Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 18, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | PETRONE WORLDWIDE, INC. | |
Entity Central Index Key | 1,096,132 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 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? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 23,609,897 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,016 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
CURRENT ASSETS: | ||
Cash | $ 13,195 | $ 208,064 |
Accounts receivable | 66,826 | |
Prepaid expenses and other current assets | 30,598 | 131,046 |
Advances to supplier | 137,365 | 11,262 |
Total Current Assets | 247,984 | 350,372 |
TOTAL ASSETS | 247,984 | 350,372 |
CURRENT LIABILITIES: | ||
Convertible notes payable, net | 87,834 | 129,187 |
Loans payable | 53,544 | |
Accounts payable | 74,959 | 45,174 |
Accrued expenses | 7,243 | 405 |
Advances from customers | 9,539 | |
Due to related party | 34,054 | 38,434 |
Derivative liability | 2,093 | 73,236 |
Total Current Liabilities | 269,266 | 286,436 |
Total Liabilities | 269,266 | 286,436 |
STOCKHOLDERS' EQUITY (DEFICIT): | ||
Preferred stock, $.001 par value, 10,000,000 shares authorized; Series A preferred stock: $.001 par value; 1,000,000 shares authorized; 1,000,000 and 0 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively | 1,000 | |
Common stock: $.001 par value, 100,000,000 shares authorized; 22,959,897 and 21,483,230 issued and outstanding at September 30, 2016 and December 31, 2015, respectively | 22,960 | 21,483 |
Additional paid-in capital | 3,333,810 | 2,722,559 |
Accumulated deficit | (3,379,052) | (2,680,106) |
Total Stockholders' Equity (Deficit) | (21,282) | 63,936 |
Total Liabilities and Stockholders' Equity (Deficit) | 247,984 | 350,372 |
Series A Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY (DEFICIT): | ||
Preferred stock, $.001 par value, 10,000,000 shares authorized; Series A preferred stock: $.001 par value; 1,000,000 shares authorized; 1,000,000 and 0 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively | 1,000 | |
Total Stockholders' Equity (Deficit) | 1,000 | |
Total Liabilities and Stockholders' Equity (Deficit) | $ 1,000 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 |
Preferred stock, par value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 1,000,000 | 0 |
Preferred stock, shares outstanding | 1,000,000 | 0 |
Common stock, par value per share | $ .001 | $ .001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 22,959,897 | 21,483,230 |
Common stock, shares outstanding | 22,959,897 | 21,483,230 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 1,000,000 | 0 |
Preferred stock, shares outstanding | 1,000,000 | 0 |
Consolidated Statements Of Oper
Consolidated Statements Of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
REVENUES: | ||||
Product segment | $ 35,422 | $ 206,851 | ||
Logistic services segment | 50,708 | 50,708 | ||
Total Revenues | 86,130 | $ 24,457 | 257,559 | $ 1,373,547 |
COST OF REVENUES: | ||||
Product segment | 28,217 | 162,113 | ||
Logistic services segment | 33,830 | 33,830 | ||
Total Cost of Revenues | 62,047 | 195,943 | ||
GROSS PROFIT | 24,083 | 1,523 | 61,616 | 107,709 |
OPERATING EXPENSES: | ||||
Compensation and related benefits | 15,000 | 48,000 | ||
Consulting fees | 23,298 | 167,638 | ||
Professional fees | 47,821 | 146,625 | ||
Rent expense | 7,753 | 42,969 | ||
General and administrative expenses | 31,850 | 176,466 | ||
Total Operating Expenses | 125,722 | 581,698 | ||
LOSS FROM OPERATIONS | (101,639) | (114,870) | (520,082) | (204,048) |
OTHER EXPENSES: | ||||
Interest expenses | 90,646 | 236,279 | ||
Gain on derivative liability | 1,915 | 57,415 | ||
Total Other Expense | (88,731) | (178,864) | ||
NET LOSS | $ (190,370) | $ (698,946) | ||
NET LOSS PER COMMON SHARE: | ||||
Basic and diluted | $ (0.01) | $ (0.03) | ||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||
Basic and diluted | 22,830,441 | 22,601,478 | ||
As Restated [Member] | ||||
REVENUES: | ||||
Product segment | 24,457 | 1,373,547 | ||
Logistic services segment | ||||
Total Revenues | 24,457 | 1,373,547 | ||
COST OF REVENUES: | ||||
Product segment | 22,934 | 1,265,838 | ||
Logistic services segment | ||||
Total Cost of Revenues | 22,934 | 1,265,838 | ||
GROSS PROFIT | 1,523 | 107,709 | ||
OPERATING EXPENSES: | ||||
Compensation and related benefits | 12,600 | |||
Consulting fees | 66,393 | 102,641 | ||
Professional fees | 10,973 | 40,682 | ||
Rent expense | 14,295 | 62,918 | ||
General and administrative expenses | 24,732 | 92,916 | ||
Total Operating Expenses | 116,393 | 311,757 | ||
LOSS FROM OPERATIONS | (114,870) | (204,048) | ||
OTHER EXPENSES: | ||||
Interest expenses | 58 | 105 | ||
Gain on derivative liability | ||||
Total Other Expense | (58) | (105) | ||
NET LOSS | $ (114,928) | $ (204,153) | ||
NET LOSS PER COMMON SHARE: | ||||
Basic and diluted | $ (0.01) | $ (0.01) | ||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||
Basic and diluted | 16,014,085 | 15,646,684 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (698,946) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of debt discount to interest expense | 120,813 | |
Stock-based compensation | 140,448 | |
Gain on derivative liability | 57,415 | |
Stock-based interest expense for debt modification | 80,000 | |
Change in operating assets and liabilities: | ||
Accounts receivable | 66,826 | |
Prepaid expenses and other current assets | ||
Advances to supplier | 126,103 | |
Accounts payable | 29,785 | |
Accrued expenses | 6,838 | |
Advances from customers | 9,539 | |
NET CASH USED IN OPERATING ACTIVITIES | (561,867) | |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from related party advances | 38,000 | |
Repayment of related party advances | 42,380 | |
Repayment of convertible debt | 162,166 | |
Proceeds from loans payable | 55,000 | |
Repayment of loans payable | 1,456 | |
Proceeds from sale of common stock | 480,000 | |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 366,998 | |
NET DECREASE IN CASH | (194,869) | |
CASH, beginning of period | 208,064 | |
CASH, end of period | 13,195 | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid for: Interest | 35,466 | |
Cash paid for: Income taxes | ||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Reclassification of derivative liability to equity | 13,728 | |
Common stock issued for future services and reflected in prepaid expenses | 24,000 | |
Exchange of related party advances for accounts payable | ||
As Restated [Member] | ||
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (204,153) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of debt discount to interest expense | ||
Stock-based compensation | 105,179 | |
Gain on derivative liability | ||
Stock-based interest expense for debt modification | ||
Change in operating assets and liabilities: | ||
Accounts receivable | 812 | |
Prepaid expenses and other current assets | (5,724) | |
Advances to supplier | (12,782) | |
Accounts payable | (685) | |
Accrued expenses | (6,288) | |
Advances from customers | 9,654 | |
NET CASH USED IN OPERATING ACTIVITIES | (78,599) | |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from related party advances | ||
Repayment of related party advances | 983 | |
Repayment of convertible debt | ||
Proceeds from loans payable | ||
Repayment of loans payable | ||
Proceeds from sale of common stock | 5,000 | |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 4,017 | |
NET DECREASE IN CASH | (74,582) | |
CASH, beginning of period | 77,827 | |
CASH, end of period | 3,245 | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid for: Interest | 105 | |
Cash paid for: Income taxes | ||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Reclassification of derivative liability to equity | ||
Common stock issued for future services and reflected in prepaid expenses | 164,250 | |
Exchange of related party advances for accounts payable | $ 800 |
Organization And Basis Of Prese
Organization And Basis Of Presentation | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Organization and Basis of Presentation | NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION Organization Petrone Worldwide, Inc. (the “Company”) was incorporated as Sheridan Industries, Inc. on December 14, 1998 in the State of Nevada. On December 31, 1998, the Company changed its name to Diabetex International Corp. and effective February 18, 2014, the Company changed its name to Petrone Worldwide, Inc. On January 29, 2014 and effective March 3, 2014, the Company entered into a purchase agreement (the “Purchase Agreement”) with Petrone Food Works, Inc. (“PFW”) and the shareholder of PFW. Pursuant to the Purchase Agreement, the Company acquired 100% of PFW’s issued and outstanding common stock from the PFW shareholder in exchange for the issuance of 11,760,542 shares of the Company’s common stock, representing 98.4% of the outstanding common stock, (the “Exchange”), after giving effect to a 1-for-500 reverse stock split (the “Reverse Stock Split”) which resulted in 195,607 common shares outstanding prior to the Exchange for liabilities of $30,000. Accordingly, the PFW shareholder became a shareholder of the Company and PFW became a subsidiary of the Company. The Exchange has been accounted for as a reverse-merger and recapitalization since the stockholder of PFW obtained voting and management control of the Company. PFW is the acquirer for financial reporting purposes and the Company is the acquired company. Consequently, the assets and liabilities and the operations reflected in the historical financial statements prior to the Exchange are those of PFW and was recorded at the historical cost basis of PFW, and the consolidated financial statements after completion of the Exchange included the assets and liabilities of both the Company and PFW and the Company’s consolidated operations from the closing date of the Exchange. All share and per share data in the accompanying consolidated financial statements have been retroactively restated to reflect the effect of the Reverse Stock Split and recapitalization. PFW was formed under the laws of the State of Nevada in October 2013. The Company is in the hospitality industry and is a supplier of tabletop kitchenware and hotel room products thru an exclusive licensing agreement with a leading supplier. Additionally, in August 2016, the Company began providing logistic services to one customer. Basis of Presentation and Principles of Consolidation The Company’s unaudited consolidated financial statements include the financial statements of its wholly-owned subsidiary, Petrone Food Works, Inc. (inactive). All significant intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements for the three and nine months ended September 30, 2016 and 2015 have been prepared by us without audit pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, all adjustments necessary to present fairly our financial position, results of operations, and cash flows as of September 30, 2016 and 2015, and for the periods then ended, have been made. Those adjustments consist of normal and recurring adjustments. Certain information and note disclosures normally included in our annual financial statements prepared in accordance with generally accepted accounting principles have been or omitted. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2015 and footnotes thereto included in the Company’s Annual Report on Form 10-K filed with the SEC on September 9, 2016. The results of operations for the nine months ended September 30, 2016 are not necessarily indicative of the results to be expected for the full year. Going concern These unaudited consolidated 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. As reflected in the accompanying unaudited consolidated financial statements, for the nine months ended September 30, 2016, the Company had a net loss of $698,946 and net cash used in operations of $561,867. Additionally, the Company had an accumulated deficit, stockholders’ deficit and a working capital deficit of $3,379,052, $21,282 and $21,282, respectively, at September 30, 2016. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive, or raise additional debt and/or equity capital. The Company is seeking to raise capital through additional debt and/or equity financings to fund its operations in the future. Although the Company has historically raised capital from sales of equity and from the issuance of promissory notes, there is no assurance that it will be able to continue to do so. If the Company is unable to raise additional capital or secure additional lending in the near future, management expects that the Company will need to curtail its operations. These consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Summary Of Significant Accounti
Summary Of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States 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 revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates for the nine months ended September 30, 2016 and 2015 include estimates of current and deferred income taxes and deferred tax valuation allowances, the fair value of derivative liabilities, and the fair value of non-cash equity transactions. Fair value of financial instruments and fair value measurements FASB ASC 820 — Fair Value Measurements and Disclosures, Level 1- Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. Level 2- Inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. Level 3- Inputs are unobservable inputs that reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, loans, accounts payable, accrued expenses, and other payables approximate their fair market value based on the short-term maturity of these instruments. The Company analyzes all financial and non-financial instruments with features of both liabilities and equity under the FASB’s accounting standard for such instruments. Under this standard, financial and non-financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company accounts for one instrument at fair value using level 3 valuation. At September 30, 2016 At December 31, 2015 Description Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Derivative liability — — $ 2,093 — — $ 73,236 A roll forward of the level 3 valuation financial instruments is as follows: Derivative Liability Balance at December 31, 2015 $ 73,236 Reclassification of derivative liability to equity (13,728 ) Change in fair value included in net loss (57,415 ) Balance at September 30, 2016 $ 2,093 ASC 825-10 “Financial Instruments”, allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments. Cash and cash equivalents For purposes of the consolidated statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market accounts to be cash equivalents. Accounts receivable The Company recognizes an allowance for losses on accounts receivable in an amount equal to the estimated probable losses net of recoveries. The allowance is based on an analysis of historical bad debt experience, current receivables aging, and expected future write-offs, as well as an assessment of specific identifiable customer accounts considered at risk or uncollectible. The expense associated with the allowance for doubtful accounts is recognized as general and administrative expense. Advances to Supplier Advances to supplier represent the advance payments for the purchase of product from supplier. Impairment of long-lived assets In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. Derivative liabilities The Company has certain financial instruments that are embedded derivatives associated with capital raises. The Company evaluates all its financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with FASB ASC 810-10-05-4 and 815-40. This accounting treatment requires that the carrying amount of any embedded derivatives be recorded at fair value at issuance and marked-to-market at each balance sheet date. In the event that the fair value is recorded as a liability, as is the case with the Company, the change in the fair value during the period is recorded as either income or expense. Upon conversion or exercise, the derivative liability is marked to fair value at the conversion date and then the related fair value is reclassified to equity. Revenue recognition Pursuant to the guidance of ASC Topic 605, the Company recognizes sales when persuasive evidence of an arrangement exists, delivery has occurred or services have been provided, the purchase price is fixed or determinable and collectability is reasonably assured. For product sale, the Company’s standard terms are “ex works”, with title transferring to its customer at the Company suppliers’ loading docks or upon embarkation with risk of loss being assumed by the customer at the shipping point. The Company has a small percentage of sales with other terms, and revenue is recognized in accordance with the terms of the related customer purchase order. Shipping and handling costs billed to customers are recognized in revenue. For logistics services performed, the Company recognizes revenue upon performance and completion of services rendered. Cost of sales Cost of sales includes inventory costs, materials and supplies costs, and shipping and handling costs incurred. Shipping and handling costs For the nine months ended September 30, 2016 and 2015, shipping and handling costs incurred for product shipped to customers are included in cost of sales and amounted to $33,569 and $127,785, respectively. Shipping and handling costs charged to customers are included in sales. Advertising costs All costs related to advertising of the Company’s products are expensed in the period incurred. Income taxes The Company accounts for income tax using the liability method prescribed by ASC 740, “ Income Taxes The Company follows the accounting guidance for uncertainty in income taxes using the provisions of Accounting Standards Codification (ASC) 740 “Income Taxes Stock-based compensation Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the service period of the award. Common stock awards issued to consultants represent common stock granted to non-employees in exchange for services at fair value. The measurement dates for such awards are set at the dates that the contracts are entered into as the awards are non-forfeitable and vest immediately. The measurement date fair value is then recognized over the service period as if the Company has paid cash for such service. Loss per share of common stock ASC 260 “Earnings Per Share”, requires dual presentation of basic and diluted earnings per share (“EPS”) with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Basic net loss per common share is computed by dividing net loss available to common shareholders by the weighted average number of shares of common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. Additionally, potentially dilutive common shares consist of common stock issuable upon conversion of convertible debt. These common stock equivalents may be dilutive in the future . September 30, September 30, Convertible notes 207,097 230,769 The Company uses “the management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Company’s chief operating decision maker is the Chairman and chief executive officer (“CEO”) of the Company, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. The Company classified the reportable operating segments into (i) the sale and distribution of products to the hospitality industry segment, and (ii) logistics services segment. Recent accounting pronouncements In May 2014, the FASB issued an update ("ASU 2014-09") Revenue from Contracts with Customers. In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern, In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes Income Taxes In February 2016, the FASB issued its new lease accounting guidance in ASU No. 2016-02, Leases (Topic 842). Under the new guidance, lessees will be required to recognize for all leases (with the exception of short-term leases) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The new standard is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of this ASU to the Company’s consolidated financial statements and related disclosures. In March 2016, the FASB issued its new stock compensation guidance in ASU No. 2016-09 (Topic 718). First, under the new guidance, companies will be required to recognize the income tax effects of share-based awards in the income statement when the awards vest or are settled (i.e., additional paid-in capital (“APIC”) or APIC pools will be eliminated). In addition, the new guidance allows a withholding amount of awarded shares with a fair value up to the amount of tax owed using the maximum, instead of the minimum, statutory tax rate without triggering liability classification for the award. Lastly, the new guidance allows companies to elect whether to account for forfeitures of share-based payments by (1) recognizing forfeitures of awards as they occur or (2) estimating the number of awards expected to be forfeited and adjusting the estimate when it is likely to change, as is currently required. The new standard is effective for annual periods beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. The result of adopting this guidance is not expected to have a material impact on the Company’s consolidated financial statements. There are no other recently issued accounting standards that apply to us or that are expected to have a material impact on our results of operations, financial condition, or cash flows |
Convertible Notes
Convertible Notes | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Convertible Notes | NOTE 3 – CONVERTIBLE NOTES In 2013 and on July 1, 2014, the Company entered into two convertible promissory note agreements with individuals in the amount of $20,000 and $10,000, respectively. The notes were non-interest bearing, unsecured and were due on demand. The notes are convertible into shares of stock of the Company at the market price on the date of conversion. Pursuant to ASC Topic 470-20 (Debt with conversion and other options), since these convertible notes had fixed conversion price at market, the Company determined it had a fixed monetary amounts that can be settled for the debt. Accordingly, no derivative liability was calculated. On December 22, 2015, the Company entered into a debt purchase and assignment agreement with one of the debt holders whereby a convertible note in the principal amount of $10,000 became convertible at $.0025 per common share and the note was converted into 4,000,000 shares of the Company’s common stock. At September 30, 2016, one note remains due in the principal amount of $20,000. On December 28, 2015, the Company entered into a secured convertible promissory note (the “Convertible Note”) with Firstfire Global Opportunities Fund LLC (the “Lender”), with a principal amount of $230,000, which amount is the $200,000 purchase price plus a 15% original issue discount equal to $30,000. Additionally, the lender deducted legal fees of $10,000 and the Company received net proceeds of $190,000. The unpaid principal and interest is secured by the Company’s common stock, bears interest computed at a rate of interest that is equal to 7.0% per annum, and is payable in monthly installments of $50,555 commencing April 28, 2016 through August 28, 2016. Any amount of principal or interest on this Convertible Note, which is not paid by the due dates, shall bear interest at the rate of 15% per annum from the due date until paid. During the nine months ended September 30, 2016, the Company repaid Convertible Note principal of $162,166. The Lender is entitled, at their option, at any time after the eighth month anniversary of this Convertible Note, to convert all or any lesser portion of the outstanding principal amount and accrued but unpaid interest into the Company’s common stock. The conversion price shall equal $0.50 per share (the "Fixed Conversion Price") provided, however that from and after the occurrence of any event of default, as defined, the conversion price shall be the lower of: (i) the Fixed Conversion Price or (ii) 50% multiplied by the lowest sales price of the common stock in a public market during the ten consecutive Trading Day period immediately preceding the Trading Day that the Company receives a notice of conversion. In connection with the issuance of this Convertible Note, the Company determined that the terms of the Convertible Note include a down-round provision under which the conversion price and exercise price could be affected by future equity offerings undertaken by the Company or contain terms that are not fixed monetary amounts at inception. Accordingly, under the provisions of FASB ASC Topic No. 815-40, “Derivatives and Hedging – Contracts in an Entity’s Own Stock”, the embedded conversion option contained in the convertible instruments were accounted for as derivative liabilities at the date of issuance and shall be adjusted to fair value through earnings at each reporting date. The fair value of the embedded conversion option derivatives was determined using the Black- Scholes Option Pricing Model. On the initial measurement date, the fair values of the embedded conversion option derivative of $73,236 was recorded as a derivative liability and was allocated as a debt discount to the Convertible Note of $73,236. At December 28, 2015, the Company valued the embedded conversion option derivative liabilities resulting in no gain or loss from change in fair value of derivative liabilities. Additionally, in connection with this Convertible Note, in December 2015, the Company paid Lender debt issuance costs of $10,000 and issued 50,000 shares of its common stock. These common shares were valued at $0.225 per share based on recent sales of the Company’s stock and in December 2015, the Company recorded a debt discount of $10,725, which is the relative fair value of such shares. During the nine months ended September 30, 2016, the Company entered into agreements for the addendum of the Convertible Note which waived all rights to enforce any event of default, which may have been triggered by the Company’s failure to file it reports with the SEC. In connection with these agreements, the Company issued an aggregate of 200,000 shares of common stock that were valued on the date of grant at $0.40 per share or $80,000 based on recent sales of the Company’s common stock and paid cash penalties of $10,000. The value of these shares and the cash penalties paid have been included in interest expense on the accompanying consolidated statement of operations. For the nine months ended September 30, 2016 and 2015, amortization of debt discounts related to this convertible note amounted to $120,813 and $0, which has been included in interest expenses on the accompanying unaudited consolidated statements of operations, respectively. At September 30, 2016, and December 31, 2015, the fair value of the derivative liabilities was estimated using the Black-scholes option-pricing model with the following assumptions: September 30, 2016 December 31, 2015 Dividend rate 0 0 Term (in years) 0.41 to 0.08 years 0.67 years Volatility 100.0 % 100.0 % Risk-free interest rate 0.20% to 0.39% 0.66 % At September 30, 2016 and December 31, 2015, convertible promissory notes consisted of the following: September 30, December 31, Principal amount $ 87,834 $ 250,000 Less: unamortized debt discount — (120,813 ) Convertible notes payable, net $ 87,834 $ 129,187 |
Loans Payable
Loans Payable | 9 Months Ended |
Sep. 30, 2016 | |
Loans Payable | |
Loans Payable | NOTE 4 – LOANS PAYABLE On September 23, 2016, the Company entered into a business loan and security agreement with EBF Partners, LLC (the “EBF Loan”). Pursuant to the EBF Loan, the Company borrowed $20,000. The Company is required to repay the EBF Loan by making daily payments of $204 on each business day until the purchased amount of $28,200 is paid in full. Each payment is deducted directly from the Company’s bank accounts. The EBF Loan has an effective interest rate of approximately 116%, is secured by the Company’s assets and is personally guaranteed by the Company’s chief executive officer. At September 30, 2016, amounts due under the EBF Loan amounted to $19,054. On September 26, 2016, the Company entered into a business loan and security agreement with On Deck Capital, Inc. (the “On Deck Loan”). Pursuant to the On Deck Loan, the Company borrowed $35,000 and received net proceeds of $34,125 after paying a loan origination fee of $825. The Company is required to repay the On Deck Loan by making 252 daily payments of $190 on each business day until the purchased amount of $47,951 is paid in full. Each payment is deducted directly from the Company’s bank accounts. The On Deck Loan has an effective interest rate of approximately 66%, is secured by the Company’s assets and is personally guaranteed by the Company’s chief executive officer. At September 30, 2016, amounts due under the On Deck Loan amounted to $34,490. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions | |
Related Party Transactions | NOTE 5 – RELATED PARTY TRANSACTIONS From time to time, the Company receives advances from the Company’s chief executive officer for working capital purposes. The advances are non-interest bearing and are payable on demand. For the nine months ended September 30, 2016 and 2015, due to related party activity consisted of the following: Nine Months ended Nine Months ended Balance due to related party at beginning of period $ 38,434 $ 8,051 Working capital advances received 38,000 800 Repayments made and conversions (42,380 ) (983 ) Balance due to related party at end of period $ 34,054 $ 7,868 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 6 - STOCKHOLDERS’ EQUITY Preferred stock The preferred stock may be issued in one or more series. The Company’s board of directors are authorized to issue the shares of preferred stock in such series and to fix from time to time before issuance thereof the number of shares to be included in any such series and the designation, powers, preferences and relative, participating, optional or other rights, and the qualifications, limitations or restrictions thereof, of such series. On February 19, 2016, the Board of Directors of the Company authorized and approved to create a new class of voting preferred stock called “Series A Preferred Stock”, consisting of 1,000,000 shares authorized, $.001 par value. The preferred stock is not convertible into any other class or series of stock and has no liquidation preference value. The Series A Preferred Stock was issued to ensure perpetual control of at least 51% is provided to the holder of the Series A Preferred Stock. On all matters to come before the shareholders of the Company, the holders of Series A Preferred shall have that number of votes per share (rounded to the nearest whole share) equal to the product of (x) the number of shares of Series A Preferred held on the record date for the determination of the holders of the shares entitled to vote (the “Record Date”), or, if no record date is established, at the date such vote is taken or any written consent of shareholders is first solicited, and (y) 50. In the event that the votes by the holders of the Series A Preferred Stock do not total at least 51% of the votes of all classes of the Company’s authorized capital stock entitled to vote, then regardless of the provisions of this paragraph, in any such case, the votes cast by a majority of the holders of the Series A Preferred Stock shall be deemed to equal 51% of all votes cast at any meeting of stockholders, or any issue put to the stockholders for voting and the Company may state that any such action approved by at least a majority of the holders of the Series A Preferred Stock was had by majority vote of the holders of all classes of the Company’s capital stock. On February 19, 2016, the Company issued 1,000,000 shares of Series A Preferred Stock to its chief executive officer. In connection with the issuance of Series A preferred shares, the Company recorded a nominal amount of stock-based compensation of $1,000 since the shares had no economic value, on the date of the issuance of such shares, the Company’s chief executive officer was the majority owner of the Company’s common shares, and the value of such voting rights were not readily and objectively measurable. Common stock issued for services On March 16, 2016, pursuant to a consulting agreement, the Company issued 16,667 shares of common stock to a consultant for investor relations services rendered. These shares were valued on the date of grant at $0.90 per share or $15,000 based on the fair value of services performed. In March 2016, in connection with the issuance of these shares, the Company recorded stock-based consulting expense of $15,000. On September 13, 2016, pursuant to a one-year consulting agreement, the Company issued 60,000 shares of common stock to a consultant for business development services rendered and to be rendered. These shares were valued on the date of grant at $0.40 per share or $24,000 based on recent sales of the Company’s common stock. In connection with this agreement, the Company recorded stock-based consulting fees, of $1,043 and a prepaid expense of $22,957 that will be amortized over the remaining one-year service period., Additionally, for the nine months ended September 30, 2016 and 2015, amortization of other prepaid stock-based consulting fees amounted to $123,405 and $105,179, respectively. Common shares issued in connection with debt addendum On April 20, 2016, June 6, 2016 and August 26, 2016, the Company entered into agreements for the addendum of the Convertible Note (see Note 3) which waived all rights to enforce any event of default, which may have been triggered by the Company’s failure to file it reports with the SEC. In connection with these agreements, the Company issued of 30,000, 40,000 and 130,000 shares of common stock, respectively, for an aggregate of 200,000 shares of common stock. These shares were valued on the date of grant at $0.40 per share or $80,000 based on recent sales of the Company’s common stock. Common stock issued for cash On February 3, 2016, the Company sold 1,200,000 shares of its common stock at $0.40 per common share for cash of $200,000 and a subscription receivable of $280,000. The subscription receivable of $280,000 was collected in April 2016. |
Commitments
Commitments | 9 Months Ended |
Sep. 30, 2016 | |
Commitments | |
Commitments | NOTE 7 – COMMITMENTS International distribution agreement On February 28, 2014, the Company entered into an International Distribution Agreement (the “International Distribution Agreement”) with its major supplier. Through September 30, 2016, the Company has complied with its minimum purchase commitments. Future minimum purchase amounts under the International Distribution Agreement at December 31, 2015 are as follows: Years ending December 31, Amount 2016 $ 1,000,000 2017 1,500,000 2018 2,500,000 Total minimum purchase amounts $ 5,000,000 |
Concentrations
Concentrations | 9 Months Ended |
Sep. 30, 2016 | |
Concentrations | |
Concentrations | NOTE 8 – CONCENTRATIONS Concentrations of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of and cash deposits. The Company places its cash in banks at levels that, at times, may exceed federally insured limits. There were no balances in excess of FDIC insured levels as of September 30, 2016 and December 31, 2015. The Company has not experienced any losses in such accounts through September 30, 2016. Geographic concentrations of sales For the nine months ended September 30, 2016 and 2015, substantially all of the Company’s revenues was to customers located outside the United States. No other geographical area accounted for more than 10% of total sales during the nine months ended September 30, 2016 and 2015. Customer concentrations For the nine months ended September 30, 2016, two customers accounted for approximately 38.7% of total sales (19.0% and 19.7%, respectively). These two customers consist of one customer from the Company’s product segment and its only customer in the logistics services segment, respectively. For the nine months ended September 30, 2015, five customers accounted for approximately 87.4% of total sales (22.5%, 14.1%, 22.7%, 13.5% and 14.6%, respectively). A reduction in sales from or loss of such customers would have a material adverse effect on the Company’s consolidated results of operations and financial condition. Vendor concentrations For the nine months ended September 30, 2016 and 2015, the Company purchased all of its products from one supplier. The loss of this supplier may have a material adverse effect on the Company’s consolidated results of operations and financial condition. |
Restatement Of 2015 Periods
Restatement Of 2015 Periods | 9 Months Ended |
Sep. 30, 2016 | |
Restatement Of 2015 Periods | |
Restatement of 2015 Periods | NOTE 9 – RESTATEMENT OF 2015 PERIODS The Company’s unaudited consolidated financial statements have been restated for the three and nine months ended September 30, 2015 to properly reflect certain transactions for revenues, costs of revenues and operating expenses in the proper period. The effect of correcting these errors in the Company’s unaudited consolidated financial statements for the three and nine months ended September 30, 2015 are shown in the table as follows: Consolidated Statement of operations For the Nine Months Ended As previously reported Adjustments to Restate As Restated Revenues $ 1,437,117 $ (63,570 ) $ 1,373,547 Cost of revenues 1,224,575 41,263 1,265,838 Gross profit 212,542 (104,833 ) 107,709 Operating expenses 360,308 (48,551 ) 311,757 Loss from operations (147,766 ) (56,282 ) (204,048 ) Other expenses — (105 ) (105 ) Net loss $ (147,766 ) $ (56,387 ) $ (204,153 ) Net loss per common share $ (0.01 ) $ (0.00 ) $ (0.01 ) Consolidated Statement of operations For the Three Months Ended As previously reported Adjustments to Restate As Restated Revenues $ 95,227 $ (70,770 ) $ 24,457 Cost of revenues 39,235 (16,301 ) 22,934 Gross profit 55,992 (54,469 ) 1,523 Operating expenses 142,597 (26,204 ) 116,393 Loss from operations (86,605 ) (28,265 ) (114,870 ) Other expenses — (58 ) (58 ) Net loss $ (86,605 ) $ (28,323 ) $ (114,928 ) Net loss per common share $ (0.01 ) $ (0.00 ) $ (0.01 ) |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting | |
Segment Reporting | NOTE 10 – SEGMENT REPORTING The Company’s principal operating segments coincide with the types of products or services to be sold. The Company’s two reportable segments for the three and nine months ended September 30, 2016 were (i) the Product Segment and (ii) the Logistics Services Segment. For the three and nine months ended September 30, 2015, the Company only operated in the Product Segment. The Company’s chief operating decision-maker has been identified as the Chairman and CEO, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Segment information is presented based upon the Company’s management organization structure as of September 30, 2016 and the distinctive nature of each segment. Future changes to this internal financial structure may result in changes to the reportable segments disclosed. There are no inter-segment revenue transactions and, therefore, revenues are only to external customers. Segment operating profits or loss is determined based upon internal performance measures used by the chief operating decision-maker. The Company derives the segment results from its internal management reporting system. The accounting policies the Company uses to derive reportable segment results are the same as those used for external reporting purposes. Management measures the performance of each reportable segment based upon several metrics, including net revenues, gross profit and operating income (loss). Management uses these results to evaluate the performance of, and to assign resources to, each of the reportable segments. The Company manages certain operating expenses separately at the corporate level and does not allocate such expenses to the segments. Segment income (loss) from operations excludes interest income/expense and other income or expenses and income taxes according to how a particular reportable segment’s management is measured. Management does not consider impairment charges, and unallocated costs in measuring the performance of the reportable segments. Segment information available with respect to these reportable business segments for the three and nine months ended September 30, 2016 and 2015 was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Revenues: Product segment $ 35,422 $ 24,457 $ 206,851 $ 1,373,547 Logistics services segment 50,708 - 50,708 - Total segment and consolidated revenues 86,130 24,457 257,559 1,373,547 Gross profit: Product segment 7,205 1,523 44,738 107,709 Logistics services segment 16,878 - 16,878 - Total segment and consolidated gross profit 24,083 1,523 61,616 107,709 Loss from operations Product segment $ (70,696 ) $ (103,897) $ (390,335 ) $ (163,366) Logistics services segment 16,878 - 16,878 - Total segment income (loss) (53,818 ) (103,897) (373,457 ) (163,366) Unallocated costs (47,821 ) (10,973) (146,625 ) (40,682) Total consolidated loss from operations $ (101,639 ) $ (114,870) $ (520,082 ) $ (204,048) September 30, 2016 December 31, 2015 Total assets: Product segment $ 184,081 $ 350,372 Logistics services segment 50,708 — Total segment and consolidated assets $ 247,984 $ 350,372 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 11 - SUBSEQUENT EVENTS Equity Purchase Agreement and Registration Rights Agreement On October 24, 2016 (the “Closing Date”), the Company entered into an equity purchase agreement (the “Purchase Agreement”) with Peak One Opportunity Fund, L.P. (“Buyer”), whereby, upon the terms and subject to the conditions thereof, the Buyer is committed to purchase shares of the Company’s common stock (the “Purchase Shares”) at an aggregate price of up to $5,000,000 (the “Total Commitment Amount”) over the course of its 24-month term. From time to time over the 24-month term of the Purchase Agreement, commencing on the date on which a registration statement registering the Purchase Shares (the “Registration Statement”) becomes effective, the Company may, in its sole discretion, provide the Buyer with a put notice (each a “Put Notice”) to purchase a specified number of the Purchase Shares (each a “Put Amount Requested”) subject to the limitations discussed below and contained in the Purchase Agreement. Upon delivery of a Put Notice, the Company must deliver the Put Amount Requested as Deposit Withdrawal at Custodian (“DWAC”) shares to Buyer within two trading days. The actual amount of proceeds the Company receives pursuant to each Put Notice (each, the “Put Amount”) is to be determined by multiplying the Put Amount Requested by the applicable purchase price. The purchase price for each of the Purchase Shares equals 90% of the “Market Price,” which is defined as the lesser of the (i) lowest closing bid price of our common stock for any trading day during the ten (10) trading days immediately preceding the date of the respective Put Notice, or (ii) lowest closing bid price of the common stock for any trading day during the seven trading days immediately following the clearing date associated with the applicable Put Notice (the “Valuation Period”). Within three trading days following the end of the Valuation Period, the Buyer will deliver the Put Amount to the Company via wire transfer. Equity Purchase Agreement and Registration Rights Agreement (continued) The Put Amount Requested pursuant to any single Put Notice must have an aggregate value of at least $15,000, and cannot exceed the lesser of (i) 200% of the average daily trading value of the common stock in the ten trading days immediately preceding the Put Notice or (ii) such number of shares of common stock that has an aggregate value of $100,000. In order to deliver a Put Notice, certain conditions set forth in the Purchase Agreement must be met, as provided therein. In addition, the Company is prohibited from delivering a Put Notice if: (i) the sale of Purchase Shares pursuant to such Put Notice would cause the Company to issue and sell to Buyer, or Buyer to acquire or purchase, a number of shares of the Company’s common stock that, when aggregated with all shares of common stock purchased by Buyer pursuant to all prior Put Notices issued under the Purchase Agreement, would exceed the Total Commitment Amount; or (ii) the sale of the Commitment Shares pursuant to the Put Notice would cause the Company to issue and sell to Buyer, or Buyer to acquire or purchase, an aggregate number of shares of common stock that would result in Buyer beneficially owning more than 4.99% of the issued and outstanding shares of the Company’s common stock. Unless earlier terminated, the Purchase Agreement will terminate automatically on the earlier to occur of: (i) 24 months after the initial effectiveness of the Registration Statement, (ii) the date on which the Buyer has purchased or acquired all of the Purchase Shares, or (iii) the date on which certain bankruptcy proceedings are initiated with respect to the Company. In connection with the execution of the Purchase Agreement, the Company agreed to issue 650,000 shares of its common stock (the “Commitment Shares”) to Buyer or Buyer’s designee as a commitment fee. On the Closing Date, and in connection with the Purchase Agreement, the Company also entered into a registration rights agreement (the “Registration Rights Agreement”) with Buyer whereby the Company is obligated to file the Registration Statement to register the resale of the Commitment Shares and Purchase Shares. Pursuant to the Registration Rights Agreement, the Company must (i) file the Registration Statement within thirty calendar days from the Closing Date, (ii) use reasonable efforts to cause the Registration Statement to be declared effective under the Securities Act of 1933, as amended (the “Securities Act”), as promptly as possible after the filing thereof, but in any event no later than the 90th calendar day following the Closing Date, and (iii) use its reasonable efforts to keep such Registration Statement continuously effective under the Securities Act until all of the Commitment Shares and Purchase Shares have been sold thereunder or pursuant to Rule 144. Securities Purchase Agreement and Debenture On October 24, 2016 (the “Issuance Date”), the Company entered into a securities purchase agreement (the “SPA”) with Buyer, whereby Buyer agreed to invest up to $346,500 (the “Purchase Price”) in the Company in exchange for the convertible debentures, upon the terms and subject to the conditions thereof. Pursuant to the SPA, the Company issued a convertible debenture to Buyer on October 26, 2016, in the original principal amount of $85,000, which bears interest at 0% per annum (the “First Debenture”). The Buyer paid the portion of the Purchase Price associated with the First Debenture, consisting of $76,500 (minus the applicable fees under the SPA), to the Company in cash on October 26, 2016. Each convertible debenture issued pursuant to the SPA, coupled with the accrued and unpaid interest relating to each convertible debenture, is due and payable three years from the issuance date of the respective convertible debenture. Any amount of principal or interest that is due under each convertible debenture, which is not paid by the respective maturity date, will bear interest at the rate of 18% per annum until it is satisfied in full. Additionally, the Buyer has the right at any time to convert amounts owed under each convertible debenture into shares of the Company’s common stock at the closing price of the Common Stock on September 8, 2015. Each debenture shall contain representations, warranties, events of default, beneficial ownership limitations, and other provisions that are customary of similar instruments. The Buyer is entitled to, at any time or from time to time, convert each convertible debenture issued under the SPA into shares of the Company’s common stock, at a conversion price per share (the “Conversion Price”) equal to either: (i) if no event of default has occurred under the respective convertible debenture and the date of conversion is prior to the date that is one hundred eighty days after the issuance date of the respective convertible debenture, $0.25, or (ii) if an event of default has occurred under the respective convertible debenture or the date of conversion is on or after the date that is one hundred eighty days after the issuance date of the respective convertible debenture, the lesser of (a) $0.25 or (b) 65% of the lowest closing bid price of the common stock for the twenty trading days immediately preceding the date of the date of conversion (provided, further, that if either the Company is not DWAC operational at the time of conversion or the common stock is traded on the OTC Pink at the time of conversion, then 65% shall automatically adjust to 60%), subject in each case to equitable adjustments resulting from any stock splits, stock dividends, recapitalizations or similar events. Securities Purchase Agreement and Debenture (continued) We may redeem each convertible debenture issued under the SPA, upon not more than two days written notice, for an amount (the “Redemption Price”) equal to: (i) if the Redemption Date (as defined below) is ninety days or less from the date of issuance of the respective convertible debenture, 105% of the sum of the Principal Amount so redeemed plus accrued interest, if any; (ii) if the Redemption Date is greater than or equal to ninety one days from the date of issuance of the respective convertible debenture and less than or equal to one hundred twenty days from the date of issuance of the respective convertible debenture, 110% of the sum of the Principal Amount so redeemed plus accrued interest, if any; (iii) if the Redemption Date is greater than or equal to one hundred twenty one days from the date of issuance of the respective convertible debenture and less than or equal to one hundred fifty days from the date of issuance of the respective convertible debenture, 120% of the sum of the Principal Amount so redeemed plus accrued interest, if any; (iv) if the Redemption Date is greater than or equal to one hundred fifty one days from the date of issuance of the respective convertible debenture and less than or equal to one hundred eighty days from the date of issuance of the respective convertible debenture, 130% of the sum of the Principal Amount so redeemed plus accrued interest, if any; and (v) if either (1) the respective convertible debenture is in default but the Buyer consents to the redemption notwithstanding such default or (2) the Redemption Date is greater than or equal to one hundred eighty one days from the date of issuance of the respective convertible debenture, 140% of the sum of the Principal Amount so redeemed plus accrued interest, if any. The date upon which the respective convertible debenture is redeemed and paid shall be referred to as the “Redemption Date” (and, in the case of multiple redemptions of less than the entire outstanding Principal Amount, each such date shall be a Redemption Date with respect to the corresponding redemption). In connection with the issuance of this First Debenture, the Company determined that the terms of the First Debenture contain terms that are not fixed monetary amounts at inception. Accordingly, under the provisions of FASB ASC Topic No. 815-40, “Derivatives and Hedging – Contracts in an Entity’s Own Stock”, the embedded conversion option contained in the convertible instruments will be accounted for as derivative liabilities at the date of issuance and shall be adjusted to fair value through earnings at each reporting date. Other On October 31, 2016, we repaid all remaining principal and interest of the Convertible Note with Firstfire Global Opportunities Fund LLC. |
Summary Of Significant Accoun17
Summary Of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Summary Of Significant Accounting Policies Policies | |
Use of Estimates | Use of estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States 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 revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates for the nine months ended September 30, 2016 and 2015 include estimates of current and deferred income taxes and deferred tax valuation allowances, the fair value of derivative liabilities, and the fair value of non-cash equity transactions. |
Fair Value of Financial Instruments and Fair Value Measurements | Fair value of financial instruments and fair value measurements FASB ASC 820 — Fair Value Measurements and Disclosures, Level 1- Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. Level 2- Inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. Level 3- Inputs are unobservable inputs that reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, loans, accounts payable, accrued expenses, and other payables approximate their fair market value based on the short-term maturity of these instruments. The Company analyzes all financial and non-financial instruments with features of both liabilities and equity under the FASB’s accounting standard for such instruments. Under this standard, financial and non-financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company accounts for one instrument at fair value using level 3 valuation. At September 30, 2016 At December 31, 2015 Description Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Derivative liability — — $ 2,093 — — $ 73,236 A roll forward of the level 3 valuation financial instruments is as follows: Derivative Liability Balance at December 31, 2015 $ 73,236 Reclassification of derivative liability to equity (13,728 ) Change in fair value included in net loss (57,415 ) Balance at September 30, 2016 $ 2,093 ASC 825-10 “Financial Instruments”, allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments. |
Cash and Cash Equivalents | Cash and cash equivalents For purposes of the consolidated statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market accounts to be cash equivalents. |
Accounts Receivable | Accounts receivable The Company recognizes an allowance for losses on accounts receivable in an amount equal to the estimated probable losses net of recoveries. The allowance is based on an analysis of historical bad debt experience, current receivables aging, and expected future write-offs, as well as an assessment of specific identifiable customer accounts considered at risk or uncollectible. The expense associated with the allowance for doubtful accounts is recognized as general and administrative expense. |
Advances to Supplier | Advances to Supplier Advances to supplier represent the advance payments for the purchase of product from supplier. |
Impairment of Long-Lived Assets | Impairment of long-lived assets In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. |
Derivative Liabilities | Derivative liabilities The Company has certain financial instruments that are embedded derivatives associated with capital raises. The Company evaluates all its financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with FASB ASC 810-10-05-4 and 815-40. This accounting treatment requires that the carrying amount of any embedded derivatives be recorded at fair value at issuance and marked-to-market at each balance sheet date. In the event that the fair value is recorded as a liability, as is the case with the Company, the change in the fair value during the period is recorded as either income or expense. Upon conversion or exercise, the derivative liability is marked to fair value at the conversion date and then the related fair value is reclassified to equity. |
Revenue Recognition | Revenue recognition Pursuant to the guidance of ASC Topic 605, the Company recognizes sales when persuasive evidence of an arrangement exists, delivery has occurred or services have been provided, the purchase price is fixed or determinable and collectability is reasonably assured. For product sale, the Company’s standard terms are “ex works”, with title transferring to its customer at the Company suppliers’ loading docks or upon embarkation with risk of loss being assumed by the customer at the shipping point. The Company has a small percentage of sales with other terms, and revenue is recognized in accordance with the terms of the related customer purchase order. Shipping and handling costs billed to customers are recognized in revenue. For logistics services performed, the Company recognizes revenue upon performance and completion of services rendered. |
Cost of Sales | Cost of sales Cost of sales includes inventory costs, materials and supplies costs, and shipping and handling costs incurred. |
Shipping and Handling Costs | Shipping and handling costs For the nine months ended September 30, 2016 and 2015, shipping and handling costs incurred for product shipped to customers are included in cost of sales and amounted to $33,569 and $127,785, respectively. Shipping and handling costs charged to customers are included in sales. |
Advertising Costs | Advertising costs All costs related to advertising of the Company’s products are expensed in the period incurred. |
Income Taxes | Income taxes The Company accounts for income tax using the liability method prescribed by ASC 740, “ Income Taxes The Company follows the accounting guidance for uncertainty in income taxes using the provisions of Accounting Standards Codification (ASC) 740 “Income Taxes |
Stock-Based Compensation | Stock-based compensation Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the service period of the award. Common stock awards issued to consultants represent common stock granted to non-employees in exchange for services at fair value. The measurement dates for such awards are set at the dates that the contracts are entered into as the awards are non-forfeitable and vest immediately. The measurement date fair value is then recognized over the service period as if the Company has paid cash for such service. |
Loss Per Share of Common Stock | Loss per share of common stock ASC 260 “Earnings Per Share”, requires dual presentation of basic and diluted earnings per share (“EPS”) with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Basic net loss per common share is computed by dividing net loss available to common shareholders by the weighted average number of shares of common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. Additionally, potentially dilutive common shares consist of common stock issuable upon conversion of convertible debt. These common stock equivalents may be dilutive in the future . September 30, September 30, Convertible notes 207,097 230,769 |
Segment Reporting | Segment reporting The Company uses “the management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Company’s chief operating decision maker is the Chairman and chief executive officer (“CEO”) of the Company, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. The Company classified the reportable operating segments into (i) the sale and distribution of products to the hospitality industry segment, and (ii) logistics services segment. |
Recent Accounting Pronouncements | Recent accounting pronouncements In May 2014, the FASB issued an update ("ASU 2014-09") Revenue from Contracts with Customers. In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern, In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes Income Taxes In February 2016, the FASB issued its new lease accounting guidance in ASU No. 2016-02, Leases (Topic 842). Under the new guidance, lessees will be required to recognize for all leases (with the exception of short-term leases) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The new standard is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of this ASU to the Company’s consolidated financial statements and related disclosures. In March 2016, the FASB issued its new stock compensation guidance in ASU No. 2016-09 (Topic 718). First, under the new guidance, companies will be required to recognize the income tax effects of share-based awards in the income statement when the awards vest or are settled (i.e., additional paid-in capital (“APIC”) or APIC pools will be eliminated). In addition, the new guidance allows a withholding amount of awarded shares with a fair value up to the amount of tax owed using the maximum, instead of the minimum, statutory tax rate without triggering liability classification for the award. Lastly, the new guidance allows companies to elect whether to account for forfeitures of share-based payments by (1) recognizing forfeitures of awards as they occur or (2) estimating the number of awards expected to be forfeited and adjusting the estimate when it is likely to change, as is currently required. The new standard is effective for annual periods beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. The result of adopting this guidance is not expected to have a material impact on the Company’s consolidated financial statements. There are no other recently issued accounting standards that apply to us or that are expected to have a material impact on our results of operations, financial condition, or cash flows |
Summary Of Significant Accoun18
Summary Of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Summary Of Significant Accounting Policies Tables | |
Schedule of Fair Value Hierarchy for Financial Liabilites | The Company accounts for one instrument at fair value using level 3 valuation. At September 30, 2016 At December 31, 2015 Description Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Derivative liability — — $ 2,093 — — $ 73,236 |
Schedule of Roll Forward Valuation of Derivative Liability | A roll forward of the level 3 valuation financial instruments is as follows: Derivative Liability Balance at December 31, 2015 $ 73,236 Reclassification of derivative liability to equity (13,728 ) Change in fair value included in net loss (57,415 ) Balance at September 30, 2016 $ 2,093 |
Schedule of Computation of Earnings Per Share | Potentially dilutive common shares were excluded from the computation of diluted shares outstanding as they would have an anti-dilutive impact on the Company’s net losses and consisted of the following: September 30, September 30, Convertible notes 207,097 230,769 |
Convertible Notes (Tables)
Convertible Notes (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Convertible Notes Tables | |
Schedule of Assumptions Used in Valuation of Derivatives | At September 30, 2016, and December 31, 2015, the fair value of the derivative liabilities was estimated using the Black-scholes option-pricing model with the following assumptions: September 30, 2016 December 31, 2015 Dividend rate 0 0 Term (in years) 0.41 to 0.08 years 0.67 years Volatility 100.0 % 100.0 % Risk-free interest rate 0.20% to 0.39% 0.66 % |
Schedule of Convertible Promissory Notes | At September 30, 2016 and December 31, 2015, convertible promissory notes consisted of the following: September 30, December 31, Principal amount $ 87,834 $ 250,000 Less: unamortized debt discount — (120,813 ) Convertible notes payable, net $ 87,834 $ 129,187 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions Tables | |
Schedule of Due to Related Party Activity | For the nine months ended September 30, 2016 and 2015, due to related party activity consisted of the following: Nine Months ended Nine Months ended Balance due to related party at beginning of period $ 38,434 $ 8,051 Working capital advances received 38,000 800 Repayments made and conversions (42,380 ) (983 ) Balance due to related party at end of period $ 34,054 $ 7,868 |
Commitments (Tables)
Commitments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Commitments Tables | |
Schedule of Future Minimum Purchase Amounts | Future minimum purchase amounts under the International Distribution Agreement at December 31, 2015 are as follows: Years ending December 31, Amount 2016 $ 1,000,000 2017 1,500,000 2018 2,500,000 Total minimum purchase amounts $ 5,000,000 |
Restatement Of 2015 Periods (Ta
Restatement Of 2015 Periods (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Restatement Of 2015 Periods Tables | |
Schedule of Company's Consolidated Statement of Operations | The effect of correcting these errors in the Company’s unaudited consolidated financial statements for the three and nine months ended September 30, 2015 are shown in the table as follows: Consolidated Statement of operations For the Nine Months Ended As previously reported Adjustments to Restate As Restated Revenues $ 1,437,117 $ (63,570 ) $ 1,373,547 Cost of revenues 1,224,575 41,263 1,265,838 Gross profit 212,542 (104,833 ) 107,709 Operating expenses 360,308 (48,551 ) 311,757 Loss from operations (147,766 ) (56,282 ) (204,048 ) Other expenses — (105 ) (105 ) Net loss $ (147,766 ) $ (56,387 ) $ (204,153 ) Net loss per common share $ (0.01 ) $ (0.00 ) $ (0.01 ) Consolidated Statement of operations For the Three Months Ended As previously reported Adjustments to Restate As Restated Revenues $ 95,227 $ (70,770 ) $ 24,457 Cost of revenues 39,235 (16,301 ) 22,934 Gross profit 55,992 (54,469 ) 1,523 Operating expenses 142,597 (26,204 ) 116,393 Loss from operations (86,605 ) (28,265 ) (114,870 ) Other expenses — (58 ) (58 ) Net loss $ (86,605 ) $ (28,323 ) $ (114,928 ) Net loss per common share $ (0.01 ) $ (0.00 ) $ (0.01 ) |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting Tables | |
Schedule of Reportable Business Segments | Segment information available with respect to these reportable business segments for the three and nine months ended September 30, 2016 and 2015 was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Revenues: Product segment $ 35,422 $ 24,457 $ 206,851 $ 1,373,547 Logistics services segment 50,708 - 50,708 - Total segment and consolidated revenues 86,130 24,457 257,559 1,373,547 Gross profit: Product segment 7,205 1,523 44,738 107,709 Logistics services segment 16,878 - 16,878 - Total segment and consolidated gross profit 24,083 1,523 61,616 107,709 Loss from operations Product segment $ (70,696 ) $ (103,897) $ (390,335 ) $ (163,366) Logistics services segment 16,878 - 16,878 - Total segment income (loss) (53,818 ) (103,897) (373,457 ) (163,366) Unallocated costs (47,821 ) (10,973) (146,625 ) (40,682) Total consolidated loss from operations $ (101,639 ) $ (114,870) $ (520,082 ) $ (204,048) September 30, 2016 December 31, 2015 Total assets: Product segment $ 184,081 $ 350,372 Logistics services segment 50,708 — Total segment and consolidated assets $ 247,984 $ 350,372 |
Summary Of Significant Accoun24
Summary Of Significant Accounting Policies (Schedule Of Fair Value Hierarchy For Financial Liabilites) (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | $ 2,093 | $ 73,236 |
Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | ||
Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | $ 2,093 | $ 73,236 |
Summary Of Significant Accoun25
Summary Of Significant Accounting Policies (Schedule Of Roll Forward Valuation Of Derivative Liability) (Details) - Derivative Liability [Member] | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Balance at December 31, 2015 | $ 73,236 |
Reclassification of derivative liability to equity | 13,728 |
Change in fair value included in net loss | (57,415) |
Balance at September 30, 2016 | $ 2,093 |
Summary Of Significant Accoun26
Summary Of Significant Accounting Policies (Schedule Of Computation Of Earnings Per Share) (Details) - shares | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Convertible Notes [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 207,097 | 230,769 |
Convertible Notes (Schedule Of
Convertible Notes (Schedule Of Assumptions Used In Valuation Of Derivatives) (Details) - Derivative Liability [Member] | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Assumptions Used in Valuation of Derivatives - Black Scholes Option Pricing Model: | ||
Dividend rate | 0.00% | 0.00% |
Term (in years) | 8 months 1 day | |
Volatility | 100.00% | 100.00% |
Risk-free interest rate | 0.66% | |
Minimum [Member] | ||
Assumptions Used in Valuation of Derivatives - Black Scholes Option Pricing Model: | ||
Term (in years) | 29 days | |
Risk-free interest rate | 0.20% | |
Maximum [Member] | ||
Assumptions Used in Valuation of Derivatives - Black Scholes Option Pricing Model: | ||
Term (in years) | 4 months 28 days | |
Risk-free interest rate | 0.39% |
Convertible Notes (Schedule O28
Convertible Notes (Schedule Of Convertible Promissory Notes) (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Short-term Debt [Line Items] | ||
Convertible notes payable, net | $ 87,834 | $ 129,187 |
Convertible Promissory Notes [Member] | ||
Short-term Debt [Line Items] | ||
Principal amount | 87,834 | 250,000 |
Less: unamortized debt discount | 120,813 | |
Convertible notes payable, net | $ 87,834 | $ 129,187 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Related Party Transaction [Line Items] | ||
Balance due to related party at beginning of period | $ 38,434 | |
Working capital advances received | 38,000 | |
Repayments made and conversions | 42,380 | |
Balance due to related party at end of period | 34,054 | |
Chief Executive Officer [Member] | ||
Related Party Transaction [Line Items] | ||
Balance due to related party at beginning of period | 38,434 | $ 8,051 |
Working capital advances received | 38,000 | 800 |
Repayments made and conversions | 42,380 | 983 |
Balance due to related party at end of period | $ 34,054 | $ 7,868 |
Commitments (Details)
Commitments (Details) - International Distribution Agreement With Major Supplier | Dec. 31, 2015USD ($) |
Years ending December 31, | |
2,016 | $ 1,000,000 |
2,017 | 1,500,000 |
2,018 | 2,500,000 |
Total minimum purchase amounts | $ 5,000,000 |
Restatement Of 2015 Periods (De
Restatement Of 2015 Periods (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues | $ 86,130 | $ 24,457 | $ 257,559 | $ 1,373,547 |
Cost of revenues | 62,047 | 195,943 | ||
Gross profit | 24,083 | 1,523 | 61,616 | 107,709 |
Operating expenses | 125,722 | 581,698 | ||
Loss from operations | (101,639) | (114,870) | (520,082) | (204,048) |
Other expenses | (88,731) | (178,864) | ||
Net loss | $ (190,370) | $ (698,946) | ||
Net loss per common share | $ (0.01) | $ (0.03) | ||
As Previously Reported [Member] | ||||
Revenues | 95,227 | 1,437,117 | ||
Cost of revenues | 39,235 | 1,224,575 | ||
Gross profit | 55,992 | 212,542 | ||
Operating expenses | 142,597 | 360,308 | ||
Loss from operations | (86,605) | (147,766) | ||
Other expenses | ||||
Net loss | $ (86,605) | $ (147,766) | ||
Net loss per common share | $ (0.01) | $ (0.01) | ||
Adjustments To Restate [Member] | ||||
Revenues | $ (70,770) | $ (63,570) | ||
Cost of revenues | (16,301) | 41,263 | ||
Gross profit | (54,469) | (104,833) | ||
Operating expenses | (26,204) | (48,551) | ||
Loss from operations | (28,265) | (56,282) | ||
Other expenses | (58) | (105) | ||
Net loss | $ (28,323) | $ (56,387) | ||
Net loss per common share | $ 0 | $ 0 | ||
As Restated [Member] | ||||
Revenues | $ 24,457 | $ 1,373,547 | ||
Cost of revenues | 22,934 | 1,265,838 | ||
Gross profit | 1,523 | 107,709 | ||
Operating expenses | 116,393 | 311,757 | ||
Loss from operations | (114,870) | (204,048) | ||
Other expenses | (58) | (105) | ||
Net loss | $ (114,928) | $ (204,153) | ||
Net loss per common share | $ (0.01) | $ (0.01) |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Total segment and consolidated revenues | $ 86,130 | $ 24,457 | $ 257,559 | $ 1,373,547 | |
Total segment and consolidated gross profit | 24,083 | 1,523 | 61,616 | 107,709 | |
Total segment income (loss) | (53,818) | (103,897) | (373,457) | (163,366) | |
Unallocated costs | (47,821) | (10,973) | (146,625) | (40,682) | |
Total consolidated loss from operations | (101,639) | (114,870) | (520,082) | (204,048) | |
Total segment and consolidated assets | 247,984 | 247,984 | $ 350,372 | ||
Product Segment [Member] | |||||
Total segment and consolidated revenues | 35,422 | 24,457 | 206,851 | 1,373,547 | |
Total segment and consolidated gross profit | 7,205 | 1,523 | 44,738 | 107,709 | |
Total segment income (loss) | (70,696) | (103,897) | (390,335) | (163,366) | |
Total segment and consolidated assets | 184,081 | 184,081 | 50,708 | ||
Logistics Services Segment [Member] | |||||
Total segment and consolidated revenues | 50,708 | 50,708 | |||
Total segment and consolidated gross profit | 16,878 | 16,878 | |||
Total segment income (loss) | 16,878 | 16,878 | |||
Total segment and consolidated assets | $ 350,372 | $ 350,372 |
Organization And Basis Of Pre33
Organization And Basis Of Presentation (Narrative) (Details) - USD ($) | 1 Months Ended | ||
Mar. 03, 2014 | Feb. 28, 2014 | Sep. 30, 2016 | |
Working capital deficit | $ 21,282 | ||
Common Stock [Member] | |||
Reverse stock split | 1-for-500 | ||
Purchase Agreement With Petrone Food Works, Inc. (PFW) And Shareholder Of PFW [Member] | |||
Acquisition percentage of PFW’s issued and outstanding common stock from the PFW shareholder | 100.00% | ||
Liabilities assumed in connection with purchase agreement | $ 30,000 | ||
Purchase Agreement With Petrone Food Works, Inc. (PFW) And Shareholder Of PFW [Member] | Common Stock [Member] | |||
Stock issued to PFW for acquisition under purchase agreement | 11,760,542 | ||
Percentage of outstanding common stock of the company | 98.40% | ||
Change in no of shares issued in connection with purchase agreement after reverse stock split | 195,607 |
Summary Of Significant Accoun34
Summary Of Significant Accounting Policies (Narrative) (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cost Of Sales [Member] | ||
Shipping and handling cost | $ 33,569 | $ 127,785 |
Convertible Notes (Narrative) (
Convertible Notes (Narrative) (Details) - USD ($) | Aug. 26, 2016 | Jun. 06, 2016 | Apr. 20, 2016 | Dec. 28, 2015 | Dec. 22, 2015 | Jul. 01, 2014 | Dec. 31, 2015 | Aug. 26, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2013 | Feb. 03, 2016 |
Short-term Debt [Line Items] | ||||||||||||
Convertible notes payable | $ 129,187 | $ 87,834 | ||||||||||
Repayment of convertible note payable | 162,166 | |||||||||||
Amortization of debt discount | 120,813 | |||||||||||
Common Stock [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Share issue price | $ 0.40 | |||||||||||
Convertible Promissory Note Agreement With Individual - 2013 [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Convertible notes face value | $ 20,000 | |||||||||||
Convertible notes description | The notes were non-interest bearing, unsecured and were due on demand. | |||||||||||
Convertible notes conversion terms | The notes are convertible into shares of stock of the Company at the market price on the date of conversion. | |||||||||||
Convertible notes payable | 20,000 | |||||||||||
Convertible Promissory Note Agreement With Individual - July 01, 2014 [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Convertible notes face value | $ 10,000 | |||||||||||
Convertible notes description | The notes were non-interest bearing, unsecured and were due on demand. | |||||||||||
Convertible notes conversion terms | The notes are convertible into shares of stock of the Company at the market price on the date of conversion. | |||||||||||
Convertible Promissory Note Agreement With Individual - July 01, 2014 [Member] | Common Stock [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Stock issued for debt conversion, shares | 10,000 | |||||||||||
Stock issued for debt conversion, value | $ 4,000,000 | |||||||||||
Share issue price | $ 0.0025 | |||||||||||
Secured Convertible Promissory Note With First Fire Global Opportunities Fund LLC - December 28, 2015 [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Convertible notes face value | $ 230,000 | |||||||||||
Convertible notes conversion terms | The Lender is entitled, at their option, at any time after the eighth month anniversary of these Convertible Note, to convert all or any lesser portion of the outstanding principal amount and accrued but unpaid interest into the Companys common stock. The conversion price shall equal $0.50 per share (the "Fixed Conversion Price") provided, however that from and after the occurrence of any event of default, as defined, the conversion price shall be the lower of: (i) the Fixed Conversion Price or (ii) 50% multiplied by the lowest sales price of the common stock in a public market during the ten consecutive Trading Day period immediately preceding the Trading Day that the Company receives a notice of conversion. | |||||||||||
Convertible notes interest percentage | 7.00% | |||||||||||
Convertible note purchase price | $ 200,000 | |||||||||||
Percentage of original issue discount | 15.00% | |||||||||||
Original issue discount | $ 30,000 | |||||||||||
Legal fees with related to convertible notes | 10,000 | |||||||||||
Net proceeds from convertible notes | $ 190,000 | |||||||||||
Convertible notes secured terms | The unpaid principal and interest is secured by the Companys common stock. | |||||||||||
Convertible notes monthly installments | $ 50,555 | |||||||||||
Convertible notes monthly payment commencing terms | It is payable in monthly installments of $50,555 commencing April 28, 2016 through August 28, 2016. | |||||||||||
Convertible notes default terms | Any amount of principal or interest on this Convertible Note, which is not paid by the due dates, shall bear interest at the rate of 15% per annum from the due date until paid. | |||||||||||
Repayment of convertible note payable | 162,166 | |||||||||||
New derivative liability | $ 73,236 | |||||||||||
Unamortized debt discount | $ 73,236 | |||||||||||
Secured Convertible Promissory Note With First Fire Global Opportunities Fund LLC - December 28, 2015 [Member] | Common Stock [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Share issue price | $ 0.225 | |||||||||||
Stock issued for convertible debt issuance costs, shares | 50,000 | |||||||||||
Unamortized debt discount in connection with convertible debt issuance costs | $ 10,725 | |||||||||||
Convertible Promissory Notes [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Convertible notes payable | 129,187 | 87,834 | ||||||||||
Unamortized debt discount | $ 120,813 | |||||||||||
Convertible Promissory Notes [Member] | Interest Expenses [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Penalities paid to lender for failure to file reports with SEC | 10,000 | |||||||||||
Amortization of debt discount | $ 120,813 | $ 0 | ||||||||||
Convertible Promissory Notes [Member] | Common Stock [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Share issue price | $ 0.40 | $ 0.40 | $ 0.40 | |||||||||
Stock issued to lender for failure to file reports with SEC, shares | 130,000 | 40,000 | 30,000 | 200,000 | 200,000 | |||||||
Stock issued to lender for failure to file reports with SEC, value | $ 80,000 | $ 80,000 |
Loans Payable (Narrative) (Deta
Loans Payable (Narrative) (Details) - USD ($) | Sep. 26, 2016 | Sep. 23, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Short-term Debt [Line Items] | ||||
Proceeds from loans | $ 55,000 | |||
Loans payable | 53,544 | |||
Business Loan And Security Agreement With EBF Partners, LLC [Member] | ||||
Short-term Debt [Line Items] | ||||
Proceeds from loans | $ 20,000 | |||
Daily payment towards loan repayment | $ 204 | |||
Loans repayment terms | The Company is required to repay the EBF Loan by making daily payments of $204 on each business day until the purchased amount of $28,200 is paid in full. Each payment is deducted directly from the Company’s bank accounts. | |||
Loans interest rate | 116.00% | |||
Loans collateral description | The loan is secured by the Company’s assets and is personally guaranteed by the Company’s chief executive officer. | |||
Loans payable | 19,054 | |||
Business Loan And Security Agreement With On Deck Capital, Inc [Member] | ||||
Short-term Debt [Line Items] | ||||
Proceeds from loans | $ 35,000 | |||
Proceeds from loans after payment of loan origination fee | 34,125 | |||
Daily payment towards loan repayment | 190 | |||
Loan origination fee | $ 825 | |||
Loans repayment terms | The Company is required to repay the On Deck Loan by making 252 daily payments of $190 on each business day until the purchased amount of $47,951 is paid in full. Each payment is deducted directly from the Company’s bank accounts. | |||
Loans interest rate | 66.00% | |||
Loans collateral description | The loan is secured by the Company’s assets and is personally guaranteed by the Company’s chief executive officer. | |||
Loans payable | $ 34,490 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) - USD ($) | Sep. 13, 2016 | Aug. 26, 2016 | Jun. 06, 2016 | Apr. 20, 2016 | Mar. 16, 2016 | Feb. 19, 2016 | Feb. 03, 2016 | Apr. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2016 | Aug. 26, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | |||||||||||
Preferred stock, par value per share | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||
Stock based compensation | $ 140,448 | |||||||||||||
Prepaid expenses amortized in future years | $ 30,598 | 30,598 | $ 131,046 | |||||||||||
Consulting expenses | $ 23,298 | 167,638 | ||||||||||||
Subscription receivable collected | $ 480,000 | |||||||||||||
Common Stock [Member] | ||||||||||||||
Share issue price | $ 0.40 | |||||||||||||
Stock issued for cash, shares | 1,200,000 | |||||||||||||
Stock issued for cash, value | $ 200,000 | |||||||||||||
Subscription receivable | $ 280,000 | |||||||||||||
Subscription receivable collected | $ 280,000 | |||||||||||||
Common Stock [Member] | Convertible Promissory Notes [Member] | ||||||||||||||
Share issue price | $ 0.40 | $ 0.40 | $ 0.40 | $ 0.40 | ||||||||||
Stock issued to lender for failure to file reports with SEC, shares | 130,000 | 40,000 | 30,000 | 200,000 | 200,000 | |||||||||
Stock issued to lender for failure to file reports with SEC, value | $ 80,000 | $ 80,000 | ||||||||||||
Common Stock [Member] | Consulting Agreement - Consultant For Investor Relations Services [Member] | ||||||||||||||
Stock issued for services, shares | 16,667 | |||||||||||||
Stock issued for services, value | $ 15,000 | |||||||||||||
Share issue price | $ 0.90 | |||||||||||||
Consulting expenses | $ 15,000 | |||||||||||||
Common Stock [Member] | Consultant For Business Development Services [Member] | ||||||||||||||
Stock issued for services, shares | 60,000 | |||||||||||||
Stock issued for services, value | $ 24,000 | |||||||||||||
Share issue price | $ 0.40 | |||||||||||||
Prepaid expenses amortized in future years | $ 22,957 | |||||||||||||
Consulting expenses | $ 1,043 | |||||||||||||
Common Stock [Member] | Consultant - Prepaid Stock Based Consulting Fees [Member] | ||||||||||||||
Consulting expenses | $ 123,405 | $ 105,179 | ||||||||||||
Series A Preferred Stock [Member] | ||||||||||||||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||||
Preferred stock, par value per share | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||
Preferred stock conversion terms | The preferred stock is not convertible into any other class or series of stock. | |||||||||||||
Preferred stock voting rights | On all matters to come before the shareholders of the Company, the holders of Series A Preferred shall have that number of votes per share (rounded to the nearest whole share) equal to the product of (x) the number of shares of Series A Preferred held on the record date for the determination of the holders of the shares entitled to vote (the Record Date), or, if no record date is established, at the date such vote is taken or any written consent of shareholders is first solicited, and (y) 50. In the event that the votes by the holders of the Series A Preferred Stock do not total at least 51% of the votes of all classes of the Companys authorized capital stock entitled to vote, then regardless of the provisions of this paragraph, in any such case, the votes cast by a majority of the holders of the Series A Preferred Stock shall be deemed to equal 51% of all votes cast at any meeting of stockholders, or any issue put to the stockholders for voting and the Company may state that any such action approved by at least a majority of the holders of the Series A Preferred Stock was had by majority vote of the holders of all classes of the Companys capital stock. | |||||||||||||
Series A Preferred Stock [Member] | Chief Executive Officer [Member] | ||||||||||||||
Stock issued to CEO, shares | 1,000,000 | |||||||||||||
Stock based compensation | $ 1,000 |
Concentrations (Narrative) (Det
Concentrations (Narrative) (Details) - Total Sales [Member] | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Geographic Concentration Risk - In The United States [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 10.00% | 10.00% |
Customer Concentration Risk [Member] | Two Customers [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 38.70% | |
Customer Concentration Risk [Member] | Customer - One [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 22.50% | |
Customer Concentration Risk [Member] | Customer - One [Member] | Product Segment [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 19.00% | |
Customer Concentration Risk [Member] | Customer - Two [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 14.10% | |
Customer Concentration Risk [Member] | Customer - Two [Member] | Logistics Services Segment [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 19.70% | |
Customer Concentration Risk [Member] | Five Customers [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 87.40% | |
Customer Concentration Risk [Member] | Customer - Three [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 22.70% | |
Customer Concentration Risk [Member] | Customer - Four [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 13.50% | |
Customer Concentration Risk [Member] | Customer - Five [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 14.60% |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) - Subsequent Event [Member] - USD ($) | Oct. 26, 2016 | Oct. 24, 2016 |
Equity Purchase Agreement And Registration Rights Agreement With Peak One Opportunity Fund, L.P. [Member] | ||
Subsequent Event [Line Items] | ||
Buyer commitment to purchase shares of company's stock, value | $ 5,000,000 | |
Agreement description | On October 24, 2016 (the “Closing Date”), the Company entered into an equity purchase agreement (the “Purchase Agreement”) with Peak One Opportunity Fund, L.P. (“Buyer”), whereby, upon the terms and subject to the conditions thereof, the Buyer is committed to purchase shares of the Company’s common stock (the “Purchase Shares”) at an aggregate price of up to $5,000,000 (the “Total Commitment Amount”) over the course of its 24-month term. From time to time over the 24-month term of the Purchase Agreement, commencing on the date on which a registration statement registering the Purchase Shares (the “Registration Statement”) becomes effective, the Company may, in its sole discretion, provide the Buyer with a put notice (each a “Put Notice”) to purchase a specified number of the Purchase Shares (each a “Put Amount Requested”) subject to the limitations discussed below and contained in the Purchase Agreement. Upon delivery of a Put Notice, the Company must deliver the Put Amount Requested as Deposit Withdrawal at Custodian (“DWAC”) shares to Buyer within two trading days. The actual amount of proceeds the Company receives pursuant to each Put Notice (each, the “Put Amount”) is to be determined by multiplying the Put Amount Requested by the applicable purchase price. The purchase price for each of the Purchase Shares equals 90% of the “Market Price,” which is defined as the lesser of the (i) lowest closing bid price of our common stock for any trading day during the ten (10) trading days immediately preceding the date of the respective Put Notice, or (ii) lowest closing bid price of the common stock for any trading day during the seven trading days immediately following the clearing date associated with the applicable Put Notice (the “Valuation Period”). Within three trading days following the end of the Valuation Period, the Buyer will deliver the Put Amount to the Company via wire transfer. The Put Amount Requested pursuant to any single Put Notice must have an aggregate value of at least $15,000, and cannot exceed the lesser of (i) 200% of the average daily trading value of the common stock in the ten trading days immediately preceding the Put Notice or (ii) such number of shares of common stock that has an aggregate value of $100,000. In order to deliver a Put Notice, certain conditions set forth in the Purchase Agreement must be met, as provided therein. In addition, the Company is prohibited from delivering a Put Notice if: (i) the sale of Purchase Shares pursuant to such Put Notice would cause the Company to issue and sell to Buyer, or Buyer to acquire or purchase, a number of shares of the Company’s common stock that, when aggregated with all shares of common stock purchased by Buyer pursuant to all prior Put Notices issued under the Purchase Agreement, would exceed the Total Commitment Amount; or (ii) the sale of the Commitment Shares pursuant to the Put Notice would cause the Company to issue and sell to Buyer, or Buyer to acquire or purchase, an aggregate number of shares of common stock that would result in Buyer beneficially owning more than 4.99% of the issued and outstanding shares of the Company’s common stock. Unless earlier terminated, the Purchase Agreement will terminate automatically on the earlier to occur of: (i) 24 months after the initial effectiveness of the Registration Statement, (ii) the date on which the Buyer has purchased or acquired all of the Purchase Shares, or (iii) the date on which certain bankruptcy proceedings are initiated with respect to the Company. In connection with the execution of the Purchase Agreement, the Company agreed to issue 650,000 shares of its common stock (the “Commitment Shares”) to Buyer or Buyer’s designee as a commitment fee. On the Closing Date, and in connection with the Purchase Agreement, the Company also entered into a registration rights agreement (the “Registration Rights Agreement”) with Buyer whereby the Company is obligated to file the Registration Statement to register the resale of the Commitment Shares and Purchase Shares. Pursuant to the Registration Rights Agreement, the Company must (i) file the Registration Statement within thirty calendar days from the Closing Date, (ii) use reasonable efforts to cause the Registration Statement to be declared effective under the Securities Act of 1933, as amended (the “Securities Act”), as promptly as possible after the filing thereof, but in any event no later than the 90th calendar day following the Closing Date, and (iii) use its reasonable efforts to keep such Registration Statement continuously effective under the Securities Act until all of the Commitment Shares and Purchase Shares have been sold thereunder or pursuant to Rule 144. | |
Securities Purchase Agreement And Debenture With Buyer [Member] | ||
Subsequent Event [Line Items] | ||
Purchase price agreed by the buyer to invest | $ 346,500 | |
Securities Purchase Agreement And Debenture With Buyer [Member] | Convertible Debenture - First Debenture [Member] | ||
Subsequent Event [Line Items] | ||
Convertible debenture principal amount | $ 85,000 | |
Convertible debenture interest rate | 0.00% | |
Proceeds from convertible debenture | $ 76,500 | |
Convertible debenture description | Each convertible debenture issued pursuant to the SPA, coupled with the accrued and unpaid interest relating to each convertible debenture, is due and payable three years from the issuance date of the respective convertible debenture. Any amount of principal or interest that is due under each convertible debenture, which is not paid by the respective maturity date, will bear interest at the rate of 18% per annum until it is satisfied in full. Additionally, the Buyer has the right at any time to convert amounts owed under each convertible debenture into shares of the Company’s common stock at the closing price of the Common Stock on September 8, 2015. Each debenture shall contain representations, warranties, events of default, beneficial ownership limitations, and other provisions that are customary of similar instruments. | |
Convertible debenture conversion description | The Buyer is entitled to, at any time or from time to time, convert each convertible debenture issued under the SPA into shares of the Company’s common stock, at a conversion price per share (the “Conversion Price”) equal to either: (i) if no event of default has occurred under the respective convertible debenture and the date of conversion is prior to the date that is one hundred eighty days after the issuance date of the respective convertible debenture, $0.25, or (ii) if an event of default has occurred under the respective convertible debenture or the date of conversion is on or after the date that is one hundred eighty days after the issuance date of the respective convertible debenture, the lesser of (a) $0.25 or (b) 65% of the lowest closing bid price of the common stock for the twenty trading days immediately preceding the date of the date of conversion (provided, further, that if either the Company is not DWAC operational at the time of conversion or the common stock is traded on the OTC Pink at the time of conversion, then 65% shall automatically adjust to 60%), subject in each case to equitable adjustments resulting from any stock splits, stock dividends, recapitalizations or similar events. | |
Convertible debenture redemption description | We may redeem each convertible debenture issued under the SPA, upon not more than two days written notice, for an amount (the “Redemption Price”) equal to: (i) if the Redemption Date (as defined below) is ninety days or less from the date of issuance of the respective convertible debenture, 105% of the sum of the Principal Amount so redeemed plus accrued interest, if any; (ii) if the Redemption Date is greater than or equal to ninety one days from the date of issuance of the respective convertible debenture and less than or equal to one hundred twenty days from the date of issuance of the respective convertible debenture, 110% of the sum of the Principal Amount so redeemed plus accrued interest, if any; (iii) if the Redemption Date is greater than or equal to one hundred twenty one days from the date of issuance of the respective convertible debenture and less than or equal to one hundred fifty days from the date of issuance of the respective convertible debenture, 120% of the sum of the Principal Amount so redeemed plus accrued interest, if any; (iv) if the Redemption Date is greater than or equal to one hundred fifty one days from the date of issuance of the respective convertible debenture and less than or equal to one hundred eighty days from the date of issuance of the respective convertible debenture, 130% of the sum of the Principal Amount so redeemed plus accrued interest, if any; and (v) if either (1) the respective convertible debenture is in default but the Buyer consents to the redemption notwithstanding such default or (2) the Redemption Date is greater than or equal to one hundred eighty one days from the date of issuance of the respective convertible debenture, 140% of the sum of the Principal Amount so redeemed plus accrued interest, if any. The date upon which the respective convertible debenture is redeemed and paid shall be referred to as the “Redemption Date” (and, in the case of multiple redemptions of less than the entire outstanding Principal Amount, each such date shall be a Redemption Date with respect to the corresponding redemption). |