Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Sep. 13, 2018 | Jun. 30, 2016 | |
Document And Entity Information | |||
Entity Registrant Name | CannaPharmaRX, Inc. | ||
Entity Central Index Key | 1,081,938 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 8,397,371 | ||
Entity Common Stock, Shares Outstanding | 17,960,741 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash and cash equivalents | $ 0 | $ 2,621 |
Prepaid expenses | 1,667 | 9,438 |
Total current assets | 1,667 | 12,059 |
Total Assets | 1,667 | 12,059 |
Current liabilities | ||
Accounts payable and accrued expenses | 599,575 | 456,601 |
Accrued legal settlement payable in cash - current portion | 190,000 | 190,000 |
Accrued legal settlement payable in stock | 0 | |
Accrued expense - related party | 150,000 | 50,000 |
Loan payable - related party | 19,758 | 0 |
Total current liabilities | 959,333 | 696,601 |
Total Liabilities | 959,333 | 696,601 |
Stockholders' Equity | ||
Preferred stock, $0.0001 par value, 10,000,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock, $0.0001 par value; 100,000,000 shares authorized, 17,960,741 issued and outstanding | 1,796 | 1,796 |
Additional paid in capital | 32,930,067 | 32,201,942 |
Retained deficit | (33,889,530) | (32,888,280) |
Total Stockholders' Deficit | (957,667) | (684,542) |
Total Liabilities and Stockholders' Deficit | $ 1,667 | $ 12,059 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred shares, par value | $ 0.0001 | $ 0.0001 |
Preferred shares, authorized | 10,000,000 | 10,000,000 |
Preferred shares, issued | 0 | 0 |
Preferred shares, outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 100,000,000 | 100,000,000 |
Common stock, issued | 17,960,741 | 17,960,741 |
Common stock, outstanding | 17,960,741 | 17,960,741 |
Statement of Operations
Statement of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | ||
Revenue | $ 0 | $ 0 |
Operating Expenses: | ||
General & administrative | 276,766 | 4,217,456 |
Stock based compensation | 728,125 | 7,435,004 |
Total Operating Expenses | 1,004,891 | 11,652,460 |
Income (loss) from operations | (1,004,891) | (11,652,460) |
Other income (expense) | ||
Interest (expense) | (423) | (2,724) |
Loss on disposal of assets | 0 | (87,748) |
Interest income | 0 | |
Other income (expense) | 4,064 | 0 |
Other income (expense) net | 3,641 | (90,472) |
Income (loss) before provision for income taxes | (1,001,250) | (11,742,932) |
Provision (credit) for income tax | 0 | 0 |
Net income (loss) | $ (1,001,250) | $ (11,742,932) |
Net income (loss) per share - (Basic and fully diluted) | $ (0.06) | $ (0.77) |
Weighted average of shares outstanding | 17,960,741 | 15,338,352 |
Statement of Stockholder's Equi
Statement of Stockholder's Equity - USD ($) | Common Stock | Additional Paid-In Capital | Retained Earnings / Accumulated Deficit | Total |
Beginning balance, shares at Dec. 31, 2014 | 17,374,407 | |||
Beginning balance, value at Dec. 31, 2014 | $ 1,737 | $ 20,855,381 | $ (21,145,348) | $ (288,230) |
Stock issued for acquisition, shares | 9,750,000 | |||
Stock issued for acquisition, value | $ 975 | (975) | ||
Shares issued to vendor in prior year, paid par this period | 120 | 120 | ||
Cancellation of shares owned by Canna Colorado, shares | (10,420,000) | |||
Cancellation of shares owned by Canna Colorado, value | $ (1,042) | 1,042 | ||
Debt settled in sale/merger/acquisition | 1,245 | |||
Bank refund of overdraft balance to close account | 4,556 | |||
Shares issued in litigation settlement, shares | 600,000 | |||
Shares issued in litigation settlement, value | $ 60 | 1,597,440 | 1,597,500 | |
Warrants issued for IR services | 1,153,643 | 1,153,643 | ||
Shares issued for brokerage services, shares | 100,000 | |||
Shares issued for brokerage services, value | $ 10 | 349,990 | 350,000 | |
Common stock sold, shares | 556,334 | |||
Common stock sold, value | $ 56 | 804,496 | 804,552 | |
Stock based compensation | 7,435,004 | 7,435,004 | ||
Net loss | (11,742,932) | (11,742,932) | ||
Ending balance, shares at Dec. 31, 2015 | 17,960,741 | |||
Ending balance, value at Dec. 31, 2015 | $ 1,796 | 32,201,942 | (32,888,280) | (684,542) |
Stock issued for acquisition, shares | 9,750,000 | |||
Stock issued for acquisition, value | $ 975 | (975) | ||
Shares issued to vendor in prior year, paid par this period | 120 | 120 | ||
Cancellation of shares owned by Canna Colorado, shares | (10,420,000) | |||
Cancellation of shares owned by Canna Colorado, value | $ (1,042) | 1,042 | ||
Debt settled in sale/merger/acquisition | 1,245 | 1,245 | ||
Bank refund of overdraft balance to close account | 4,556 | 4,556 | ||
Shares issued in litigation settlement, shares | 600,000 | |||
Shares issued in litigation settlement, value | $ 60 | 1,597,440 | 1,597,500 | |
Warrants issued for IR services | 1,153,643 | 1,153,643 | ||
Shares issued for brokerage services, shares | 100,000 | |||
Shares issued for brokerage services, value | $ 10 | 349,990 | 350,000 | |
Stock based compensation | 728,125 | 728,125 | ||
Net loss | (1,001,250) | (1,001,250) | ||
Ending balance, shares at Dec. 31, 2016 | 17,960,741 | |||
Ending balance, value at Dec. 31, 2016 | $ 1,796 | $ 32,930,067 | $ (33,889,530) | $ (957,667) |
Statement of Cash Flows
Statement of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash Flows From Operating Activities: | ||
Net income (loss) | $ (1,001,250) | $ (11,742,932) |
Adjustments to reconcile net income to net cash provided by (used for) operating activities | ||
Depreciation | 0 | 12,031 |
Stock-based compensation expense | 728,125 | 7,435,004 |
Warrants issued for services | 0 | 1,153,643 |
Stock issued for services | 0 | 350,000 |
Noncash write-off of related party loan | 0 | |
Settlement payment - non-current portion | 0 | (135,000) |
Legal settlement payable in stock | 0 | (1,597,500) |
Legal settlement by stock issuance | 0 | 1,597,500 |
Changes in operating Assets & Liabilities | ||
Decrease in other receivable | 0 | 531 |
(Increase)/decrease in prepaid expenses | 0 | 34,133 |
Increase/(Decrease) in accounts payable and accrued expenses | 7,771 | 319,735 |
Increase/(Decrease) in accrued payable - related party | 100,000 | 49,096 |
Increase/(Decrease) in current legal settlement payable | 142,974 | (25,000) |
Net cash provided by (used for) operating activities | (22,380) | (2,548,759) |
Cash Flows From Investing Activities: | ||
Purchase of fixed assets | 0 | (2,078) |
Disposal of assets net of depreciation | 0 | 87,748 |
Deposit paid toward Specialty Pharmacy acquisition | 0 | 50,000 |
Net cash provided by (used for) investing activities | 0 | 135,670 |
Cash Flows From Financing Activities: | ||
Proceeds from (paydown of) related party loans | 19,758 | 0 |
Debt released in acquisition of Canna Colorado | 0 | 1,245 |
Shares issued to vendor in prior year, paid par this period | 0 | 120 |
Cash from bank to close overdrawn account | 0 | 4,556 |
Proceeds from sales of common stock | 0 | 804,550 |
Net cash provided by financing activities | 19,758 | 810,471 |
Net Increase (Decrease) In Cash and Cash Equivalents | (2,621) | (1,602,618) |
Cash and Cash Equivalents At The Beginning Of The Period | 2,621 | 1,605,239 |
Cash and Cash Equivalents At The End Of The Period | 0 | 2,621 |
Schedule of Non-Cash Investing and Financing Activities | ||
Value of stock issued in litigation settlement | 0 | 1,597,500 |
Supplemental Disclosure | ||
Cash paid for interest | 423 | 2,071 |
Cash paid for income taxes | $ 0 | $ 500 |
1. Nature of Operations and Sig
1. Nature of Operations and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Nature of Operations and Significant Accounting Policies | NOTE 1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES NATURE OF OPERATIONS CannaPharmaRx, Inc. (the “Company”) is a Delaware corporation. As of the date of this Report the Company intends to engage in acquisitions or joint ventures with a company or companies that will allow to become a national or internationally branded cannabis cultivation company, or otherwise engage in the cannabis industry. Management is engaged in seeking out and evaluating businesses for acquisition. However, if an opportunity in another industry arises the Company will review that opportunity as well. The proposed business activities described herein classify us as a “shell company. Rule 12b-2 of the 34 Act defines a shell company as a company that has: (1) (2) (i) (ii) (iii) HISTORY The Company was originally incorporated in the State of Colorado in August 1998 under the name “Network Acquisitions, Inc.” It changed its name to Cavion Technologies, Inc. in February 1999 and subsequently to Concord Ventures, Inc. in October 2006. On December 21, 2000, the Company filed for protection under Chapter 11 of the United States Bankruptcy Code. In connection with the filing, on February 16, 2001, the Company sold its entire business, and all of its assets, for the benefit of its creditors. After the sale, the Company still had liabilities of $8.4 million and was subsequently dismissed by the Court from the Chapter 11 reorganization, effective March 13, 2001, at which time the last of the Company’s then remaining directors resigned. On March 13, 2001, the Company had no business or other source of income, no assets, no employees or directors, outstanding liabilities of approximately $8.4 million and had terminated its duty to file reports under securities law. In February 2008, after filing of a Form 10 registration statement pursuant to the Securities Exchange Act of 1934, as amended, we were re-listed on the OTC Bulletin Board. In April 2010, the Company re-domiciled in Delaware under the name CCVG, Inc. (“CCVG”).Effective December 31, 2010, the Company completed an Agreement and Plan of Merger and Reorganization (the “Reorganization") which provided for the merger of two of the Company’s wholly owned subsidiaries. As a result of this reorganization the Company’s name became “Golden Dragon Inc.,” which became the surviving publicly quoted parent holding company. On May 9, 2014, the Company entered into a Share Purchase Agreement (the “ Share Purchase Agreement Canna Colorado In October 2014, the Company changed its legal name to “CannaPharmaRx, Inc.” As a result of the aforesaid transactions, the Company became an early-stage pharmaceutical company whose purpose was to advance cannabinoid research and discovery using proprietary formulation and drug delivery technology then under development. In April 2016, the Company ceased operations. Its then management resigned their respective positions with the Company, with the exception of Mr. Gary Herick, who remains as an officer and director. As a result, the Company is now considered a “shell” company as defined under the Securities Exchange Act of 1934, as amended. BASIS OF PRESENTATION The accompanying financial statements have been prepared in accordance with the Financial Accounting Standards Board (“ FASB Codification GAAP The Company has been inactive since April 2016. USE OF ESTIMATES The preparation of our financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates. Due to uncertainties inherent in the estimation process, it is possible that these estimates could be materially revised within the next year. CASH AND CASH EQUIVALENTS Cash and cash equivalents consist of cash and highly liquid debt instruments with original maturities of less than three months. PROPERTY AND EQUIPMENT Historically when the company acquired fixed assets, depreciation expenses have been calculated using the straight-line method over the estimated useful lives of the respective assets, ranging from three to seven years. Depreciation expenses total $-0- and $12,031 for the years ended December 31, 2016 and December 31, 2015, respectively. DEFERRED COSTS AND OTHER OFFERING COSTS All costs with respect to raising capital in the two private placements of the Company’s common stock were expensed by the Company both in 2014 and 2015. These costs were applied as internal operational expenses. The Company had no deferred costs or other stock offering costs as of either December 31, 2016 or December 31, 2015. Future costs associated with raising capital, be it debt or equity, may more likely be incurred as a direct variable cost with third parties. Our intent is to initially defer these costs and ultimately offset them against the proceeds from these capital or financial transactions if successful, or expensed if the proposed financial transaction proves unsuccessful. IMPAIRMENT OF LONG-LIVED AND INTANGIBLE ASSETS In the event that facts and circumstances indicated that the cost of long-lived and intangible assets may be impaired, an evaluation of recoverability will be performed. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset will be compared to the asset’s carrying amount to determine if a write-down to market value or discounted cash flow value will be required. The Company had no intangible assets at December 31, 2016, or December 31, 2015. FAIR VALUES OF ASSETS AND LIABILITIES The Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. Level 1: Valuation is based on quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. Level 2: Valuation is based on observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. For example, Level 2 assets and liabilities may include debt securities with quoted prices that are traded less frequently than exchange-traded instruments. Level 3: Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category generally includes certain private equity investments and long-term derivative contracts. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. As of December 31, 2016 and December 31, 2015, the Company does not have any assets or liabilities which are considered Level 2 or 3 in the hierarchy. The Company may also be required, from time to time, to measure certain other financial assets at fair value on a nonrecurring basis. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets. There were no such adjustments in the periods ended December 31, 2016, or December 31, 2015. FINANCIAL INSTRUMENTS The estimated fair value for financial instruments was determined at discrete points in time based on relevant market information. These estimates involved uncertainties and could not be determined with exact precision. The fair value of the Company’s financial instruments, which include cash, prepaid expenses, accounts payable and the related party loan, each approximate their carrying value due either to their short length to maturity or interest rates that approximate prevailing market rates. INCOME TAXES The Company accounts for income taxes under the liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. COMPREHENSIVE INCOME (LOSS) Comprehensive income is defined as all changes in stockholders’ equity (deficit), exclusive of transactions with owners, such as capital investments. Comprehensive income includes net income or loss, changes in certain assets and liabilities that are reported directly in equity such as translation adjustments on investments in foreign subsidiaries and unrealized gains (losses) on available-for-sale securities. From our inception, there have been no differences between our comprehensive loss and net loss. INCOME (LOSS) PER SHARE Income (loss) per share is presented in accordance with Accounting Standards Update (“ ASU Earning per Share EPS Stock options outstanding at December 31, 2016 to purchase 750,000 shares of common stock are excluded from the calculations of diluted net loss per share since their effect is antidilutive. STOCK-BASED COMPENSATION The Company has adopted ASC Topic 718, (Compensation—Stock Compensation) BUSINESS SEGMENTS Our activities during the year ended December 31, 2016 comprised a single segment. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS On June 10, 2014, the FASB issued update ASU 2014-10, Development Stage Entities Management has reviewed all other recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on our financial condition or the results of our operations. |
2. Going Concern and Liquidity
2. Going Concern and Liquidity | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern and Liquidity | NOTE 2. GOING CONCERN AND LIQUIDITY The Company had $-0- cash on hand as of December 31, 2016, and no revenue-producing business or other sources of income. Additionally, as of December 31, 2016, the Company had outstanding liabilities totaling $959,333 and stockholders’ deficit of $957,667. The Company had a working capital deficit of $957,667 at December 31, 2016. In the Company’s financial statements for the fiscal years ended December 31, 2016 and 2015, the Reports of the Independent Registered Public Accounting Firm include an explanatory paragraph that describes substantial doubt about our ability to continue as a going concern. These financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. Based on our current financial projections, we believe we do not have sufficient existing cash resources to fund our current limited operations. It is the Company’s current intention to raise debt and/or equity financing to fund ongoing operating expenses. There is no assurance that these events will be satisfactorily completed or at terms acceptable to the Company. Any issuance of equity securities, if accomplished, could cause substantial dilution to existing stockholders. Any failure by the Company to successfully implement these plans would have a material adverse effect on its business, including the possible inability to continue operations. |
3. Assets
3. Assets | 12 Months Ended |
Dec. 31, 2016 | |
Assets | |
Assets | NOTE 3. ASSETS As of December 31, 2016, the Company had $1,667 in total assets comprised of prepaid expenses. |
4. Accounts Payable and Accrued
4. Accounts Payable and Accrued Expenses | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | NOTE 4. ACCOUNTS PAYABLE AND ACCRUED EXPENSES As of December 31, 2016, the balance of accounts payable and accrued expenses was $769,333, which is primarily comprised of trade payables and accrued salaries and wages and legal fees. Additionally, accrued legal settlements payable in cash over the next 12 months total $190,000 as of December 31, 2016, as discussed in Note 6 (Litigation and Accrued Settlement Liabilities). |
5. Commitments
5. Commitments | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | NOTE 5. COMMITMENTS OPERATING LEASE The Company had a non-cancellable operating lease for its headquarters located in Carneys Point, New Jersey. The term of this lease ended April 30, 2016. As of December 31, 2016 the Company owed $18,540 on this lease and had not made any new commitments for office space. |
6. Litigation and Accrued Settl
6. Litigation and Accrued Settlement Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation and Accrued Settlement Liabilities | NOTE 6. LITIGATION AND ACCRUED SETTLEMENT LIABILITIES On October 30, 2014, Gary M. Cohen (“ Cohen On November 11, 2014, the Company, under its former name Golden Dragon Holding Co., sued Cohen in U.S. District Court in New Jersey for libel and tortious interference. On March 30, 2015, the Company executed a Confidential Settlement and Release of Claims Agreement dated March 30, 2015, by and between the Company, Canna Colorado, Cohen and the other individuals named above (the “ Settlement Agreement As part of the Settlement Agreement, the Company agreed to purchase all of Mr. Cohen’s 2,250,000 shares of Canna Colorado for a purchase price of $350,000, with $85,000 payable up front and the remainder payable in equal installments of $15,000 per month over the next 17 months, and a payment of $10,000 in the eighteenth month. In addition, on May 4, 2015, the Company issued 600,000 unregistered restricted shares of its common stock to Mr. Cohen as part of the Settlement Agreement. The Company valued those shares at $1,597,500 based on the trading average of the Company’s stock over the ten days preceding entry into the Settlement Agreement and recorded an expense in such amount during the period ended December 31, 2014. Pursuant to the Settlement Agreement, $160,000 has been paid to Mr. Cohen in cash through September 30, 2015 in accordance with the settlement payment terms, leaving a remaining liability of $190,000 as of December 31, 2015 to be paid in cash in the future, since no payments were made subsequent to September 30, 2015. In addition, the Company and Cohen have resolved their differences in the Company’s lawsuit filed against Cohen on November 11, 2014 in New Jersey. The Company has dismissed its claims against Cohen of libel and tortious interference. |
7. Stockholders' Equity
7. Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 7. STOCKHOLDERS’ EQUITY PREFERRED STOCK The Company is authorized to issue up to 10,000,000 shares of one or more series of preferred stock, at a par value of $0.0001, all of which is nonvoting. The Board of Directors may, without stockholder approval, determine the dividend rates, redemption prices, preferences on liquidation or dissolution, conversion rights, voting rights and any other preferences. No shares of preferred stock were issued or outstanding as of December 31, 2016. COMMON STOCK The Company is authorized to issue 100,000,000 shares of common stock, par value $0.0001 per share. As of December 31, 2016, 17,960,741 shares of common stock were issued and outstanding. RECENT ISSUANCES OF COMMON STOCK In March 2015, the Company began offering in a private placement of shares of its restricted common stock to accredited investors at $1.50 per share (the “ Private Placement On June 25, 2015, the Company issued 100,000 shares of the Company’s common stock to Benjamin & Jerold Brokerage I, LLC, an Illinois limited liability company (“ B&J WARRANTS On January 20, 2015, the Company issued a 3-year warrant (the “ First Warrant VCR On February 23, 2015, the Company issued another 3-year warrant (the “Second Warrant,” and together with the First Warrant, the “VCR Warrants”) to VCR as compensation for VCR’s services in managing and implementing investor relations strategies with the U.S. investment community and industry. The Second Warrant is exercisable for 244,283 of the Company’s fully-diluted common shares at an exercise price equal to the price per share of the Company’s common stock on the 10 days preceding February 23, 2015 or $2.50. The Second Warrant has a 3-year life, a cashless exercise provision and is fully transferable with the Company’s approval, which may not be unreasonably withheld. The Second Warrant is callable on 60 days’ notice if (i) the Company’s common stock trades on the NASDAQ and (ii) the Company’s common stock trades at three times the exercise price of the Second Warrant for 20 consecutive trading days. These warrants were valued at $523,576 using the Black-Scholes method of valuation. The Company has not issued any warrants since February 23 rd STOCK OPTIONS As a result of all stock option activity to date, the Company has recorded aggregate stock-based compensation charges of $728,125 for the year ended December 31, 2016 and $7,435,004 during the year ended December 31, 2015. As of December 31, 2016, 750,000 vested options were outstanding, all of which belonged to Mr. Herick and all had been fully expensed. |
8. Income Taxes
8. Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 8. INCOME TAXES As of December 31, 2016, the Company has approximately $6,322,000 of federal net operating loss carryforwards, respectively. The federal net operating loss carryforwards begin to expire in 2030. State net operating loss carryforwards begin to expire in 2034. Due to the change in ownership provisions of the Internal Revenue Code, the availability of the Company’s net operating loss carry forwards could be subject to annual limitations against taxable income in future periods, which could substantially limit the eventual utilization of such carry forwards. The Company has not analyzed the historical or potential impact of its equity financings on beneficial ownership and therefore no determination has been made whether the net operating loss carry forward is subject to any Internal Revenue Code Section 382 limitation. To the extent there is a limitation, there could be a substantial reduction in the deferred tax asset with an offsetting reduction in the valuation allowance. As of September 30, 2016, the Company has no unrecognized income tax benefits. The tax years from 2014 and forward remain open to examination by federal and state authorities due to net operating loss and credit carryforwards. The Company is currently not under examination by the Internal Revenue Service or any other taxing authorities. |
9. Subsequent Events
9. Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 9. SUBSEQUENT EVENTS In April 2018, the Company issued 60,000 shares of its Series A Convertible Preferred Stock at $1.00 per share to its current management, all of whom are accredited investors. Each share of Series A Convertible Preferred Stock is convertible into 1,250 shares of common stock and vote on an as converted basis. The rights and designations of these Preferred Shares include the following: · entitles the holder thereof to 1,250 votes on all matters submitted to a vote of the shareholders; · The holders of outstanding Series A Convertible Preferred Stock shall only be entitled to receive dividends upon declaration by the Board of Directors of a dividend payable on our Common Stock whereupon the holders of the Series A Convertible Preferred Stock shall receive a dividend on the number of shares of Common Stock in to which each share of Series A Convertible Preferred Stock is convertible; · Each Series A Preferred Share is convertible into 1,250 shares of Common Stock; · not redeemable. In July 2018, the Company commenced an offering of up to $2MM of convertible notes. The notes carry an interest rate of 12% and are convertible into shares of the Company’s common stock at the lesser of $0.40 or 50% discount to the market price on the date of conversion. The term of the notes is for one year and they must be converted upon closing a financing, acquisition or other form of business combination in an amount greater than $5 million. As of the date of this report the Company has accepted aggregate subscriptions of $640,000 in this Offering, none of which has been converted. The offering remains open as of the date of this Report. On April 1, 2018, the Company changed its principal place of business to 2 Park Plaza, Suite 1200 – B. Irvine, CA 92614. This space is provided on a twelve month term by a company to which Mr. Nicosia, one of the Company’s directors, serves as Chief Executive Officer. Monthly rent is $1,000, however, as of the date of this filing the Company has not made any rent payments and continue to accrue those amounts as accounts payable. |
1. Nature of Operations and S16
1. Nature of Operations and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying financial statements have been prepared in accordance with the Financial Accounting Standards Board (“ FASB Codification GAAP The Company has been inactive since April 2016. |
USE OF ESTIMATES | USE OF ESTIMATES The preparation of our financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates. Due to uncertainties inherent in the estimation process, it is possible that these estimates could be materially revised within the next year. |
CASH AND CASH EQUIVALENTS | CASH AND CASH EQUIVALENTS Cash and cash equivalents consist of cash and highly liquid debt instruments with original maturities of less than three months. |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Historically when the company acquired fixed assets, depreciation expenses have been calculated using the straight-line method over the estimated useful lives of the respective assets, ranging from three to seven years. Depreciation expenses total $-0- and $12,031 for the years ended December 31, 2016 and December 31, 2015, respectively. |
DEFERRED COSTS AND OTHER OFFERING COSTS | DEFERRED COSTS AND OTHER OFFERING COSTS All costs with respect to raising capital in the two private placements of the Company’s common stock were expensed by the Company both in 2014 and 2015. These costs were applied as internal operational expenses. The Company had no deferred costs or other stock offering costs as of either December 31, 2016 or December 31, 2015. Future costs associated with raising capital, be it debt or equity, may more likely be incurred as a direct variable cost with third parties. Our intent is to initially defer these costs and ultimately offset them against the proceeds from these capital or financial transactions if successful, or expensed if the proposed financial transaction proves unsuccessful. |
IMPAIRMENT OF LONG-LIVED AND INTANGIBLE ASSETS | IMPAIRMENT OF LONG-LIVED AND INTANGIBLE ASSETS In the event that facts and circumstances indicated that the cost of long-lived and intangible assets may be impaired, an evaluation of recoverability will be performed. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset will be compared to the asset’s carrying amount to determine if a write-down to market value or discounted cash flow value will be required. The Company had no intangible assets at December 31, 2016, or December 31, 2015. |
FAIR VALUES OF ASSETS AND LIABILITIES | FAIR VALUES OF ASSETS AND LIABILITIES The Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. Level 1: Valuation is based on quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. Level 2: Valuation is based on observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. For example, Level 2 assets and liabilities may include debt securities with quoted prices that are traded less frequently than exchange-traded instruments. Level 3: Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category generally includes certain private equity investments and long-term derivative contracts. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. As of December 31, 2016 and December 31, 2015, the Company does not have any assets or liabilities which are considered Level 2 or 3 in the hierarchy. The Company may also be required, from time to time, to measure certain other financial assets at fair value on a nonrecurring basis. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets. There were no such adjustments in the periods ended December 31, 2016, or December 31, 2015. |
FINANCIAL INSTRUMENTS | FINANCIAL INSTRUMENTS The estimated fair value for financial instruments was determined at discrete points in time based on relevant market information. These estimates involved uncertainties and could not be determined with exact precision. The fair value of the Company’s financial instruments, which include cash, prepaid expenses, accounts payable and the related party loan, each approximate their carrying value due either to their short length to maturity or interest rates that approximate prevailing market rates. |
INCOME TAXES | INCOME TAXES The Company accounts for income taxes under the liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. |
COMPREHENSIVE INCOME (LOSS) | COMPREHENSIVE INCOME (LOSS) Comprehensive income is defined as all changes in stockholders’ equity (deficit), exclusive of transactions with owners, such as capital investments. Comprehensive income includes net income or loss, changes in certain assets and liabilities that are reported directly in equity such as translation adjustments on investments in foreign subsidiaries and unrealized gains (losses) on available-for-sale securities. From our inception, there have been no differences between our comprehensive loss and net loss. |
INCOME (LOSS) PER SHARE | INCOME (LOSS) PER SHARE Income (loss) per share is presented in accordance with Accounting Standards Update (“ ASU Earning per Share EPS Stock options outstanding at December 31, 2016 to purchase 750,000 shares of common stock are excluded from the calculations of diluted net loss per share since their effect is antidilutive. |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The Company has adopted ASC Topic 718, (Compensation—Stock Compensation) |
BUSINESS SEGMENTS | BUSINESS SEGMENTS Our activities during the year ended December 31, 2016 comprised a single segment. |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS On June 10, 2014, the FASB issued update ASU 2014-10, Development Stage Entities Management has reviewed all other recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on our financial condition or the results of our operations. |
1. Nature of Operations and S17
1. Nature of Operations and Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Depreciation expense | $ 0 | $ 12,031 |
Intangible assets | 0 | 0 |
Asset impairment charges | $ 0 | $ 0 |
Options [Member] | ||
Antidilutive shares | 750,000 |
2. Going Concern and Liquidity
2. Going Concern and Liquidity (Details Narrative) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Cash | $ 0 | $ 2,621 | $ 1,605,239 |
Liabilities | 959,333 | 696,601 | |
Stockholders' Deficit | (957,667) | $ (684,542) | $ (288,230) |
Working Capital | $ (957,667) |
3. Assets (Details Narrative)
3. Assets (Details Narrative) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Assets | |||
Cash and cash equivalents | $ 0 | $ 2,621 | $ 1,605,239 |
Prepaid expenses | 1,667 | 9,438 | |
Total current assets | $ 1,667 | $ 12,059 |
4. Accounts Payable and Accru20
4. Accounts Payable and Accrued Expenses (Details Narrative) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Total accounts payable and accrued expenses | $ 769,333 | |
Accrued legal settlements | $ 190,000 | $ 190,000 |
5. Commitments (Details Narrati
5. Commitments (Details Narrative) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Lease commitment | $ 18,540 |
Lease expiration date | Apr. 30, 2016 |
7. Stockholders' Equity (Detail
7. Stockholders' Equity (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Proceeds from sale of stock | $ 0 | $ 804,550 |
Shares issued for brokerage services, value | 350,000 | 350,000 |
Stock based compensation | $ 728,125 | $ 7,435,004 |
Warrants [Member] | First Warrant [Member] | ||
Warrants issued | 244,283 | |
Warrant exercise price | $ 2.90 | |
Warrant weighted average life | 3 years | |
Warrant fair value | $ 630,067 | |
Warrants [Member] | Second Warrant [Member] | ||
Warrants issued | 244,283 | |
Warrant exercise price | $ 2.50 | |
Warrant weighted average life | 3 years | |
Warrant fair value | $ 523,576 | |
Options [Member] | ||
Options outstanding | 750,000 | 0 |
Stock based compensation not yet recognized | $ 728,125 | $ 7,435,004 |
Financial Services Firm [Member] | ||
Shares issued for brokerage services, shares | 100,000 | |
Shares issued for brokerage services, value | $ 350,000 | |
Private Placement [Member] | ||
Stock issued new, shares | 556,334 | |
Proceeds from sale of stock | $ 804,550 |
8. Income Taxes (Details Narrat
8. Income Taxes (Details Narrative) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Net operating loss carryforwards | $ 6,322,000 |
Operating loss carryforward begining expiration date | Dec. 31, 2030 |
New Jersey [Member] | |
Operating loss carryforward begining expiration date | Dec. 31, 2034 |