Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2015 | Jun. 22, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | SaviCorp | |
Entity Central Index Key | 1,096,637 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | No | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 6,280,561,383 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,015 |
Balance Sheets
Balance Sheets - USD ($) | Mar. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 23,863 | $ 32,373 |
Inventory | 240,215 | 249,593 |
Prepaid expenses | 9,168 | 27,833 |
Total current assets: | 273,246 | 309,799 |
Long term assets: | ||
Net fixed assets | 18,517 | 21,194 |
Total assets | 291,763 | 330,993 |
Current liabilities: | ||
Convertible debt, net of unamortized discount of $0 and $0, in default | 511,440 | 511,440 |
Related party convertible debt, net of unamortized discount of $0 and $0, in default | 204,302 | 204,302 |
Notes payable, net of unamortized discount of $2,390 and $2,460, $29,217 and $30,533 in default | 101,483 | 99,914 |
Notes payable, related party, in default | 15,000 | 15,000 |
Accounts payable and accrued liabilities | 3,140,977 | 2,976,798 |
Accounts payable assumed in recapitalization | 159,295 | 159,295 |
Settlements payable | 1,101,179 | 1,101,179 |
Rescission Liability | 489,349 | 444,833 |
Derivative liabilities - embedded derivatives | 9,351,764 | 8,788,254 |
Derivative liabilities - warrants | 1,787,236 | 250,807 |
Total current liabilities | 16,862,025 | $ 14,551,822 |
Long term liabilities: | ||
Commitments and contingencies | ||
Stockholders' deficit: | ||
Common stock: $0.001 par value, 6,000,000,000 shares authorized, 5,994,510,958 and 5,982,260,958 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively | 5,994,511 | $ 5,982,261 |
Stock payable | 1,420,384 | 1,420,384 |
Subscription Receivable | (135,000) | 0 |
Additional paid-in capital | 279,301,675 | 278,640,939 |
Accumulated deficit | (303,188,457) | (300,301,024) |
Total stockholders' deficit | (16,570,262) | (14,220,829) |
Total liabilities and stockholders' deficit | 291,763 | 330,993 |
Series A Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Convertible preferred stock | 27,760 | 27,880 |
Total stockholders' deficit | 27,760 | 27,880 |
Series B Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Convertible preferred stock | 412 | 275 |
Total stockholders' deficit | 412 | 275 |
Series C Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Convertible preferred stock | 8,453 | 8,456 |
Total stockholders' deficit | $ 8,453 | $ 8,456 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2015 | Dec. 31, 2014 |
Notes payable in default | $ 29,217 | $ 30,533 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 6,000,000,000 | 6,000,000,000 |
Common stock, shares issued | 5,994,510,958 | 5,982,260,958 |
Common stock, shares outstanding | 5,994,510,958 | 5,982,260,958 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 28,000,000 | 28,000,000 |
Preferred stock, shares issued | 27,760,143 | 27,880,143 |
Preferred stock, shares outstanding | 27,760,143 | 27,880,143 |
Series B Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 411,709 | 274,602 |
Preferred stock, shares outstanding | 411,709 | 274,602 |
Series C Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 8,453,197 | 8,455,697 |
Preferred stock, shares outstanding | 8,453,197 | 8,455,697 |
Statements of Operations
Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Income Statement [Abstract] | ||
Revenue | $ 5,047 | $ 3,541 |
Cost of Goods Sold | 8,691 | 3,255 |
Gross Profit | (3,644) | 286 |
Operating costs and expenses: | ||
General and administrative expenses | 711,106 | 828,131 |
Loss from operations | (714,750) | (827,845) |
Other income and (expenses): | ||
Change in fair value of financial instruments | (2,099,940) | (820,913) |
Change in fair value of rescission liability | (44,516) | 40,299 |
Interest expense | (28,227) | (17,077) |
Total other income and (expenses), net | (2,172,683) | (797,691) |
Net loss | $ (2,887,433) | $ (1,625,536) |
Weighted average shares outstanding | 5,982,291,518 | 5,958,358,783 |
Weighted average shares outstanding-diluted | 5,982,291,518 | 5,958,358,783 |
Net profit (loss) per common share - basic | $ 0 | $ 0 |
Net profit (loss) per common share - diluted | $ 0 | $ 0 |
Statement of Stockholders' Equi
Statement of Stockholders' Equity (Deficit) - USD ($) | Series A Preferred Stock [Member] | Series B Preferred Stock [Member] | Series C Preferred Stock [Member] | Common Stock | Additional Paid-In Capital | Subscription Receivable | Stock Payable | Accumulated Deficit | Total |
Beginning balance, shares at Dec. 31, 2013 | 12,963,477 | 0 | 8,755,697 | 5,970,327,669 | |||||
Beginning balance, value at Dec. 31, 2013 | $ 12,963 | $ 0 | $ 8,756 | $ 5,970,328 | $ 273,114,451 | $ 0 | $ 1,420,384 | $ (290,806,761) | $ (10,279,879) |
Stock issued in exchange for consulting services and employee compensation, shares issued | 1,700,000 | 94,950 | 500,000 | ||||||
Stock issued in exchange for consulting services and employee compensation, amount | $ 1,700 | $ 95 | $ 500 | 3,495,855 | 3,496,150 | ||||
Stock issued for cash under Regulation D, shares issued | 12,301,666 | 159,846 | |||||||
Stock issued for cash under Regulation D, amount | $ 12,302 | $ 160 | 1,257,038 | 1,269,500 | |||||
Conversion of shares (converted)/issued | 700,000 | (300,000) | (40,000,000) | ||||||
Conversion of shares, value | $ 700 | $ (300) | $ (40,000) | 39,600 | |||||
Shares issued with debt, shares | 215,000 | ||||||||
Shares issued with debt, value | $ 215 | 60,135 | 60,350 | ||||||
Imputed interest on related party debt | 3,409 | 3,409 | |||||||
Stock issued upon exercise of warrants, shares | 71,433,289 | ||||||||
Stock issued upon exercise of warrants, value | $ 71,433 | 93,128 | 164,561 | ||||||
Stock bought back from shareholders, shares | (20,000,000) | ||||||||
Stock bought back from shareholders, value | $ (20,000) | 3,000 | (17,000) | ||||||
Tainted warrants and convertible debt issued | (330,112) | (330,112) | |||||||
Conversion of debt for stock, shares | 19,806 | ||||||||
Conversion of debt for stock, amount | $ 20 | 906,435 | 906,455 | ||||||
Net income (loss) | (9,494,263) | (9,494,263) | |||||||
Ending balance, shares at Dec. 31, 2014 | 27,880,143 | 274,602 | 8,455,697 | 5,982,260,958 | |||||
Ending balance, value at Dec. 31, 2014 | $ 27,880 | $ 275 | $ 8,456 | $ 5,982,261 | 278,640,939 | 0 | 1,420,384 | (300,301,024) | (14,220,829) |
Stock issued in exchange for consulting services and employee compensation, shares issued | 3,750 | ||||||||
Stock issued in exchange for consulting services and employee compensation, amount | $ 4 | 137,996 | 138,000 | ||||||
Stock issued for cash under Regulation D, shares issued | 133,357 | ||||||||
Stock issued for cash under Regulation D, amount | $ 133 | 534,867 | (135,000) | 400,000 | |||||
Conversion of shares (converted)/issued | (120,000) | (2,500) | 12,250,000 | ||||||
Conversion of shares, value | $ (120) | $ (3) | $ 12,250 | (12,127) | |||||
Net income (loss) | (2,887,433) | (2,887,433) | |||||||
Ending balance, shares at Mar. 31, 2015 | 27,760,143 | 411,709 | 8,453,197 | 5,994,510,958 | |||||
Ending balance, value at Mar. 31, 2015 | $ 27,760 | $ 412 | $ 8,453 | $ 5,994,511 | $ 279,301,675 | $ (135,000) | $ 1,420,384 | $ (303,188,457) | $ (16,570,262) |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Cash flows from operating activities: | ||
Net profit | $ (2,887,433) | $ (1,625,536) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Compensatory common and preferred stock issuances | 138,000 | 406,050 |
Interest expense recognized on issuance and through accretion of discount on debt | 70 | 128 |
Change in fair value of derivatives | 2,099,940 | 820,913 |
Change in fair value of rescission and legal liability | 44,516 | (40,299) |
Depreciation expense | 2,677 | 2,198 |
Changes in operating assets and liabilities: | ||
Changes in accounts receivable | 0 | 340 |
Changes in inventory | 9,378 | 7,218 |
Changes in pre-paid assets | 18,665 | 18,333 |
Changes in accounts payable and accrued liabilities | 164,179 | 92,021 |
Net cash used by operating activities | (410,009) | (318,634) |
Cash flows from financing activities: | ||
Proceeds from note payable | 1,499 | 10,000 |
Proceeds from sale of common and preferred stock | 400,000 | 255,000 |
Net cash provided by financing activities | 401,499 | 265,000 |
Net decrease in cash and cash equivalents | (8,510) | (53,634) |
Cash and cash equivalents at beginning of period | 32,373 | 60,612 |
Cash and cash equivalents at end of period | $ 23,863 | $ 6,978 |
1. Organization and Significant
1. Organization and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Organization and Significant Accounting Policies | SaviCorp (the "Company") is a Nevada Corporation that has acquired rights to "blow-by gas and crankcase engine emission reduction technology" which it intends to develop and market on a commercial basis. The technology is a relatively simple gasoline and diesel engine emission reduction device that the Company intends to sell to its customers for effective and efficient emission reduction and engine efficiency for implementation in both new and presently operating automobiles. The Company is considered a development stage enterprise because it currently has no significant operations, has not yet generated revenue from new business activities and is devoting substantially all of its efforts to business planning and the search for sources of capital to fund its efforts. The Company was originally incorporated as Energy Resource Management, Inc. on August 13, 2002 and subsequently adopted name changes to Redwood Energy Group, Inc. and Savi Media Group, Inc., upon completion of a recapitalization on August 26, 2002. The re-capitalization occurred when the Company acquired the non-operating public shell of Gene-Cell, Inc. Gene-Cell Inc. had no significant assets or operations at the date of acquisition and the Company assumed all liabilities that remained from its prior discontinued operation as a biopharmaceutical research company. The historical financial statements presented herein are those of Savi Media Group, Inc. and its predecessors, Redwood Energy Group, Inc. and Energy Resource Management, Inc. The non-operating public shell used to recapitalize the Company was originally incorporated as Becniel in 1986 and subsequently adopted name changes to Tzaar Corporation, Gene-Cell, Inc., Redwood Energy Group, Inc., Redwood Entertainment Group, Inc., Savi Media Group, Inc., and finally its current name SaviCorp. Significant Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the periods. Actual results could differ from estimates making it reasonably possible that a change in the estimates could occur in the near term. Cash and Cash Equivalents The Company considers all highly liquid short-term investments with an original maturity of three months or less when purchased, to be cash equivalents. The Company had cash equivalents of $23,863 as of March 31, 2015 and $32,373 as of December 31, 2014. Concentration of Credit Risk Cash and cash equivalents are the primary financial instruments that subject the Company to concentrations of credit risk. The Company maintains its cash deposits with major financial institutions selected based upon managements assessment of the financial stability. Balances periodically exceed the $100,000 federal depository insurance limit; however, the Company has not experienced any losses on deposits. Inventory Inventories are stated at the lower of cost, computed using the first-in, first-out method, or market. If the cost of the inventories exceeds their market value, provisions are made currently for the difference between the cost and the market value. Furniture and Equipment Furniture and equipment is recorded at cost. The cost and related accumulated depreciation of assets sold, retired or otherwise disposed of are removed from the respective accounts, and any resulting gains or losses are included in the results of operations. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Repairs and maintenance costs are expensed as incurred. Income Taxes The Company uses the liability method of accounting for income taxes. Under this method, deferred income taxes are recorded to reflect the tax consequences on future years of temporary differences between the tax basis of assets and liabilities and their financial amounts at year-end. The Company provides a valuation allowance to reduce deferred tax assets to their net realizable value. Stock-Based Compensation The Company adopted FASB guidance on stock based compensation on January 1, 2006. Under FASB ASC 718-10-30-2, all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. Stock and stock options issued for services and compensation totaled $138,000 and $406,050 for the periods ended March 31, 2015 and March 31, 2014, respectively. Valuation of Derivatives The Company evaluates its convertible instruments, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC Topic 815, Derivatives and Hedging. The result of this accounting treatment is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income (expense). Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815 are reclassified to liabilities at the fair value of the instrument on the reclassification date. We analyzed the derivative financial instruments (the Convertible Notes), in accordance with ASC 815. The objective is to provide guidance for determining whether an equity-linked financial instrument is indexed to an entitys own stock. This determination is needed for a scope exception which would enable a derivative instrument to be accounted for under the accrual method. The classification of a non-derivative instrument that falls within the scope of ASC 815-40-05 Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Companys Own Stock also hinges on whether the instrument is indexed to an entitys own stock. A non-derivative instrument that is not indexed to an entitys own stock cannot be classified as equity and must be accounted for as a liability. There is a two-step approach in determining whether an instrument or embedded feature is indexed to an entitys own stock. First, the instrument's contingent exercise provisions, if any, must be evaluated, followed by an evaluation of the instrument's settlement provisions. The Company utilized multinomial lattice models that value the derivative liability within the notes based on a probability weighted discounted cash flow model. The Company utilized the fair value standard set forth by the Financial Accounting Standards Board, defined as the amount at which the assets (or liability) could be bought (or incurred) or sold (or settled) in a current transaction between willing parties, that is, other than in a forced or liquidation sale. The derivative liabilities result in a reduction of the initial carrying amount (as unamortized discount) of the Convertible Notes. This derivative liability is marked-to-market each quarter with the change in fair value recorded in the income statement. Unamortized discount is amortized to interest expense using the effective interest method over the life of the Convertible Note. If the Note is converted or the warrants are exercised, the derivative liability is released and recorded as additional paid in capital. Profit/Loss Per Share Basic and diluted net profit or loss per share is computed on the basis of the weighted average number of shares of common stock outstanding during each period. See Note 11 for a discussion of potentially dilutive instruments. Fair Value of Financial Instruments The Company includes fair value information in the notes to financial statements when the fair value of its financial instruments is different from the book value. When the book value approximates fair value, no additional disclosure is made. New Accounting Pronouncements Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period In June 2014, the FASB issued an accounting standard which provides new guidance that requires share-based compensation to meet a specific performance target to be achieved in order for employees to become eligible to vest in the awards and that could be achieved after an employee completes the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation costs should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. This new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in this Update either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of ASU 2014-12 is not expected to have a material impact on our financial position or results of operations. Pushdown Accounting In November 2014, the FASB issued guidance to provide an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. After the effective date, an acquired entity can make an election to apply the guidance to future change-in-control events or to its most recent change-in-control event. However, if the financial statements for the period in which the most recent change-in-control event occurred already have been issued or made available to be issued, the application of this guidance would be a change in accounting principle. The amendments in this Update are effective on November 18, 2014. The adoption of ASU 2014-17 is not expected to have a material impact on our financial position or results of operations. We have adopted recently issued accounting pronouncements and have determined that they have no material effect on our financial position, results of operations, or cash flow. We do not expect any recently issued but not yet adopted accounting pronouncements to have a material effect on our financial position, results of operations or cash flow. |
2. Going Concern Considerations
2. Going Concern Considerations | 3 Months Ended |
Mar. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern Considerations | The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. In 2014 and 2015, the Company had limited operations and resources. At March 31, 2015, the Company is in a negative working capital position of $16,588,779 and has a stockholders' deficit of $16,570,262. Additionally, as of March 31, 2015 the Company faced substantial challenges to future success as follows: · The Company is delinquent on critical liabilities such as payments to key consultants. Such matters raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include any adjustment that might result from the outcome of this uncertainty. The goals of the Company will require a significant amount of capital and there can be no assurances that the Company will be able to raise adequate short-term capital to sustain its current operations in the development stage, or that the Company can raise adequate long-term capital from private placement of its common stock or private debt to emerge from the development stage. There can also be no assurances that the Company will ever attain profitability. The Company's long-term viability as a going concern is dependent upon certain key factors, including: · The Company's ability to obtain adequate sources of funding to sustain it during its growth stage. · The ability of the Company to successfully produce and market its gasoline and diesel engine emission reduction device in a manner that will allow it to ultimately achieve adequate profitability and positive cash flows to sustain its operations. In order to address its ability to continue as a going concern, implement its business plan and fulfill commitments made in connection with its agreement for acquisition of patent rights, the Company hopes to raise additional capital from sale of its common stock. Sources of funding may not be available on terms that are acceptable to the Company and its stockholders, or may include terms that will result in substantial dilution to existing stockholders. |
3. Accounts Payable and Accrued
3. Accounts Payable and Accrued Liabilities | 3 Months Ended |
Mar. 31, 2015 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities | Accounts Payable and Accrued Liabilities March 31, 2015 December 31, 2014 Trade accounts payable $ 1,231,264 $ 1,110,576 Accrued wages payable 1,569,434 1,541,309 Accrued interest expense 340,279 324,913 $ 3,140,977 $ 2,976,798 |
4. Accounts Payable and Accrued
4. Accounts Payable and Accrued Liabilities - Related Party | 3 Months Ended |
Mar. 31, 2015 | |
Related Party Transactions [Abstract] | |
Accounts Payable and Accrued Liabilities - Related Party | The $15,000 amount due at December 31, 2014 and March 31, 2015 consist of $10,000 to Serge Monros and $5,000 to Greg Sweeney for payments made on behalf of the Company related to the Herrera Settlement. |
5. Accounts Payable Assumed in
5. Accounts Payable Assumed in Recapitalization | 3 Months Ended |
Mar. 31, 2015 | |
Notes to Financial Statements | |
Accounts Payable Assumed in Recapitalization | Accounts payable assumed in recapitalization, represents the liabilities of the public shell, at the time, Gene-Cell, Inc. that the Company assumed as part of the recapitalization. This balance is comprised of liabilities for legal fees and trade payables incurred by Gene-Cell, Inc. (See Note 1). |
6. Settlement Payable
6. Settlement Payable | 3 Months Ended |
Mar. 31, 2015 | |
Settlement Payable | |
Settlement Payable | The Company received a letter dated June 7, 2013 with a Civil Complaint titled Arnold Lamarr Weese, et al v. SaviCorp filed in the Northern District of West Virginia. In addition to SaviCorp, Serge Monros and Craig Waldrop are being sued individually. Settlement discussions failed and Plaintiff's counsel began service of Process. The Company and Mr. Monros have hired Shustak and Partners to defend the claim. The defendants sued for breach of contract, fraud, vicarious liability, and unlawful sale by an unregistered broker. The lawsuit attempted to hold the Company and Mr. Monros responsible for alleged improprieties of Waldrop. The Company finalized a negotiated settlement and received court approval on April 7, 2015. The Company has recorded a $1,101,179 liability based on the settlement agreement. This consists of $100,000 cash payment for legal fees paid over a period of five months and net common shares to be issued of 296,050,421 valued at $1,001,179. The lawsuit has been settled and dismissed. |
7. Rescission Liability
7. Rescission Liability | 3 Months Ended |
Mar. 31, 2015 | |
Rescission Liability Details Narrative | |
Rescission Liability | The Company received a letter from the Securities and Exchange Commission, Los Angeles Regional Office, dated May 9, 2011. The letter informed us that the SEC had entered into a formal order of investigation into Savi Media Group, Inc. The letter included a Subpoena DucesTecum, meaning the Company was given a prescribed period of time to produce all requested documents and information contained in the subpoena. An index of the source of all such produced information and an authentication declaration were also to be supplied. The stated purpose of the investigation is a fact-finding inquiry to assist the SEC staff in determining if the Company has violated federal securities laws. The SEC states there is no implication of negativity or guilt at this stage of the investigation. The Company initially hired the Los Angeles law firm of Troy Gould to represent us in the matter of this investigation. As of the date of this filing, the Company believes it has provided all requested material to the SEC. Updates on the investigation will be supplied by supplemental filings hereto. Status of prior private investments; $0 in 2007 (although HDV sold $13,000 of its shares), $0 in 2008 (although HDV sold $445,750 of its shares), $0 in 2009 (although HDV sold $448,000 of its shares), $910,742 in 2010, $1,827,543 in 2011, and $629,500 in the first three quarters of 2012. There is concern that these private placement securities sales were not made in compliance with applicable law (lack of material disclosure and/or failure to file securities sales notices as required by federal law) and the Company may need to offer rescission rights to the investors. In 2006, the Company issued shares for services valued at $611,768. There were issued shares for services valued at $1,416,060 in 2007; shares for services valued at $14,625 in 2008, shares for services valued at $380,500 in 2009, shares for services valued at $236,920 in 2010, shares for services valued at $3,370,273 in 2011, and shares for services valued at $3,165,039 during the first 3 quarters of 2012. We have no plans to offer rescission for these share issuances. We offered rescission to many of the 2011 investors in late 2011 (2011 rescission offer). The legal sustainability of these rescission offers is also being looked at by Counsel. The results of our rescission offers, in terms of rescission offers accepted by shareholders, were very encouraging. We had five rescissions offers accepted and refunded $14,000 plus interest. Generally, we believe we have good relationships with our shareholders. Our plan is to offer rescission to most shareholders obtaining privately offered shares from us since January 1, 2007 through 2011. The Company has pledged to use our best efforts, in good faith, to honor any accepted rescission offer. However, there is no assurance that rescission offer acceptances will not have a material effect on our finances or that we will be able to re-pay those electing to rescind in a complete and timely manner. As of the date hereof, the Company has postponed their plans to offer rescission to earlier purchasing shareholders, deeming it advisable to wait until the common stock price increases and they have more operating cash available to pay for the cost of undertaking this endeavor. The Company has booked a liability to account for this rescission liability and marks the liability to market on a quarterly basis. The rescission liability as of March 31, 2015 is $489,349. |
8. Derivatives
8. Derivatives | 3 Months Ended |
Mar. 31, 2015 | |
Notes to Financial Statements | |
Derivatives | In connection with the sale of debt or equity instruments, the Company may sell options or warrants to purchase our common stock. In certain circumstances, these options or warrants may be classified as derivative liabilities, rather than as equity. Additionally, the debt or equity instruments may contain embedded derivative instruments, such as embedded derivative features which in certain circumstances may be required to be bifurcated from the associated host instrument and accounted for separately as a derivative instrument liability. The Company's derivative instrument liabilities are re-valued at the end of each reporting period, with changes in the fair value of the derivative liability recorded as charges or credits to income in the period in which the changes occur. For options, warrants and bifurcated embedded derivative features that are accounted for as derivative instrument liabilities, the Company estimates fair value using either quoted market prices of financial instruments with similar characteristics or other valuation techniques. The valuation techniques require assumptions related to the remaining term of the instruments and risk-free rates of return, our current common stock price and expected dividend yield, and the expected volatility of our common stock price over the life of the option. The following table summarizes the convertible debt and warrant liabilities derivative activity for the period December 31, 2013 to March 31, 2015: Description Convertible Notes Warrant Liabilities Total Fair value at December 31, 2013 $ 3,848,923 $ 1,382,612 $ 5,231,535 Change due to Issuances 79,623 265,489 345,112 Change due to Exercise/Conversion (385,035 ) (164,561 ) (549,596 ) Change in Fair Value 5,244,743 (1,232,733 ) 4,012,010 Fair value at December 31, 2014 $ 8,788,254 $ 250,807 $ 9,039,061 Change due to Issuances 1,512,818 1,512,818 Change in Fair Value 563,510 23,611 587,121 Fair value at March 31, 2015 $ 9,351,764 $ 1,787,236 $ 11,139,000 For the periods ended March 31, 2015 and March 31, 2014, net derivative loss was $2,099,940 and $820,913 respectively. The lattice methodology was used to value the convertible notes and warrants issued, with the following assumptions. Assumptions March 31, 2015 December 31, 2014 Dividend yield 0.00 % 0.00 % Risk-free rate for term 0.14-0.56 % 0.25%-0.67 % Volatility 154 % 151 % Maturity dates 0.74-2.41 years 0.99-2.41 years Stock Price 0.0036 0.0038 The Cornell warrants issued on July 24, 2011 (initial 25,000,000 warrants with an exercise price of $0.0119 and an expiration date of July 10, 2014 reset to 595,000,000 warrants at $0.0005 and again on January 30, 2013 to $0.0003 and the number of warrants increased to 991,666,667). During the period ending March 31, 2014, Cornell exercised 80,362,450 warrants on a cashless basis and were issued 71,433,289 shares. The remaining warrants expired on July 24, 2014. The HDV and DSE convertible notes matured on April 1, 2010 and are in default as of December 31, 2014 and March 31, 2015. During the period ending March 31, 2015, the Company issued 666,070,000 warrants to investors as part of their private placement. The warrants have an exercise price of $0.0004 and terms ranging from 4 months to one year. The warrants are treated as tainted derivative liabilities since the Company has insufficient common stock to share settle the warrants. The fair value of the derivative liability related to these warrants at issuance was valued at $1,512,818 was expensed as a change in fair value and booked as a derivative liability on the balance sheet. |
9. Convertible Debt
9. Convertible Debt | 3 Months Ended |
Mar. 31, 2015 | |
Debt Disclosure [Abstract] | |
Convertible Debt | DS Enterprises: On December 15, 2009, the Company converted accounts payable due to DS Enterprises, Inc. into a convertible promissory note. The note bears interest at 8%, matured on April 15, 2010, and converts into common shares at the conversion rate of $0.003 (reset to $0.000206) subject to anti-dilution protection. This note was in default as of March 31, 2015 due to lack of payment upon maturity. Gross accounts payable converted $ 526,094 Plus accrued interest 71,346 Net due $ 597,440 Following is an analysis of convertible debt due DS Enterprises at March 31, 2015 and December 31, 2014: March 31, 2015 December 31, 2014 Contractual balance, in default $ 511,440 $ 511,440 Less unamortized discount Convertible debt $ 511,440 $ 511,440 This note is considered a derivative instrument due to the anti-dilution protection related to the conversion feature. The Company recorded a derivative liability upon issuance on December 15, 2009 which resulted in the note discount ($597,440 at issuance) and a loss on modification recorded as interest expense in the amount of $344,157. The Company also recorded $79,945 in interest expense upon the conversion of accounts payable to notes payable. His Divine Vehicle - Related Party: On December 15, 2009, the Company converted $204,302 of accounts payable due to His Divine Vehicle, Inc. into a convertible promissory note. The note bears interest at 8%, matured on April 15, 2010, and converts into common shares at the conversion rate of $0.003 (reset to $0.000206) subject to anti-dilution protection. This note was in default as of March 31, 2015 due to lack of payment upon maturity. Following is an analysis of convertible debt - related party at March 31, 2015 and December 31, 2014: March 31, 2015 December 31, 2014 Contractual balance, in default $ 204,302 $ 204,302 Less unamortized discount Convertible debt $ 204,302 $ 204,302 This note is considered a derivative instrument due to the anti-dilution protection related to the conversion feature. The Company recorded a derivative liability upon issuance which resulted in the note discount ($204,302 at issuance) and a loss on modification recorded as interest expense in the amount of $131,967 in 2009. Steve Botkin: On July 17, 2012, the Company entered into a convertible promissory note with Steve Botkin. The note bears interest at 12%, matures on July 17, 2015 and converts into common shares at the conversion rate of 80% of market. On August 9, 2012, the Company entered into a convertible promissory note with Steve Botkin. The note bears interest at 12%, matures on August 9, 2015 and converts into common shares at the conversion rate of 80% of market. Following is an analysis of convertible debt due Steve Botkin at March 31, 2015 and December 31, 2014: March 31, 2015 December 31, 2014 Contractual balance $ $ Less unamortized discount Convertible debt $ $ This note is considered a derivative instrument due to the variable conversion feature. The Company recorded a derivative liability upon issuance which resulted in the note discount ($71,024 at issuance). A settlement agreement was reached with Botkin on April 8, 2013. The Company made a cash payment of $36,400, received 27,000,000 shares of common stock from Botkin, issued a note payable to Botkin for $67,600. In addition, Botkin waived $9,251 in accrued interest. The Company booked a $137,325 gain on settlement of this debt based on the common stock price and the fair value of the derivative liability on the date of settlement. The note was paid in full in August, 2014. |
10. Notes Payable
10. Notes Payable | 3 Months Ended |
Mar. 31, 2015 | |
Debt Disclosure [Abstract] | |
Notes Payable | In connection with the Herrera Settlement Agreement, the Company issued promissory notes to former officers who made payments on behalf of the Company. The Notes were issued on November 15, 2008, bear interest of 12% and are due in one year from the date of issuance. The total due as of March 31, 2015 and December 31, 2014 includes $10,778 due to former officers who made payments or waived fees as part of the Herrera Settlement Agreement and the $15,000 due to Mr. Monros and Mr. Sweeney recorded as related party debt to Mr. Monros and Mr. Sweeney. On March 25, 2014, the Company issued Chul Chung a promissory note in exchange for $20,000. The note matures on September 25, 2014 and bears interest at 12% per year. The Company issued 15,000 series A preferred shares as consideration for the loan. The shares were valued at $4,350 and are a debt discount amortized over the life of the note. The note is currently in default. On April 3, 2014, the Company issued John Fromberg a promissory note in exchange for $25,000. The note accrues interest at 22.9% per year. The note was paid in full during the third quarter of 2014. On June 12, 2014, the Company issued Carole Klove a promissory note in exchange for $20,000. The note matures on June 12, 2015 and bears interest of 12% per year. On September 4, 2014, the Company issued David Blanchard a promissory note in exchange for $50,000. The note matures on March 4, 2015 and bears interest at 15% per year. The Company issued 200,000 series A preferred shares as consideration for the loan. The shares issued were valued at $56,000 and were considered a debt discount. The Company booked $6,000 in interest expense upon origination and a $50,000 debt discount which was amortized over the life of the note. The note was converted to series B preferred stock on November 18, 2014. The Company booked a loss on conversion of $441,959. On July 17, 2014, the Company issued Cash Call, Inc. a promissory note in the amount of $35,000. The note matures on August 1, 2024 and bears interest at 94% per year. The note included a $3,500 origination fee. The note was paid in full on October 20, 2014. On November 14, 2014, the Company issued Cash Call, Inc. a promissory note in the amount of $50,000. The note matures on December 1, 2024 and bears interest at 94% per year. The note included a $2,500 origination fee. On March 5, 2015, the Company issued Ferreri a promissory note in the amount of $5,000. The note does not bear interest and is due on demand. |
11. Income Taxes
11. Income Taxes | 3 Months Ended |
Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | The Company files a U.S. Federal income tax return. The components of the net loss before income tax benefit for the periods ended March 31, 2015 and December 31, 2014 are as follows: March 31, 2015 December 31, 2014 Net income/(loss) before income taxes $ (2,887,433 ) $ (9,494,263 ) The components of the Company's deferred tax assets at March 31, 2015 and December 31, 2014 are as follows: March 31, 2015 December 31, 2014 Deferred tax assets Liabilities Loss carry-forwards $ 5,060,271 $ 4,854,603 Valuation allowance (5,060,271 ) (4,854,603 ) $ $ At March 31, 2015, the Company had generated US net operating loss carry-forwards of approximately $14,883,150 which will expire in various years between 2013 and 2030. The benefit from utilization of net operating loss carry forwards incurred prior to December 30, 2004 is significantly limited in connection with a change in control of the Company. Such benefit could be subject to further limitations if significant future ownership changes occur in the Company. The Company believes that a significant portion of its unused net operating loss carry forwards will never be utilized due to expiration or limitations on use due to ownership changes. At March 31, 2015 and December 31, 2014, the Company has no uncertain tax positions. |
12. Commitments and Contingenci
12. Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Legal Proceedings From time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. The Company received a letter from the Securities and Exchange Commission, Los Angeles Regional Office, dated May 9, 2011. The letter informed us that the SEC had entered into a formal order of investigation into Savi Media Group, Inc. The letter included a Subpoena Duces Tecum, meaning the Company was given a prescribed period of time to produce all requested documents and information contained in the subpoena. An index of the source of all such produced information and an authentication declaration were also to be supplied. The stated purpose of the investigation is a fact-finding inquiry to assist the SEC staff in determining if the Company has violated federal securities laws. The SEC states there is no implication of negativity or guilt at this stage of the investigation. The Company initially hired the Los Angeles law firm of Troy Gould to represent us in the matter of this investigation. As of the date of this filing, the Company believes it has provided all requested material to the SEC. Updates on the investigation will be supplied by supplemental filings hereto. Status of prior private investments; $0 in 2007 (although HDV sold $13,000 of its shares), $0 in 2008 (although HDV sold $445,750 of its shares), $0 in 2009 (although HDV sold $448,000 of its shares), $910,742 in 2010, $1,827,543 in 2011, and $629,500 in the first three quarters of 2012. There is concern that these private placement securities sales were not made in compliance with applicable law (lack of material disclosure and/or failure to file securities sales notices as required by federal law) and the Company may need to offer rescission rights to the investors. In 2006, the Company issued shares for services valued at $611,768. There were issued shares for services valued at $1,416,060 in 2007; shares for services valued at $14,625 in 2008, shares for services valued at $380,500 in 2009, shares for services valued at $236,920 in 2010, shares for services valued at $3,370,273 in 2011, and shares for services valued at $3,165,039 during the first 3 quarters of 2012. We have no plans to offer rescission for these share issuances. We offered rescission to many of the 2011 investors in late 2011 (2011 rescission offer). The legal sustainability of these rescission offers is also being looked at by Counsel. The results of our rescission offers, in terms of rescission offers accepted by shareholders, were very encouraging. We had five rescissions offers accepted and refunded $14,000 plus interest. Generally, we believe we have good relationships with our shareholders. Our plan is to offer rescission to most shareholders obtaining privately offered shares from us since January 1, 2007 through 2011. The Company has pledged to use our best efforts, in good faith, to honor any accepted rescission offer. However, there is no assurance that rescission offer acceptances will not have a material effect on our finances or that we will be able to re-pay those electing to rescind in a complete and timely manner. As of the date hereof, the Company has postponed their plans to offer rescission to earlier purchasing shareholders, deeming it advisable to wait until the common stock price increases and they have more operating cash available to pay for the cost of undertaking this endeavor. The Company has booked a liability to account for this rescission liability and marks the liability to market on a quarterly basis. The rescission liability as of March 31, 2015 is $489,349. The Company received a letter dated June 7, 2013 with a Civil Complaint titled Arnold Lamarr Weese, et al v. SaviCorp filed in the Northern District of West Virginia. In addition to SaviCorp, Serge Monros and Craig Waldrop are being sued individually. Settlement discussions failed and Plaintiff's counsel began service of Process. The Company and Mr. Monros have hired Shustak and Partners to defend the claim. The defendants sued for breach of contract, fraud, vicarious liability, and unlawful sale by an unregistered broker. The lawsuit attempted to hold the Company and Mr. Monros responsible for alleged improprieties of Waldrop. The Company finalized a negotiated settlement and received court approval on April 7, 2015. As of March 31, 2015, the Company has recorded a $1,101,179 liability based on the settlement agreement. This consists of $100,000 cash payment for legal fees paid over a period of five months and net common shares to be issued of 296,050,421 valued at $1,001,179. The lawsuit has been settled and dismissed. The Company received an Order of Suspension of Trading on June 17, 2015 from the Security and Exchange Commission. The SEC indicated that there is a lack of current and accurate information concerning the securities of the Company and therefore ordered that trading in the securities of the Company be suspended from June 17, 2015 through June 30, 2015. Lease Commitments The Company is currently leasing office space and adjacent research and development space on an annual basis from CEE, LLC, for $110,000 per year. |
13. Stockholders' Equity
13. Stockholders' Equity | 3 Months Ended |
Mar. 31, 2015 | |
Equity [Abstract] | |
Stockholders' Equity | Common Stock Following is a description of transactions affecting common stock for the year ended December 31, 2014 and the three months ended March 31, 2015. Year Ended December 31, 2014 In March 2014, 71,433,289 shares were issued upon the cashless exercise of 80,362,450 warrants. Throughout the year, the Board of Directors also authorized the issuance of 500,000 common shares for services rendered by independent contractors. These issuances were valued based on the market value of the stock totaling $1,050. Throughout the year, 70,000,000 common shares were converted to 700,000 Preferred A shares. Throughout the year, 300,000 Preferred C shares were converted to 30,000,000 common shares. There was no gain or loss on this transaction. Throughout the year, 20,000,000 common shares were bought back for $17,000. Period Ended March 31, 2015 Throughout the period, 120,000 Preferred A shares and 2,500 Preferred C shares were converted to 12,250,000 common shares. There was no gain or loss on this transaction. Stock Options Gene-Cell, Inc., the company, used in the recapitalization (See Note 1) periodically issued incentive stock options to key employees, officers, and directors to provide additional incentives to promote the success of the Company's business and to enhance the ability to attract and retain the services of qualified persons. The Board of Directors approved the issuance of all stock options. The exercise price of an option granted was determined by the fair market value of the stock on the date of grant. Reverse stock splits by the Company resulted in the reduction of outstanding options to less than 85 shares with exercise prices that are so high that the exercise of the options will never be practical. Expiration dates ranged from March, 2012 through July, 2012. There are no stock options outstanding as of March 31, 2015. Incentive Stock Plan During the year ended December 31, 2005 the 2005 Incentive Stock Plan was adopted by the Companys Board of Directors and approved by the stockholders in August 2005. The 2005 Plan provides for the issuance of up to 25,000,000 shares and/or options. The primary purpose of the 2005 Incentive Stock Plan is to attract and retain the best available personnel for us in order to promote the success of our business and to facilitate the ownership of our stock by employees. The 2005 Incentive Stock Plan is administered by our Board of Directors. Under the 2005 Incentive Stock Plan, key employees, officers, directors and consultants are entitled to receive awards. The 2005 Incentive Stock Plan permits the granting of incentive stock options, non-qualified stock options and shares of common stock with the purchase price, vesting and expiration terms set by the Board of Directors. No options have been issued under the Plan as of March 31, 2015. Stock Warrants In connection with the a repayment agreement, we agreed to issue to YA Global warrants to purchase an aggregate of 25,000,000 shares of common stock, exercisable for a period of three years at an exercise price of $0.0119. The warrants issued to YA Global provide for certain anti-dilution protection in the event that (i) we issue shares of our common stock for a purchase price below the exercise price of the various warrants or in the event we issue options or other convertible securities with a conversion price below the exercise price, (ii) we effectuate a stock split, stock dividend or other form of recapitalization, or (iii) we declare a dividend payment to the holders of our common stock. The exercise price was reset on August 8, 2011 to $0.0005 and the number of warrants increased to 595,000,000. The exercise price was reset on January 30, 2013 to $0.0003 and the number of warrants increased to 991,666,667. The holder exercised 80,362,450 warrants on a cashless basis and were issued 71,433,289 shares of common stock. The remaining warrants expired on July 24, 2014. The Company issued 5,000,000 warrants in May 2010 to a law firm for services rendered valued at $137,000 using a Black-Scholes-Merton model using the following inputs (0.0% dividend yield, stock price of $0.0274, risk-free rate of 2.43%, volatility of 417%, 5 year remaining term). The warrants expire in five years with an exercise price of $0.01. The Company issued 666,667 warrants in April 2012 to a law firm for services rendered valued at $770 using a lattice model using the following inputs (0.0% dividend yield, stock price of $0.009, risk-free rate of 0.53%, volatility of 139%, 2.5 year remaining term). The warrants expire in thirty months with an exercise price of $0.015. In May 2013 as part of the DynoGreen Tech licensing agreement for the Middle East, the Company issued 400,000,000 warrants at an exercise price of $0.001 if exercised within 30 days and an exercise price of $0.002 if exercised within 60 days. All these warrants were exercised within 30 days. In December, 2014 as part of a private placement, the Company issued 125,000,000 warrants to an investor at an exercise price of $0.0004. The warrants expire on December 29, 2015. The warrants are a tainted derivative liability and were valued using a lattice model with the following inputs (0.0% dividend yield, stock price of $0.0036, risk-free rate of 0.25%, volatility of 151%, 1 year term). In February, 2015 as part of a private placement, the Company issued 250,000,000 warrants to an investor at an exercise price of $0.0004. The warrants expire on June 1, 2015. The warrants are a tainted derivative liability and were valued using a lattice model with the following inputs (0.0% dividend yield, stock price of $0.0033, risk-free rate of 0.07%, volatility of 152%, .33 year term). In March, 2014 as part of a several private placements, the Company issued 353,570,000 warrants to investors at an exercise price of $0.0004. The warrants expire in March 2016. The warrants are a tainted derivative liability and were valued using a lattice model with the following inputs (0.0% dividend yield, stock price of $0.0036-$0.0045, risk-free rate of 0.24-0.27%, volatility of 154%, 1 year term). For the period ending March 31, 2015, the fair value of the derivative liability related to the tainted warrants at issuance was valued at $1,512,819 and was expensed as a change in fair value and booked as a derivative liability on the balance sheet. As of March 31, 2015 the following warrants remain outstanding: Remaining Number of Exercise Life Warrants Price Years 728,570,000 $ 0.0004 0.17-0.98 5,000,000 0.0100 0.08 733,570,000 $ 0.0005 Preferred Stock During the year ended December 31, 2005, the Company set preferences for its Series A, B and C preferred stock. The Company is authorized to issue 40,000,000 shares of preferred stock, $0.001 par value per share. At December 31, 2013 the Company had 12,963,477 shares of series A preferred stock issued and outstanding and 8,755,697 shares of series C preferred stock issued and outstanding. The Companys preferred stock may be issued in series, and shall have such voting powers, full or limited, or no voting powers, and such designations, preferences and relative participating, optional or other special rights, and qualifications, limitations or restrictions thereof, as shall be stated and expressed in the resolution or resolutions providing for the issuance of such stock adopted from time to time by the board of directors. The Series A and Series C preferred stock provides for conversion on the basis of 100 shares of common stock for each share of preferred stock converted, with conversion at the option of the holder or mandatory conversion upon restructure of the common stock and holders of the series A preferred stock vote their shares on an as-converted basis. Holders of the series A preferred stock participates on distribution and liquidation on an equal basis with the holders of common stock. The series B preferred stock provides for conversion on the basis of 10,000 shares of common stock for each share of preferred stock converted, with conversion at the option of the holder or mandatory conversion upon restructure of the common stock and holders of the series A preferred stock vote their shares on an as-converted basis. Holders of the series B preferred stock participates on distribution and liquidation on an equal basis with the holders of common stock. Following is a description of transactions affecting preferred stock for the year ended December 31, 2014 and the three months ended March 31, 2015. Year Ended December 31, 2014 In January 2014, the Board of Directors authorized the issuance of 1,703,333 Preferred A shares to accredited and non-accredited investors for total proceeds of $95,000. In February 2014, the Board of Directors authorized the issuance of 2,850,000 Preferred A shares to accredited and non-accredited investors for total proceeds of $150,000. In March 2014, the Board of Directors authorized the issuance of 200,000 Preferred A shares to accredited and non-accredited investors for total proceeds of $10,000. In April 2014, the Board of Directors authorized the issuance of 4,916,666 Preferred A shares to accredited and non-accredited investors for total proceeds of $187,500. In May 2014, the Board of Directors authorized the issuance of 300,000 Preferred A shares and 6,250 Preferred B shares to accredited and non-accredited investors for total proceeds of $40,000. In June 2014, the Board of Directors authorized the issuance of 6,667 Preferred A shares to accredited and non-accredited investors for total proceeds of $1,000. In July 2014, the Board of Directors authorized the issuance of 250,000 Preferred A shares to accredited and non-accredited investors for total proceeds of $25,000. In August 2014, the Board of Directors authorized the issuance of 25,000 Preferred B shares to accredited and non-accredited investors for total proceeds of $100,000. In September 2014, the Board of Directors authorized the issuance of 1,975,000 Preferred A shares and 45,056 Preferred B shares to accredited and non-accredited investors for total proceeds of $305,000. In October 2014, the Board of Directors authorized the issuance of 100,000 Preferred A shares and 36,500 Preferred B shares to accredited and non-accredited investors for total proceeds of $175,000. In November 2014, the Board of Directors authorized the issuance of 25,000 Preferred B shares to accredited and non-accredited investors for total proceeds of $100,000. In December 2014, the Board of Directors authorized the issuance of 22,040 Preferred B shares to accredited and non-accredited investors for total proceeds of $81,000. Throughout the year, 70,000,000 common shares were converted to 700,000 Preferred A shares. There was no gain or loss on these transactions. Throughout the year, 300,000 Preferred C shares were converted to 30,000,000 common shares. There was no gain or loss on these transactions. Throughout the year, 215,000 Preferred A shares, valued at $60,350, were issued to lenders as consideration for issuing debt to the Company. The shares were valued based on the closing market price on the date of grant. Throughout the year, 19,806 Preferred B shares were issued to lenders upon conversion of $77,919 in debt, $1,452 in accrued interest and the related derivative liability of $385,035. A loss of $441,959 was recorded on these transactions. Throughout the year, the Board of Directors also authorized the issuance of 1,700,000 Preferred A shares and 94,950 Preferred B shares for services rendered by independent contractors. These issuances were valued based on the market value of the stock totaling $3,495,100. Period Ended March 31, 2015 In January 2015, the Board of Directors authorized the issuance of 27,500 Preferred B shares to accredited and non-accredited investors for total proceeds of $110,000. In February 2015, the Board of Directors authorized the issuance of 31,250 Preferred B shares to accredited and non-accredited investors for total proceeds of $125,000. In March 2015, the Board of Directors authorized the issuance of 74,607 Preferred B shares to accredited and non-accredited investors for total proceeds of $300,000. Of the $300,000, $135,000 was received after the period end and shows as a subscription receivable as March 31, 2015. Throughout the period, 120,000 Preferred A shares and 2,500 Preferred C shares were converted to 12,250,000 common shares. There was no gain or loss on these transactions. Throughout the period, the Board of Directors also authorized the issuance of 3,750 Preferred B shares for services rendered by independent contractors. These issuances were valued based on the market value of the stock totaling $138,000. Potentially Dilutive Equity Instruments An analysis of potentially dilutive equity instruments at March 31, 2015 Series A Preferred Stock convertible to common stock on a 100 for 1 basis 2,776,014,300 Series B Preferred Stock convertible to common stock on a 10,000 for 1 basis 4,117,090,000 Series C Preferred Stock convertible to common stock on a 100 for 1 basis 845,319,700 Total 7,738,424,000 |
14. Related Party Transactions
14. Related Party Transactions | 3 Months Ended |
Mar. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | The Company engaged in various related party transactions involving the issuance of shares of the Company's common stock during the periods ended March 31, 2015 and December 31, 2014. During 2007, 2008, 2009, 2010 and 2011 His Divine Vehicle, Inc. ("HDV") incurred costs on behalf of the Company. At December 31, 2014, the Company owed Serge Monros $929,249 in accrued wages. At March 31, 2015, the Company owed Serge Monros $924,646 in accrued wages. HDV, an affiliate of Mr. Monros, manufactures the DynoValve and DynoValve Pro products and then sells them to the Company for resale pursuant to the Product Licensing Agreement entered into on November 15, 2008. As consideration for HDV entering into the Product Licensing Agreement, the Company agreed to issue to Mr. Monros and HDV, if and when available, an aggregate of 500 Million shares of Common Stock, 5 Million shares of Series A Preferred Stock and 5 Million shares of Series C Preferred Stock. HDV loaned 1,000,000 Preferred A shares to the Company in 2008. As additional consideration for the Licensing Agreement, HDV waived $332,786 owed to it by the company and Mr. Monros waived $306,000 in accrued wages. The excess value of the shares issued (common and preferred) over the debt waived was expensed to research and development. In July, 2011, the stock consideration paid for the licensing agreement was modified to increase the common shares by 100,000,000, increase the Series A Preferred Stock by 1,500,000 and reduce the Series C Preferred Stock by 2,500,000. On December 15, 2009, the Company converted $204,302 of accounts payable due to His Divine Vehicle, Inc. into a convertible promissory note. The note bears interest at 8%, matured on April 15, 2010, and converts into common shares at the conversion rate of $0.003 (reset to $0.000206) subject to anti-dilution protection. The note matured and is currently in default due to lack of payment at maturity. The principal balance at December 31, 2014 and March 31, 2015 is $204,302. In August, 2011 His Divine Vehicle loaned 2,000,000 Preferred C shares and the 200,000,000 common shares to the Company. In January, 2013, His Divine Vehicle loaned 196,000,000 common shares, 3,491,423 Preferred A shares and 202,412 Preferred C shares to the Company. In March, 2013, the Company entered into a five (5) year Master Distribution Agreement with His Divine Vehicle to sell the DynoValve and DynoValve Pro in various international territories. The consideration for the agreement was guaranteeing a minimum annual volume, payment for the DynoValves acquired and a three percent (3%) royalty payment. The Company is currently in default on this agreement. As part of this agreement, the Company acquires inventory from His Divine Vehicle. The Company acquired no inventory during the three months ended March 31, 2015 and $232,594 of inventory for the year ended December 31, 2014. |
15. Non-Cash Investing and Fina
15. Non-Cash Investing and Financing Transactions and Supplemental Disclosure of Cash Flow Information | 3 Months Ended |
Mar. 31, 2015 | |
Supplemental Cash Flow Elements [Abstract] | |
Non-Cash Investing and Financing Transactions and Supplemental Disclosure of Cash Flow Information | During the periods ended March 31, 2015 and March 31, 2014, the Company engaged in various non-cash investing and financing activities as follows: 2015 2014 Settlement of Convertible Debt and Derivative Liabilities with common stock $ $ 164,561 Conversion of Preferred Stock into Common Stock $ 12,250 $ 70,000 Stock Issued with Debt $ $ 4,350 Preferred Stock Loaned/Common Stock Issued for Stock Payable $ $ 565,384 During the periods ended March 31, 2015 and March 31, 2014, the Company made $8,333 and $0 interest payments and no income tax payments. |
16. Fair Value of Financial Ins
16. Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | The Companys financial instruments consist of cash and cash equivalents, accounts payable, accrued liabilities and convertible debt. The estimated fair value of cash, accounts payable and accrued liabilities approximate their carrying amounts due to the short-term nature of these instruments. The Company utilizes various types of financing to fund its business needs, including convertible debt with warrants attached. The Company reviews its warrants and conversion features of securities issued as to whether they are freestanding or contain an embedded derivative and, if so, whether they are classified as a liability at each reporting period until the amount is settled and reclassified into equity with changes in fair value recognized in current earnings. At December 31, 2014 and March 31, 2015, the Company had convertible debt and warrants to purchase common stock, the fair values of which are classified as a liability. Some of these units have embedded conversion features that are treated as a discount on the notes. Such financial instruments are initially recorded at fair value and amortized to interest expense over the life of the debt using the effective interest method. Inputs used in the valuation to derive fair value are classified based on a fair value hierarchy which distinguishes between assumptions based on market data (observable inputs) and an entitys own assumptions (unobservable inputs). The hierarchy consists of three levels: Level one Quoted market prices in active markets for identical assets or liabilities; Level two Inputs other than level one inputs that are either directly or indirectly observable; and Level three Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter. The Companys derivative liability is measured at fair value on a recurring basis. The Company classifies the fair value of these convertible notes and warrants derivative liability under level three. The Companys settlement payable is measured at fair value on a recurring basis based on the most recent settlement offer. The Company classifies the fair value of the settlement payable under level three. The Companys rescission liability is measured at fair value on a recurring basis based on the most recent stock price. The Company classifies the fair value of the rescission liability under level one. Based on ASC Topic 815 and related guidance, the Company concluded the convertible notes and common stock purchase warrants are required to be accounted for as derivatives as of the issue date due to a reset feature on the conversion/exercise price. At the date of issuance the convertible subordinated financing, warrant derivative liabilities were measured at fair value using either quoted market prices of financial instruments with similar characteristics or other valuation techniques. The Company records the fair value of these derivatives on its balance sheet at fair value with changes in the values of these derivatives reflected in the consolidated statements of operations as Gain (loss) on derivative liabilities. These derivative instruments are not designated as hedging instruments under ASC 815-10 and are disclosed on the balance sheet under Derivative Liabilities. The following table presents liabilities that are measured and recognized at fair value as of March 31, 2015 on a recurring and non-recurring basis: Description Level 1 Level 2 Level 3 Gains (Losses) Derivatives $ $ $ 11,139,000 $ (2,099,940 ) Settlements Payable 1,101,179 Rescission Liability 489,349 (44,516 ) Fair Value at March 31, 2015 $ $ 1,590,528 $ 11,139,000 $ (2,144,456 ) The following table presents liabilities that are measured and recognized at fair value as of December 31, 2014 on a recurring and non-recurring basis: Description Level 1 Level 2 Level 3 Gains (Losses) Derivatives $ $ $ 9,039,061 $ (820,913 ) Settlements Payable 1,101,179 (1,101,179 ) Rescission Liability 444,833 (444,833 ) Fair Value at December 31, 2014 $ $ 1,546,012 $ 9,039,061 $ (2,366,925 ) |
17. Subsequent Events
17. Subsequent Events | 3 Months Ended |
Mar. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Stock Issuances Since March 31, 2015, the Board of Directors authorized the issuance of an aggregate of 38,857 shares of its Preferred B shares to accredited and non-accredited investors for total proceeds of $160,000. In addition, the Board of Directors has authorized the issuance of an aggregate of 43,750 shares of its Preferred B shares to accredited and non-accredited investors for services rendered valued at an aggregate of $1,662,500. In addition, the Board of Directors has authorized a net aggregate of 286,050,421 common shares in settlement of the Weese lawsuit. No sales commissions were paid in connection with these issuances and all investors reviewed or had access to all of the Companys filing pursuant to the Securities Exchange Act of 1934, as amended. Legal Proceedings The Company received a letter from the Securities and Exchange Commission, Los Angeles Regional Office, dated May 9, 2011. The letter informed us that the SEC had entered into a formal order of investigation into Savi Media Group, Inc. The letter included a Subpoena DucesTecum, meaning the Company was given a prescribed period of time to produce all requested documents and information contained in the subpoena. An index of the source of all such produced information and an authentication declaration were also to be supplied. The stated purpose of the investigation is a fact-finding inquiry to assist the SEC staff in determining if the Company has violated federal securities laws. The SEC states there is no implication of negativity or guilt at this stage of the investigation. We hired the Los Angeles law firm of Troy Gould to represent us in the matter of this investigation. As of the date of this filing, we believe we have provided all requested material to the SEC. Status of prior private investments; $0 in 2007 (although HDV sold $13,000 of its shares), $0 in 2008 (although HDV sold $445,750 of its shares), $0 in 2009 (although HDV sold $448,000 of its shares), $910,742 in 2010, $1,827,543 in 2011. There is concern that these private placement securities sales were not made in compliance with applicable law (lack of material disclosure and/or failure to file securities sales notices as required by federal law) and the Company may need to offer rescission rights to the investors. In 2006, the Company issued shares for services valued at $611,768. There were issued shares for services valued at $1,416,060 in 2007; shares for services valued at $14,625 in 2008, shares for services valued at $380,500 in 2009, shares for services valued at $236,920 in 2010, and shares for services valued at $3,370,273 in 2011. We have no plans to offer rescission for these share issuances. We offered rescission to many of the 2011 investors in late 2011 (2011 rescission offer). The legal sustainability of these rescission offers is also being looked at by Counsel. The results of our rescission offers, in terms of rescission offers accepted by shareholders, were very encouraging. We had five rescissions offers accepted and refunded $14,000 plus interest. Generally, we believe we have good relationships with our shareholders. Our plan is to offer rescission to most shareholders obtaining privately offered shares from us since January 1, 2007 through 2011. The Company has pledged to use our best efforts, in good faith, to honor any accepted rescission offer. However, there is no assurance that rescission offer acceptances will not have a material effect on our finances or that we will be able to re-pay those electing to rescind in a complete and timely manner. As of the date hereof, the Company has postponed their plans to offer rescission to earlier purchasing shareholders, deeming it advisable to wait until the common stock price increases and they have more operating cash available to pay for the cost of undertaking this endeavor. The Company has booked a liability to account for this rescission liability and marks the liability to market on a quarterly basis. The rescission liability as of March 31, 2015 is $489,349. The Company received a letter dated June 7, 2013 with a Civil Complaint titled Arnold Lamarr Weese, et al v. SaviCorp filed in the Northern District of West Virginia. In addition to SaviCorp, Serge Monros and Craig Waldrop are being sued individually. Settlement discussions failed and Plaintiff's counsel began service of Process. The Company and Mr. Monros have hired Shustak and Partners to defend the claim. The defendants sued for breach of contract, fraud, vicarious liability, and unlawful sale by an unregistered broker. The lawsuit attempted to hold the Company and Mr. Monros responsible for alleged improprieties of Waldrop. The Company finalized a negotiated settlement and received court approval on April 7, 2015. The Company has recorded a $1,101,179 liability based on the settlement agreement. This consists of $100,000 cash payment for legal fees paid over a period of five months and net common shares to be issued of 296,050,421 valued at $1,001,179. The lawsuit has been settled and dismissed. The Company received an Order of Suspension of Trading on June 17, 2015 from the Security and Exchange Commission. The SEC indicated that there is a lack of current and accurate information concerning the securities of the Company and therefore ordered that trading in the securities of the Company be suspended from June 17, 2015 through June 30, 2015. Licensing Events Mr. Monros has continued the process of preparing patent applications for the other versions of the DynoValve products & related IP. In March, 2013, the Company entered into a five (5) year Master Distribution Agreement with His Divine Vehicle to sell the DynoValve and DynoValve Pro in various international territories. The consideration for the agreement was guaranteeing a minimum annual volume, payment for the DynoValves acquired and a three percent (3%) royalty payment. The Company is currently in default on this agreement. In March, 2015, the Company entered into a seven (7) year Master Distribution Agreement with Dynovalve Mfg, LLC, the holder of the patents for the DynoValve products and related IP. The agreement is an exclusive agreement for North America, China, Korea and the Middle East and a non-exclusive license worldwide. The consideration for the agreement was payment for products acquired and a three percent (3%) royalty payment. |
1. Organization and Significa24
1. Organization and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid short-term investments with an original maturity of three months or less when purchased, to be cash equivalents. The Company had cash equivalents of $23,863 as of March 31, 2015 and $32,373 as of December 31, 2014. |
Concentration of Credit Risk | Concentration of Credit Risk Cash and cash equivalents are the primary financial instruments that subject the Company to concentrations of credit risk. The Company maintains its cash deposits with major financial institutions selected based upon managements assessment of the financial stability. Balances periodically exceed the $100,000 federal depository insurance limit; however, the Company has not experienced any losses on deposits. |
Inventory | Inventory Inventories are stated at the lower of cost, computed using the first-in, first-out method, or market. If the cost of the inventories exceeds their market value, provisions are made currently for the difference between the cost and the market value. |
Furniture and Equipment | Furniture and Equipment Furniture and equipment is recorded at cost. The cost and related accumulated depreciation of assets sold, retired or otherwise disposed of are removed from the respective accounts, and any resulting gains or losses are included in the results of operations. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Repairs and maintenance costs are expensed as incurred. |
Income Taxes | Income Taxes The Company uses the liability method of accounting for income taxes. Under this method, deferred income taxes are recorded to reflect the tax consequences on future years of temporary differences between the tax basis of assets and liabilities and their financial amounts at year-end. The Company provides a valuation allowance to reduce deferred tax assets to their net realizable value. |
Stock-Based Compensation | Stock-Based Compensation The Company adopted FASB guidance on stock based compensation on January 1, 2006. Under FASB ASC 718-10-30-2, all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. Stock and stock options issued for services and compensation totaled $138,000 and $406,050 for the periods ended March 31, 2015 and March 31, 2014, respectively. |
Valuation of Derivatives | Valuation of Derivatives The Company evaluates its convertible instruments, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC Topic 815, Derivatives and Hedging. The result of this accounting treatment is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income (expense). Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815 are reclassified to liabilities at the fair value of the instrument on the reclassification date. We analyzed the derivative financial instruments (the Convertible Notes), in accordance with ASC 815. The objective is to provide guidance for determining whether an equity-linked financial instrument is indexed to an entitys own stock. This determination is needed for a scope exception which would enable a derivative instrument to be accounted for under the accrual method. The classification of a non-derivative instrument that falls within the scope of ASC 815-40-05 Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Companys Own Stock also hinges on whether the instrument is indexed to an entitys own stock. A non-derivative instrument that is not indexed to an entitys own stock cannot be classified as equity and must be accounted for as a liability. There is a two-step approach in determining whether an instrument or embedded feature is indexed to an entitys own stock. First, the instrument's contingent exercise provisions, if any, must be evaluated, followed by an evaluation of the instrument's settlement provisions. The Company utilized multinomial lattice models that value the derivative liability within the notes based on a probability weighted discounted cash flow model. The Company utilized the fair value standard set forth by the Financial Accounting Standards Board, defined as the amount at which the assets (or liability) could be bought (or incurred) or sold (or settled) in a current transaction between willing parties, that is, other than in a forced or liquidation sale. The derivative liabilities result in a reduction of the initial carrying amount (as unamortized discount) of the Convertible Notes. This derivative liability is marked-to-market each quarter with the change in fair value recorded in the income statement. Unamortized discount is amortized to interest expense using the effective interest method over the life of the Convertible Note. If the Note is converted or the warrants are exercised, the derivative liability is released and recorded as additional paid in capital. |
Profit/Loss Per Share | Profit/Loss Per Share Basic and diluted net profit or loss per share is computed on the basis of the weighted average number of shares of common stock outstanding during each period. See Note 11 for a discussion of potentially dilutive instruments. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company includes fair value information in the notes to financial statements when the fair value of its financial instruments is different from the book value. When the book value approximates fair value, no additional disclosure is made. |
New Accounting Pronouncements | New Accounting Pronouncements Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period In June 2014, the FASB issued an accounting standard which provides new guidance that requires share-based compensation to meet a specific performance target to be achieved in order for employees to become eligible to vest in the awards and that could be achieved after an employee completes the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation costs should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. This new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in this Update either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of ASU 2014-12 is not expected to have a material impact on our financial position or results of operations. Pushdown Accounting In November 2014, the FASB issued guidance to provide an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. After the effective date, an acquired entity can make an election to apply the guidance to future change-in-control events or to its most recent change-in-control event. However, if the financial statements for the period in which the most recent change-in-control event occurred already have been issued or made available to be issued, the application of this guidance would be a change in accounting principle. The amendments in this Update are effective on November 18, 2014. The adoption of ASU 2014-17 is not expected to have a material impact on our financial position or results of operations. We have adopted recently issued accounting pronouncements and have determined that they have no material effect on our financial position, results of operations, or cash flow. We do not expect any recently issued but not yet adopted accounting pronouncements to have a material effect on our financial position, results of operations or cash flow. |
3. Accounts Payable and Accru25
3. Accounts Payable and Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2015 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued liabilities | March 31, 2015 December 31, 2014 Trade accounts payable $ 1,231,264 $ 1,110,576 Accrued wages payable 1,569,434 1,541,309 Accrued interest expense 340,279 324,913 $ 3,140,977 $ 2,976,798 |
8. Derivatives (Tables)
8. Derivatives (Tables) | 3 Months Ended |
Mar. 31, 2015 | |
Notes to Financial Statements | |
Summary of convertible debt and warrant liabilities | Description Convertible Notes Warrant Liabilities Total Fair value at December 31, 2013 $ 3,848,923 $ 1,382,612 $ 5,231,535 Change due to Issuances 79,623 265,489 345,112 Change due to Exercise/Conversion (385,035 ) (164,561 ) (549,596 ) Change in Fair Value 5,244,743 (1,232,733 ) 4,012,010 Fair value at December 31, 2014 $ 8,788,254 $ 250,807 $ 9,039,061 Change due to Issuances 1,512,818 1,512,818 Change in Fair Value 563,510 23,611 587,121 Fair value at March 31, 2015 $ 9,351,764 $ 1,787,236 $ 11,139,000 |
Assumptions | Assumptions March 31, 2015 December 31, 2014 Dividend yield 0.00 % 0.00 % Risk-free rate for term 0.14-0.56 % 0.25%-0.67 % Volatility 154 % 151 % Maturity dates 0.74-2.41 years 0.99-2.41 years Stock Price 0.0036 0.0038 |
9. Convertible Debt (Tables)
9. Convertible Debt (Tables) | 3 Months Ended |
Mar. 31, 2015 | |
DS Enterprises [Member] | |
Schedule of convertible debt | March 31, 2015 December 31, 2014 Contractual balance, in default $ 511,440 $ 511,440 Less unamortized discount Convertible debt $ 511,440 $ 511,440 |
Schedule of accounts payable converted | Gross accounts payable converted $ 526,094 Plus accrued interest 71,346 Net due $ 597,440 |
His Devine Vehicle [Member] | |
Schedule of convertible debt | March 31, 2015 December 31, 2014 Contractual balance, in default $ 204,302 $ 204,302 Less unamortized discount Convertible debt $ 204,302 $ 204,302 |
Steve Botkin | |
Schedule of convertible debt | March 31, 2015 December 31, 2014 Contractual balance $ $ Less unamortized discount Convertible debt $ $ |
11. Income Taxes (Tables)
11. Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Components of net loss | March 31, 2015 December 31, 2014 Net income/(loss) before income taxes $ (2,887,433 ) $ (9,494,263 ) |
Schedule of deferred tax assets | March 31, 2015 December 31, 2014 Deferred tax assets Liabilities Loss carry-forwards $ 5,060,271 $ 4,854,603 Valuation allowance (5,060,271 ) (4,854,603 ) $ $ |
13. Stockholders' Equity (Table
13. Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2015 | |
Equity [Abstract] | |
Schedule of warrants | Remaining Number of Exercise Life Warrants Price Years 728,570,000 $ 0.0004 0.17-0.98 5,000,000 0.0100 0.08 733,570,000 $ 0.0005 |
Potentially dilutive equity | Series A Preferred Stock convertible to common stock on a 100 for 1 basis 2,776,014,300 Series B Preferred Stock convertible to common stock on a 10,000 for 1 basis 4,117,090,000 Series C Preferred Stock convertible to common stock on a 100 for 1 basis 845,319,700 Total 7,738,424,000 |
15. Non-Cash Investing and Fi30
15. Non-Cash Investing and Financing Transactions and Supplemental Disclosure of Cash Flow Information (Tables) | 3 Months Ended |
Mar. 31, 2015 | |
Supplemental Cash Flow Elements [Abstract] | |
Non-cash investing and financing activities | 2015 2014 Settlement of Convertible Debt and Derivative Liabilities with common stock $ $ 164,561 Conversion of Preferred Stock into Common Stock $ 12,250 $ 70,000 Stock Issued with Debt $ $ 4,350 Preferred Stock Loaned/Common Stock Issued for Stock Payable $ $ 565,384 |
16. Fair Value of Financial I31
16. Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair value of convertible debt and warrant liabilities | The following table presents liabilities that are measured and recognized at fair value as of March 31, 2015 on a recurring and non-recurring basis: Description Level 1 Level 2 Level 3 Gains (Losses) Derivatives $ $ $ 11,139,000 $ (2,099,940 ) Settlements Payable 1,101,179 Rescission Liability 489,349 (44,516 ) Fair Value at March 31, 2015 $ $ 1,590,528 $ 11,139,000 $ (2,144,456 ) The following table presents liabilities that are measured and recognized at fair value as of December 31, 2014 on a recurring and non-recurring basis: Description Level 1 Level 2 Level 3 Gains (Losses) Derivatives $ $ $ 9,039,061 $ (820,913 ) Settlements Payable 1,101,179 (1,101,179 ) Rescission Liability 444,833 (444,833 ) Fair Value at December 31, 2014 $ $ 1,546,012 $ 9,039,061 $ (2,366,925 ) |
1. Organization and Significa32
1. Organization and Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | |||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 23,863 | $ 6,978 | $ 32,373 | $ 60,612 |
Share based compensation | $ 138,000 | $ 406,050 |
2. Going Concern Consideratio33
2. Going Concern Considerations (Details Narrative) - USD ($) | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Going Concern Considerations Details Narrative | |||
Working capital | $ (16,588,779) | ||
Stockholders deficit | $ (16,570,262) | $ (14,220,829) | $ (10,279,879) |
3. Accounts Payable and Accru34
3. Accounts Payable and Accrued Liabilities (Details) - USD ($) | Mar. 31, 2015 | Dec. 31, 2014 |
Payables and Accruals [Abstract] | ||
Trade accounts payable | $ 1,231,264 | $ 1,110,576 |
Accrued wages payable | 1,569,434 | 1,541,309 |
Accrued interest expense | 340,279 | 324,913 |
Total accounts payable and accrued liabilities | $ 3,140,977 | $ 2,976,798 |
4. Accounts Payable and Accru35
4. Accounts Payable and Accrued Liabilities - Related Party (Details Narrative) - USD ($) | Mar. 31, 2015 | Dec. 31, 2014 |
Notes payable, related parties | $ 15,000 | $ 15,000 |
Serge Monros | ||
Notes payable, related parties | 10,000 | 10,000 |
Greg Sweeney | ||
Notes payable, related parties | $ 5,000 | $ 5,000 |
6. Settlement Payable (Details
6. Settlement Payable (Details Narrative) - USD ($) | Mar. 31, 2015 | Dec. 31, 2014 |
Settlement Payable | ||
Settlement payable | $ 1,101,179 | $ 1,101,179 |
7. Rescission Liability (Detail
7. Rescission Liability (Details Narrative) - USD ($) | Mar. 31, 2015 | Dec. 31, 2014 |
Rescission Liability Details Narrative | ||
Rescission liability | $ 489,349 | $ 444,833 |
8. Derivatives (Details - Fair
8. Derivatives (Details - Fair value) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Fair value, beginning balance | $ 8,788,254 | |
Fair value, ending balance | 9,351,764 | $ 8,788,254 |
Convertible Notes [Member] | ||
Fair value, beginning balance | 8,788,254 | 3,848,923 |
Change in fair value due to issuances | 79,623 | |
Change due to exercise/conversion | (385,035) | |
Change in fair value | 563,510 | 5,244,743 |
Fair value, ending balance | 9,351,764 | 8,788,254 |
Warrant [Member] | ||
Fair value, beginning balance | 250,807 | 1,382,612 |
Change in fair value due to issuances | 1,512,818 | 265,489 |
Change due to exercise/conversion | (164,561) | |
Change in fair value | 23,611 | (1,232,733) |
Fair value, ending balance | 1,787,236 | 250,807 |
Convertible Notes and Warrant Liabilities [Member] | ||
Fair value, beginning balance | 9,039,061 | 5,231,535 |
Change in fair value due to issuances | 1,512,818 | 345,112 |
Change due to exercise/conversion | (549,596) | |
Change in fair value | 587,121 | 4,012,010 |
Fair value, ending balance | $ 11,139,000 | $ 9,039,061 |
8. Derivatives (Details - Assum
8. Derivatives (Details - Assumptions) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Dividend yield | 0.00% | 0.00% |
Volatility | 154.00% | 151.00% |
Maturity dates | 0.74-2.41 years | 0.99-2.41 years |
Stock Price | $ .0036 | $ .0038 |
Minimum [Member] | ||
Risk-free interest rate | 0.14% | 0.25% |
Maximum [Member] | ||
Risk-free interest rate | 0.56% | 0.67% |
9. Convertible Debt (Details)
9. Convertible Debt (Details) - USD ($) | Mar. 31, 2015 | Dec. 31, 2014 |
Convertible debt | $ 511,440 | $ 511,440 |
Convertible debt - related party | 204,302 | 204,302 |
Convertible debt, noncurrent | 0 | |
DS Enterprises [Member] | ||
Contractual balance, in default | 511,440 | 511,440 |
Less unamortized discount | 0 | 0 |
Convertible debt | 511,440 | 511,440 |
His Devine Vehicle [Member] | ||
Contractual balance, in default | 204,302 | 204,302 |
Less unamortized discount | 0 | 0 |
Convertible debt - related party | 204,302 | 204,302 |
Steve Botkin | ||
Contractual balance, in default | 0 | 0 |
Less unamortized discount | 0 | 0 |
Convertible debt, noncurrent | $ 0 | $ 0 |
10. Notes Payable (Details Narr
10. Notes Payable (Details Narrative) - USD ($) | Mar. 31, 2015 | Dec. 31, 2014 |
Debt Disclosure [Abstract] | ||
Notes payable in default | $ 29,217 | $ 30,533 |
11. Income Taxes (Details - Inc
11. Income Taxes (Details - Income tax) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Net income/(loss) before income taxes | $ (2,887,433) | $ (1,625,536) | $ (9,494,263) |
11. Income Taxes (Details - Def
11. Income Taxes (Details - Deferred tax assets) - USD ($) | Mar. 31, 2015 | Dec. 31, 2014 |
Income Tax Disclosure [Abstract] | ||
Loss carry-forwards | $ 5,060,271 | $ 4,854,603 |
Valuation allowance | (5,060,271) | (4,854,603) |
Net deferred tax assets | $ 0 | $ 0 |
11. Income Taxes (Details Narra
11. Income Taxes (Details Narrative) - Mar. 31, 2015 - USD ($) | Total |
Income Tax Disclosure [Abstract] | |
Net operating loss carryforwards | $ 14,883,150 |
Operating loss beginning expiration date | Dec. 31, 2013 |
13. Stockholders Equity (Detail
13. Stockholders Equity (Details - Warrants) - Mar. 31, 2015 - $ / shares | Total |
$.0004 | |
Number of warrants | 728,570,000 |
Exercise price | $ .0004 |
Remaining life | 0.17-0.98 years |
$0.0100 Price | |
Number of warrants | 5,000,000 |
Exercise price | $ .0100 |
Remaining life | .08 years |
Warrant [Member] | |
Number of warrants | 733,570,000 |
13. Stockholders Equity (Deta46
13. Stockholders Equity (Details - Dilutive securities) | 3 Months Ended |
Mar. 31, 2015shares | |
Potentially dilutive stock | 7,738,424,000 |
Preferred Stock Series A | |
Potentially dilutive stock | 2,776,014,300 |
Preferred Stock Series B | |
Potentially dilutive stock | 4,117,090,000 |
Preferred Stock Series C | |
Potentially dilutive stock | 845,319,700 |
15. Non-Cash Investing (Details
15. Non-Cash Investing (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Supplemental Cash Flow Elements [Abstract] | ||
Settlement of Debt and Derivative Liabilities with common stock | $ 0 | $ 164,561 |
Conversion of Preferred Stock into Common Stock | 12,250 | 70,000 |
Stock Issued with Debt | 0 | 4,350 |
Preferred Stock Loaned/Common Stock Issued for Stock Payable | $ 0 | $ 565,384 |
16. Fair Value of Financial I48
16. Fair Value of Financial Instruments (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Derivatives | ||
Gain (losses) on derivatives | $ (2,099,940) | $ (820,913) |
Settlements Payable | ||
Gain (losses) on derivatives | 0 | (1,101,179) |
Recission Liability | ||
Gain (losses) on derivatives | (44,516) | (444,833) |
Total Fair Value Gains (Losses) | ||
Gain (losses) on derivatives | (2,144,456) | (2,366,925) |
Fair Value, Inputs, Level 1 [Member] | ||
Fair value liabilities | 0 | 0 |
Fair Value, Inputs, Level 1 [Member] | Derivatives | ||
Fair value liabilities | 0 | 0 |
Fair Value, Inputs, Level 1 [Member] | Settlements Payable | ||
Fair value liabilities | 0 | 0 |
Fair Value, Inputs, Level 1 [Member] | Recission Liability | ||
Fair value liabilities | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair value liabilities | 1,590,528 | 1,546,012 |
Fair Value, Inputs, Level 2 [Member] | Derivatives | ||
Fair value liabilities | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | Settlements Payable | ||
Fair value liabilities | 1,101,179 | 1,101,179 |
Fair Value, Inputs, Level 2 [Member] | Recission Liability | ||
Fair value liabilities | 489,349 | 444,833 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair value liabilities | 11,139,000 | 9,039,061 |
Fair Value, Inputs, Level 3 [Member] | Derivatives | ||
Fair value liabilities | 11,139,000 | 9,039,061 |
Fair Value, Inputs, Level 3 [Member] | Settlements Payable | ||
Fair value liabilities | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Recission Liability | ||
Fair value liabilities | $ 0 | $ 0 |