in treasury. Preferred Stock At December 31, 2015, the Company had no shares of preferred stock issued or outstanding. |
Note 10 - Income Taxes
Note 10 - Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Note 10 - Income Taxes | NOTE 10 - INCOME TAX The following is a reconciliation of the provision for income taxes at the U.S. federal income tax rate of 34% and 8.7% state income tax rate for Delaware for the years ended December 31, 2015 and 2014, respectively, to the income taxes reflected in the Consolidated Statements of Operations: For the year ended December 31, 2015 2014 Tax expense at statutory rate - federal (34.00)% (34.00)% State tax expense, net of federal benefit (5.74)% (5.74)% Valuation allowance 39.74% 39.74% Tax expense at actual rate - - The tax effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities at December 31, 2015 and 2014 are as follows: For the year ended December 31, 2015 2014 Deferred tax assets and liabilities Net operating loss carry forward $2,077,132 $1,911,642 Valuation allowance $(2,077,132) $(1,911,642) Net deferred tax assets - - Deferred income taxes are provided for the tax effects of transactions reported in the financial statements and consist of deferred taxes related primarily to differences between the bases of certain assets and liabilities for financial and tax reporting. The deferred taxes represent the future tax return consequences of those differences, which will either be deductible or taxable when the assets and liabilities are recovered or settled. At December 31, 2015 and 2014, the Company had net operating loss carry-forwards of approximately $5.2 million 5,200,000 4,800,000 In the normal course of business, the Companys income tax returns are subject to examination by various taxing authorities. Such examinations may result in future tax and interest assessment by these taxing authorities. Accordingly, the Company believes that it is more likely than not that it will realize the benefits of tax positions it has taken in its tax returns or for the amount of any tax benefit that exceeds the cumulative probability threshold in accordance with FASB ASC 740-10-15. Differences between the estimated and actual amounts determined upon ultimate resolution, individually or in the aggregate, are not expected to have a material adverse effect on the companys financial position. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for unrecognized tax benefits. As of December 31, 2015, tax years 2014, 2013 and 2012 remain open for IRS audit. The Company has received no notice of audit from the Internal Revenue Service for any of the open tax years. |
Note 11 - Concentration of Cred
Note 11 - Concentration of Credit Risk | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Note 11 - Concentration of Credit Risk | NOTE 11- CONCENTRATION OF CREDIT RISK The Company maintains its cash in bank and financial institution deposits that at times may exceed federally insured limits. The Company has not experienced any losses related to this in any such accounts. The Companys bank balances did not exceed FDIC insured amounts as of December 31, 2015 and 2014, respectively. |
Note 12 - Subsequent Events
Note 12 - Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Notes | |
Note 12 - Subsequent Events | NOTE 12 SUBSEQUENT EVENTS We have evaluated subsequent events and transactions that occurred through the date and time our financial statements were issued for potential recognition or disclosure in the accompanying financial statements. On February 4, 2016 and February 29, 2016, the Company closed and funded two financing transactions by entering into Securities Purchase Agreements (the "Purchase Agreements") with a third party, a Delaware limited liability company ("Holder"). Pursuant to the Purchase Agreements, the Holder purchased from the Company two Convertible Promissory Notes (the "Notes", and together with the Purchase Agreements, the "Transaction Documents") in the aggregate principal amounts of $86,000 each (the "Principal Amount"), and delivered net proceeds to the Company of $74,900 on February 4, 2016 and $74,900 on February 29, 2016, respectively. The Principal Amount bears interest at 6% per annum. All outstanding principal and accrued interest on the Notes are due and payable on the maturity dates, which are January 28, 2017 and March 01, 2017 (the "Maturity Dates"). The Holder may extend the Maturity Dates by providing us with written notice at least 5 days before the Maturity Dates. However, The Holder may only extend the Maturity Dates for up to an additional one-year period. Any amount of principal or interest that is due under the Notes, which is not paid by the Maturity Dates, will bear interest at the rate of 24% per annum until it is paid (the "Note Default Interest"). Further, the Company is obligated to reduce the Principal Amounts by 50% on or before 28 July 2016, either through (i) accessing the funds under the equity purchase agreements; or, (ii) subsequent financing closed by the Company. Should we fail to do so, the then outstanding principal amount will be increased by 200%. The Notes are convertible into shares of the Company's common stock at any time at the discretion of the Holder at a conversion price per share equal to the lesser of: (a) the closing price of the common stock on the day before the conversion; or, (b) 50% of the lowest trading price for the common stock during the 30-days of trading ending on the latest complete trading day prior to the date of conversion (the "Conversion Price"). The Conversion Price is subject to adjustment for stock splits, reverse stock splits, stock dividends and other similar transactions and subject to the terms of the Transaction Documents. We agreed to reserve that number of shares of Common Stock equal to 70% of our authorized shares of common stock not otherwise issued. The Notes may be repaid in whole at any time. The repayment amount is subject to a premium on the outstanding principal balance of 150%. If the Company fails to meet its obligations under the terms of the Notes, the Notes shall become immediately due and payable and subject to penalties provided for in the Notes. All amounts due under the Notes become immediately due and payable by the Company upon the occurrence of an event of default, including but not limited to (i) our sale of all or substantially all of our assets, (ii) our failure to pay the amounts due at maturity, (iii) our failure to issue shares of Common Stock upon any conversion of the Note, (iv) our breach of the covenants, representations or warranties under the Note, (v) our appointment of a trustee, (vi) a judgment against us in excess of $50,000 (subject to a 20 day cure period), (vii) our liquidation, (viii) the filing of a bankruptcy petition by us or against us, (ix) our failure to remain current in our reporting obligations under the Securities Exchange Act of 1934, (x) the delisting of our Common Stock from the OTCQB or equivalent exchange, (xi) a restatement of our financial statements for any period from two years prior to the Note until the Note has been paid in full, or (xi) our effectuation of a reverse stock split without 20 days prior written notice to the Holder. |
Note 1 - Nature of Operations19
Note 1 - Nature of Operations and Going Concern: Substantial Doubt about Going Concern (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Substantial Doubt about Going Concern | Going Concern The Companys consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has not yet established a stable ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The Company funded its operations in 2015 through sale of its equity, debt financing and sale of its vehicle. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary financing to continue operations, and the attainment of profitable operations. The Company incurred a net loss of $488,517 for the year ended December 31, 2015, used net cash in operating activities of $305,157, had a working capital deficit of $243,914, and has an accumulated deficit of $5,298,647 as of December 31, 2015. These factors, among others raise a substantial doubt regarding the Companys ability to continue as a going concern. If the Company is unable to obtain adequate capital, it could be forced to cease operations. The accompanying consolidated financial statements do not include any adjustments to reflect the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Note 2 - Significant Accounti20
Note 2 - Significant Accounting Policies: Principles of Consolidation (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company, and its wholly-owned subsidiary Electric Motors and Vehicles Company. All intercompany balances and transactions are eliminated in consolidation. |
Note 2 - Significant Accounti21
Note 2 - Significant Accounting Policies: Use of Estimates (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Companys estimates of valuation of equity instruments. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. |
Note 2 - Significant Accounti22
Note 2 - Significant Accounting Policies: Cash and Cash Equivalents (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. |
Note 2 - Significant Accounti23
Note 2 - Significant Accounting Policies: Long-lived Assets (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Long-lived Assets | Property and Equipment Property and equipment consists of office equipment which is recorded at cost and is depreciated on a straight-line basis over its estimated useful life of three to five years. Expenditures for renewals and betterments are capitalized. Expenditures for minor items, repairs and maintenance are charged to operations as incurred. Gain or loss upon sale or retirement due to obsolescence is reflected in the operating results in the period the event takes place. Long-lived Assets In accordance with ASC 360, Property, Plant, and Equipment |
Note 2 - Significant Accounti24
Note 2 - Significant Accounting Policies: Fair Value of Financial Instruments and Fair Value Measurements (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Fair Value of Financial Instruments and Fair Value Measurements | Fair value of Financial Instruments and Fair Value Measurements ASC 820, Fair Value Measurements and Disclosures, Level 1 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Companys financial instruments consist principally of cash, accounts payable, accrued liabilities, loan payable to a related party and promissory notes payable. Pursuant to ASC 820 and ASC 825, Financial Instruments Assets and liabilities measured at fair value on a recurring and non-recurring basis consist of the following at December 31, 2015: Fair Value Measurements at December 31, 2015 Carrying Value at December 31, 2015 (Level 1) (Level 2) (Level 3) Embedded Conversion Option Liability $ 78,713 $ - $ 78,713 $ - The following is a summary of activity of Level 2 assets and liabilities for the period ended December 31, 2015: Embedded conversion option liability Balance January 1, 2015 $ - Additions 50,000 Change in fair value 28,713 Balance December 31, 2015 $ 78,713 Changes in fair value of the embedded conversion option liability are included in other income (expense) in the accompanying consolidated statements of operations. |
Note 2 - Significant Accounti25
Note 2 - Significant Accounting Policies: Revenue Recognition (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Revenue Recognition | Revenue Recognition The Company recognizes revenues when persuasive evidence of an arrangement exists; delivery has occurred; price is fixed or determinable; and collectability of the related receivable is reasonably assured. The Company closely follows the provisions of ASC 605 Revenue Recognition |
Note 2 - Significant Accounti26
Note 2 - Significant Accounting Policies: Earnings (loss) Per Common Share (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Earnings (loss) Per Common Share | Earnings (Loss) Per Common Share The Company computes net earnings (loss) per share in accordance with ASC 260, Earnings per Share |
Note 2 - Significant Accounti27
Note 2 - Significant Accounting Policies: Income Taxes (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income Taxes The Company follows the provisions of ASC 740-10, Accounting for Uncertain Income Tax Positions |
Note 2 - Significant Accounti28
Note 2 - Significant Accounting Policies: Recent Accounting Pronouncements (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Policies | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements We qualify as an emerging growth company Consolidation Reporting In February 2015, the FASB issued ASU 2015-02, " Consolidation: Amendments to the Consolidation Analysis Debt Issuance Costs In April 2015, the FASB issued ASU 2015-03, " InterestImputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs New Accounting Pronouncements In May 2014, and later amended in August 2015, the Financial Accounting Standards Board (FASB) issued new Accounting Standards Update (ASU) regarding revenue recognition under GAAP. This new guidance will supersede nearly all existing revenue recognition guidance and, and is effective for public entities for annual and interim periods beginning after December 31, 2017. Early adoption is permitted for reporting periods beginning after December 15, 2016. The Company is currently evaluating the impact of this new guidance on the Companys financial statements. In August 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial Statements Going Concern, which requires management to evaluate, at each annual and interim reporting period, whether there are conditions or events that raise substantial doubt about the entitys ability to continue as a going concern within one year after the date the financial statements are issued and provide related disclosures. ASU 2014-15 is effective for annual periods ending after December 15, 2016 and interim periods thereafter. The guidance is not expected to have a material impact on the Companys financial statements. In April 2015, FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which changes the presentation of debt issuance costs in financial statements. ASU 2015-03 requires an entity to present such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of debt issuance costs will continue to be reported as interest expense. ASU 2015-03 is effective for annual reporting periods beginning after December 15, 2015. Early adoption is permitted. The guidance is not expected to have a material impact on the Companys financial statements. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The amendments in this update simplify the presentation of deferred taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. These amendments may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The amendments are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. The guidance is not expected to have a material impact on the Companys financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 840), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments in this standard are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, for a public entity. Early adoption of the amendments in this standard is permitted for all entities and the Company must recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Company is currently in the process of evaluating the effect this guidance will have on its financial statements and related disclosures. The Financial Accounting Standards Board issues Accounting Standard Updates to amend the authoritative literature in ASC. There have been a number of ASUs to date that amend the original text of ASC. The Company believes those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to the Company, or (iv) are not expected to have a significant impact on the Company. The Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
Note 2 - Significant Accounti29
Note 2 - Significant Accounting Policies: Fair Value of Financial Instruments and Fair Value Measurements: Fair Value Measurements, Recurring and Nonrecurring (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Fair Value Measurements, Recurring and Nonrecurring | Fair Value Measurements at December 31, 2015 Carrying Value at December 31, 2015 (Level 1) (Level 2) (Level 3) Embedded Conversion Option Liability $ 78,713 $ - $ 78,713 $ - |
Note 2 - Significant Accounti30
Note 2 - Significant Accounting Policies: Fair Value of Financial Instruments and Fair Value Measurements: Summary of activity of Level 2 assets and liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Summary of activity of Level 2 assets and liabilities | Embedded conversion option liability Balance January 1, 2015 $ - Additions 50,000 Change in fair value 28,713 Balance December 31, 2015 $ 78,713 |
Note 3 - Property and Equipme31
Note 3 - Property and Equipment: Schedule of Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Schedule of Property and Equipment | December 31, December 31, 2015 2014 Property and equipment $ 7,583 $ 43,405 Less: accumulated depreciation (4,265) (8,686) Property and equipment, net $ 3,318 $ 34,719 |
Note 4 - Note Payable_ Schedule
Note 4 - Note Payable: Schedule of note payable (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Schedule of note payable | December 31, 2015 December 31, 2014 Stockholder note payable, principal balance $40,000, unsecured, 5% stated annual interest, monthly interest only payments from September 18, 2014 to April 2015, 24 fixed monthly payments of $3,290 from May 18, 2015 to April 18, 2017. Original discount of $33,233 applied to normalize interest to 5% will be amortized over the loan term (P/Note 1) $ 73,233 $ 73,233 Stockholder note payable, principal balance of $53,000, unsecured, interest bearing, monthly payment of $3,790 starting February 1, 2014, due April 1, 2016 (P/Note 2) 11,745 29,149 Note payable, principal balance of $75,000, unsecured, bearing 10% annual interest, due in full for unpaid principal and interest on or before June 30, 2016 (P/Note 3) 75,000 - Total $ 159,978 $ 102,382 Note payable - current portion $ 159,978 $ 54,506 Note payable - long term portion $ - $ 47,876 Debt discount - current portion $ 15,639 $ 15,820 Debt discount - long term portion $ - $ 15,639 |
Note 5 - Convertible Note Pay33
Note 5 - Convertible Note Payable: Convertible Debt (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Convertible Debt | December 31, December 31, 2015 2014 Note payable to a third party, bearing interest of 12%, due on May 17, 2016 $ 50,000 $ - Less: debt discount (27,426) - Convertible note payable, net 22,574 - Less: current portion (22,574) - Convertible note payable, non-current $ - $ - |
Note 6 - Derivative Financial34
Note 6 - Derivative Financial Instruments: Schedule of Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Schedule of Derivative Instruments | Black-Scholes Model Assumptions During The Year Ended December 31, 2015 Volatility 100.06% - 125.11% Expected term 0.38 0.75 years Risk free interest rate 0.32% - 0.65% |
Note 10 - Income Taxes_ Schedul
Note 10 - Income Taxes: Schedule of income tax reconciliation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Schedule of income tax reconciliation | For the year ended December 31, 2015 2014 Tax expense at statutory rate - federal (34.00)% (34.00)% State tax expense, net of federal benefit (5.74)% (5.74)% Valuation allowance 39.74% 39.74% Tax expense at actual rate - - |
Note 10 - Income Taxes_ Sched36
Note 10 - Income Taxes: Schedule of deferred tax assets and liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tables/Schedules | |
Schedule of deferred tax assets and liabilities | For the year ended December 31, 2015 2014 Deferred tax assets and liabilities Net operating loss carry forward $2,077,132 $1,911,642 Valuation allowance $(2,077,132) $(1,911,642) Net deferred tax assets - - |
Note 1 - Nature of Operations37
Note 1 - Nature of Operations and Going Concern (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Details | |
Entity Incorporation, Date of Incorporation | May 14, 1987 |
Entity Incorporation, State Country Name | Florida |
Note 1 - Nature of Operations38
Note 1 - Nature of Operations and Going Concern: Substantial Doubt about Going Concern (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Details | ||
Net loss | $ 488,517 | $ 3,735,480 |
Net cash used in operating activities | 305,157 | 436,727 |
Working Capital | 243,914 | |
Accumulated deficit | $ 5,298,647 | $ 4,810,130 |
Note 2 - Significant Accounti39
Note 2 - Significant Accounting Policies: Fair Value of Financial Instruments and Fair Value Measurements: Fair Value Measurements, Recurring and Nonrecurring (Details) | Dec. 31, 2015USD ($) |
Embedded conversion option liability | $ 78,713 |
Fair Value, Inputs, Level 2 | |
Represents the monetary amount of EmbeddedConversionOptionLiaibility, as of the indicated date. | $ 78,713 |
Note 2 - Significant Accounti40
Note 2 - Significant Accounting Policies: Fair Value of Financial Instruments and Fair Value Measurements: Summary of activity of Level 2 assets and liabilities (Details) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Details | |
Convertible Debt | $ 50,000 |
Change in the fair value of embedded conversion option liability | 28,713 |
Embedded conversion option liability | $ 78,713 |
Note 3 - Property and Equipme41
Note 3 - Property and Equipment: Schedule of Property and Equipment (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Details | ||
Property, Plant and Equipment, Gross | $ 7,583 | $ 43,405 |
Property, Plant and Equipment, Other, Accumulated Depreciation | (4,265) | (8,686) |
Property and equipment, net | $ 3,318 | $ 34,719 |
Note 3 - Property and Equipme42
Note 3 - Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Details | ||
Cash proceeds from sale of property and equipment | $ 26,000 | |
Gain on sale of property and equipment | 2,716 | |
Depreciation | $ 8,117 | $ 8,478 |
Note 4 - Note Payable_ Schedu43
Note 4 - Note Payable: Schedule of note payable (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Other Notes Payable | $ 159,978 | $ 102,382 |
Other Notes Payable, Current | 159,978 | 54,506 |
Other Notes Payable, Noncurrent | 47,876 | |
Debt Discount - current | 15,639 | 15,820 |
Debt Discount - long term | 15,639 | |
P/Note 1 | ||
Other Notes Payable | 73,233 | 73,233 |
P/Note 2 | ||
Other Notes Payable | 11,745 | $ 29,149 |
P/Note 3 | ||
Other Notes Payable | $ 75,000 |
Note 4 - Note Payable (Details)
Note 4 - Note Payable (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | May. 23, 2013 | |
Cash proceeds from note payable | $ 45,000 | $ 40,000 | |
Interest expense | 50,746 | 26,930 | |
Debt Instrument, Unamortized Discount | 2,426 | ||
P/Note 1 | |||
Cash proceeds from note payable | 40,000 | ||
Interest expense | 1,633 | 1,000 | |
Debt Instrument, Unamortized Discount | 15,639 | 27,368 | |
P/Note 1 | Amortization of Debt Discount | |||
Interest expense | 11,729 | 5,865 | |
P/Note 2 | |||
Debt Instrument, Unamortized Discount | 0 | 4,091 | |
Original Amount of Promissory Note | $ 53,000 | ||
Interest Expense, Debt | 3,688 | 3,698 | |
P/Note 2 | Amortization of Debt Discount | |||
Interest expense | 4,091 | $ 16,364 | |
P/Note 3 | |||
Cash proceeds from note payable | $ 75,000 |
Note 5 - Convertible Note Pay45
Note 5 - Convertible Note Payable: Convertible Debt (Details) | Dec. 31, 2015USD ($) |
Details | |
Convertible Debt | $ 50,000 |
Debt Discount on Convertible Notes Payable, Current | (27,426) |
Convertible note payable, current portion, net of discount of $27,426 at December 31, 2015 | $ 22,574 |
Note 5 - Convertible Note Pay46
Note 5 - Convertible Note Payable (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Details | ||
Cash proceeds from note payable | $ 45,000 | $ 40,000 |
Convertible Debt | 50,000 | |
Interest Expense Related to the amortization of the OID | 2,574 | |
Interest Expense Related to the amortization of the embedded conversion option liability discount | 25,000 | |
Debt Instrument, Unamortized Discount | $ 2,426 |
Note 6 - Derivative Financial47
Note 6 - Derivative Financial Instruments (Details) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Details | |
Change in the fair value of embedded conversion option liability | $ 28,713 |
Note 6 - Derivative Financial48
Note 6 - Derivative Financial Instruments: Schedule of Derivative Instruments (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Minimum | |
Fair Value Assumptions, Expected Volatility Rate | 100.06% |
Fair Value Assumptions, Expected Term | 4 months 17 days |
Fair Value Assumptions, Risk Free Interest Rate | 0.32% |
Maximum | |
Fair Value Assumptions, Expected Volatility Rate | 125.11% |
Fair Value Assumptions, Expected Term | 9 months |
Fair Value Assumptions, Risk Free Interest Rate | 0.65% |
Note 7 - Related Party Transa49
Note 7 - Related Party Transactions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Details | ||
Consulting fees paid to executive director | $ 54,100 | |
Consulting fees paid to related party | $ 109,500 | 42,500 |
Accounts Payable, Related Parties, Current | 0 | 0 |
Due to Related Parties, Current | $ 22,500 | $ 12,500 |
Note 8 - Commitments and Cont50
Note 8 - Commitments and Contingencies (Details) - USD ($) | 1 Months Ended | ||
Oct. 31, 2013 | Jul. 31, 2012 | Dec. 31, 2015 | |
Litigation Settlement, Amount | $ 14,425 | ||
Estimated Litigation Liability | $ 25,000 | ||
Initial payment to settle litigation debt | $ 3,000 | ||
Subsequent monthly payments to settle litigation debt | $ 1,000 | ||
RemainingLiabilityOnTheSettlementMember | |||
Accounts Payable, Current | $ 7,000 |
Note 9 - Stockholders' Equity (
Note 9 - Stockholders' Equity (Details) - USD ($) | 12 Months Ended | |||||||
Dec. 31, 2015 | Dec. 31, 2014 | Feb. 28, 2015 | Jan. 31, 2015 | Nov. 30, 2014 | Nov. 14, 2014 | Oct. 31, 2014 | Sep. 30, 2014 | |
Common stock shares authorized | 300,000,000 | 300,000,000 | ||||||
Common stock par value | $ 0.001 | $ 0.001 | ||||||
Preferred Stock, Shares Authorized | 10,000,000 | |||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | |||||||
Common shares sold at $0.50 per share | $ 179,450 | $ 384,500 | ||||||
Prepaid expenses | $ 1,000 | 77,666 | ||||||
Treasury Stock, Shares | 875,000 | |||||||
Common stock issued to fundraising advisors for capital raise | $ 25,000 | |||||||
Common stock shares issued | 47,780,465 | 47,421,565 | ||||||
Common stock shares outstanding | 46,905,465 | 46,546,565 | ||||||
Treasury stock shares issued | 875,000 | 875,000 | ||||||
Fastnet Advisors LLC | ||||||||
Accounts Payable, Current | $ 4,000 | $ 5,000 | $ 5,000 | $ 4,000 | $ 4,000 | $ 3,000 | ||
Common Stock, Shares Subscribed but Unissued | 250,000 | |||||||
AccruedStockPayable | $ 125,000 | |||||||
Common Stock | ||||||||
Common shares sold at $0.50 per share - shares | 358,900 | 769,000 | ||||||
Common shares sold at $0.50 per share | $ 359 | $ 769 | ||||||
Common stock issued to fundraising advisors for capital raise - shares | 50,000 | |||||||
Common stock issued to fundraising advisors for capital raise | $ 50 |
Note 9 - Stockholders' Equity_
Note 9 - Stockholders' Equity: Warrants (Details) | 1 Months Ended |
Apr. 30, 2010USD ($)shares | |
Details | |
Warrants Granted to Three Individuals | shares | 2,500,000 |
Fair Value of Warrants Granted to Three Individuals | $ | $ 1,077,927 |
Note 10 - Income Taxes_ Sched53
Note 10 - Income Taxes: Schedule of income tax reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Details | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | (34.00%) | (34.00%) |
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Percent | (5.74%) | (5.74%) |
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent | 39.74% | 39.74% |
Note 10 - Income Taxes_ Sched54
Note 10 - Income Taxes: Schedule of deferred tax assets and liabilities (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Details | ||
Deferred Tax Assets, Operating Loss Carryforwards | $ 2,077,132 | $ 1,911,642 |
Deferred Tax Assets, Valuation Allowance, Current | $ (2,077,132) | $ (1,911,642) |
Note 10 - Income Taxes (Details
Note 10 - Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Details | ||
Operating Loss Carryforwards | $ 5,200,000 | $ 4,800,000 |
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ 165,491 | $ 1,484,554 |