Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 11, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | Acology Inc. | |
Entity Central Index Key | 1,096,950 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 5,164,134,794 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,016 |
Balance Sheets
Balance Sheets - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
CURRENT ASSETS: | ||
Cash | $ 53,360 | $ 37,533 |
Accounts Receivable | 27,823 | 30,734 |
Inventories | 83,267 | 79,941 |
Note Receivable | $ 159,586 | 155,835 |
Advance to supplier | 10,683 | |
TOTAL CURRENT ASSETS | $ 324,036 | 314,726 |
Property and equipment, net of accumulated depeciation of $38,073 and $31,773, respectively | 58,681 | 54,982 |
Security deposits | 7,489 | 7,489 |
TOTAL ASSETS | 390,206 | 377,197 |
CURRENT LIABILITIES: | ||
Accounts payable | 78,950 | 45,760 |
Convertible notes payable, net of debt discount of $121,687 and $226,186, respectively | 378,313 | 326,314 |
Notes payable | 585,000 | 607,000 |
Loan payable - stockholder | 93,494 | 93,494 |
Accrued expenses | 129,617 | 102,908 |
Derivative Liablility | 424,123 | 623,994 |
TOTAL CURRENT LIABILITIES | 1,689,497 | 1,799,470 |
STOCKHOLDERS' DEFICIENCY | ||
Common Stock, $.00001 par value, 6,000,000,000 shares authorized 5,164,134,794 and 4,974,621,214 shares issued and outstanding December 31, 2015 and 2014, respectively | 51,641 | 49,745 |
Additional Paid in Capital | 252,572 | 102,857 |
Accumulated Deficit | (1,603,504) | (1,574,875) |
TOTAL STOCKHOLDERS' DEFICIENCY | (1,299,291) | (1,422,273) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY | $ 390,206 | $ 377,197 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Office Equipment Net Depreciation | $ 38,073 | $ 31,773 |
Convertible notes payable, net of discount | $ 121,687 | $ 226,186 |
Common Stock Par Value | $ 0.00001 | $ 0.00001 |
Common Stock Shares Authorized | 6,000,000,000 | 6,000,000,000 |
Common Stock Shares Issued | 5,164,134,794 | 4,974,621,214 |
Common Stock Shares Outstanding | 5,164,134,794 | 4,974,621,214 |
Statements of Operations
Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||
Sales | $ 535,302 | $ 299,675 |
Cost of Sales | 86,570 | 97,358 |
Gross Profit | 448,732 | 202,317 |
Operating expenses: | ||
General and administrative | 390,539 | 231,007 |
Advertising and marketing | 80,833 | 20,419 |
Total operating expenses | 471,372 | 251,426 |
Loss from operations | (22,640) | (49,109) |
Other expenses (income): | ||
Interest expense, net of interest income of $3,751 and $0 | 83,509 | $ 14,014 |
Gain on extinguishment of debt | (16,542) | |
Gain on change in fair value of derivative | (60,978) | |
Total other expenses | 5,989 | $ 14,014 |
Loss before income taxes | $ (28,629) | $ (63,123) |
Income tax provision | ||
Net Loss | $ (28,629) | $ (63,123) |
Loss per common share | $ 0 | $ 0 |
Weighted average common shares outstanding | 5,018,841,049 | 4,546,014,334 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
OPERATING ACTIVITIES: | ||
Net loss | $ (28,629) | $ (63,123) |
Adjustments to reconcile net loss to net cash (used in) operating activities: | ||
Depreciation expense | 6,300 | $ 4,303 |
Gain on extinguishment of debt | (16,542) | |
Gain on change in fair value of derivative | (60,978) | |
Non cash interest expense | 70,008 | |
Changes in operating assets and liabilities | ||
Accounts receivable | 2,911 | $ (19,985) |
Inventories | (3,326) | (2,772) |
Accounts payable | 33,191 | (18,542) |
Advance to supplier | 10,683 | (17,141) |
Accrued expenses | 26,709 | 16,391 |
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | $ 40,327 | $ (100,869) |
INVESTING ACTIVITIES: | ||
Loan to non related party | ||
Acquisition of property and equipment | $ (10,000) | $ (1,062) |
Payment of security deposits | ||
NET CASH USED IN INVESTING ACTIVITIES | $ (10,000) | $ (1,062) |
FINANCING ACTIVITIES: | ||
Proceeds from notes payable | $ 7,500 | |
Proceeds of loan from stockholder | $ 3,500 | |
Repayment of notes payable | $ (22,000) | |
NET CASH PROVIDED (USED IN) BY FINANCING ACTIVITIES | (14,500) | $ 3,500 |
INCREASE (DECREASE) IN CASH | 15,827 | (98,431) |
CASH - BEGINNING OF PERIOD | 37,533 | 261,233 |
CASH - END OF PERIOD | 53,360 | $ 162,802 |
Non-cash financing activities | ||
Conversion of convertible debt with derivative into common stock | 168,153 | |
Common stock issued in connection with conversion | $ 151,611 |
1. Business
1. Business | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
1. Business | NOTE 1 Business Acology, Inc. (the Company), through its wholly owned subsidiary, D&C Distributors, LLC (D&C) is in the business of designing, manufacturing, branding and selling proprietary plastic medical grade containers that can store pharmaceuticals, herbs, teas and other solids or liquids, some of which can grind solids and shred herbs, and through its wholly owned subsidiary, D&C Printing LLC (Printing), is in the business of private labeling and branding for purchasers of containers and other products. D&C and Printing were formed under the laws of the State of California on January 29, 2013, and April 14, 2015, respectively. |
2. Summary of Significant Accou
2. Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
2. Summary of Significant Accounting Policies | NOTE 2 - Summary of Significant Accounting Policies Basis of Presentation and Principals of Consolidation The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (the SEC). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of the Companys management, the accompanying unaudited financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of March 31, 2016, and the results of operations and cash flows for the periods presented. The results of operations for the three months ended March 31, 2016, are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Form 10-K for the year ended December 31, 2015, filed with the SEC on April 14, 2016. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. Use of Estimates The preparation of the financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. Certain of the Companys estimates could be affected by external conditions, including those unique to its industry, and general economic conditions. It is possible that these external factors could have an effect on the Companys estimates that could cause actual results to differ from its estimates. The Company re-evaluates all of its accounting estimates at least quarterly based on these conditions and record adjustments when necessary. Cash The Company considers all short-term highly liquid investments with an original maturity at the date of purchase of three months or less to be cash equivalents. Revenue Recognition The Company follows the guidance of the Accounting Standards Codification (ASC) Topic 605, Revenue Recognition. Inventories Inventories, which consist of the Companys product held for resale, are stated at the lower of cost, determined using the first-in first-out, and net realizable value. Net realizable value is the estimated selling price, in the ordinary course of business, less estimated costs to complete and dispose of the product. If the Company identifies excess, obsolete or unsalable items, its inventories are written down to their realizable value in the period in which the impairment is first identified. Shipping and handling costs incurred for inventory purchases and product shipments are recorded in cost of sales in the Companys statements of operations. Fair Value Measurements The Company adopted the provisions of ASC Topic 820, Fair Value Measurements and Disclosures, The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The carrying amounts of our short and long term credit obligations approximate fair value because the effective yields on these obligations, which include contractual interest rates taken together with other features such as concurrent issuances of warrants and/or embedded conversion options, are comparable to rates of returns for instruments of similar credit risk. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 quoted prices in active markets for identical assets or liabilities Level 2 quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 inputs that are unobservable (for example cash flow modeling inputs based on assumptions) The derivative liability in connection with the conversion feature of the convertible debt, classified as a Level 3 liability, is the only financial liability measure at fair value on a recurring basis. The change in the Level 3 financial instrument is as follows: Balance, January 1, 2016 $ 623,994 · Converted during the period 138,893 · Change in fair value recognized in operations 60,978 Balance, March 31, 2016 $ 424,123 Property and Equipment Property and equipment is stated at cost less accumulated depreciation. Depreciation is provided for on a straight-line basis over the useful lives of the assets. For furniture and fixtures the useful life is five years, Leasehold Improvements are depreciated over the two year lease term. Expenditures for additions and improvements are capitalized; repairs and maintenance are expensed as incurred. Convertible Instruments The Company evaluates and account for conversion options embedded in convertible instruments in accordance with ASC 815 Derivatives and Hedging Activities. Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. The Company accounts for the conversion of convertible debt when a conversion option has been bifurcated using the general extinguishment standards. The debt and equity linked derivatives are removed at their carrying amounts and the shares issued are measured at their then-current fair value, with any difference recorded as a gain or loss on extinguishment of the two separate accounting liabilities. During the quarter ended March 31, 2016, the Company recognized a gain on extinguishment of $16,542 from the conversion of convertible debt with a bifurcated conversion option. Advertising Advertising and marketing expenses are charged to operations as incurred. Income Taxes The Company use the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, Income Taxes. ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprises financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company has no material uncertain tax positions. Recent accounting pronouncements The Company does not believe there are any recently issued, but not yet effective accounting standards that would have a significant impact on the Companys financial position or results of operations. |
3. Going Concern
3. Going Concern | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
3. Going Concern | NOTE 3 Going Concern The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. At March 31, 2016, the Company had a stockholders deficit of $1,299,291 and a working capital deficit of $1,365,461. In addition, the Company has generated operating losses since inception and has notes payable that are in default. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the successful execution of its operating plan which includes increasing sales of existing products while introducing additional products and services, controlling operation expenses, negotiating extensions of existing loans and raising either debt or equity financing. There is no assurance that we will be able to increase sales or to obtain extend financing on terms acceptable to us or at all or successfully execute any of the other measures set forth in the previous sentence. |
4. Note Receivable
4. Note Receivable | 3 Months Ended |
Mar. 31, 2016 | |
NoteReceivableAbstract | |
4. Note Receivable | NOTE 4 Note Receivable On August 11, 2015 the Company loaned $150,000 to an unrelated person who is one of the convertible noteholders referred to in Note 5. The note accrues interest at the highest lawful rate, but not more the 20% per annum, the Company is accruing interest at 10% per annum based on California usury rates. Upon an event of default, as defined in the note, interest will be compounded monthly. The note matures August 11, 2016. |
5. Convertible Notes payable
5. Convertible Notes payable | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
5. Convertible Notes payable | NOTE 5 Convertible Notes Payable The following is a description of convertible notes payable at March 31, 2016: A convertible promissory note dated September 14, 2015, in the original amount of $360,000. The note bears interest at 0.28% per annum and is due September 14, 2016. The note is subject to acceleration in the event of certain events of default, contains certain restrictive covenants and is secured by a pledge of all of the membership units in D& C. If an event of default occurs, the unpaid principal amount and interest accrued thereon will be convertible into shares of the Companys common stock at a conversion price per share equal to 50% of the average daily closing price for three consecutive trading days ending on the trading day immediately prior to the conversion date. During the year ended December 31, 2015, the holder converted $50,000 of principal and during the three months ended March 31, 2016 converted an additional $60,000 of principal. The outstanding principal balance at March 31, 2016, was $250,000. A convertible promissory note, dated December 15, 2015, made in favor of the unrelated party referred to above in the principal amount of $8,000. This note is convertible into shares of the Companys common stock at a conversion price equal to the average of the daily closing price for a share of Common Stock for the 3 consecutive trading days ending on the trading day immediately prior to the day on which a notice of conversion is delivered. The note matures on December 27, 2016, and bears interest at the highest lawful rate, but not more than 20% per annum. A convertible promissory note, dated February 11, 2016, made in favor of the unrelated party referred to above in the principal amount of $7,500. This note is convertible into shares of the Companys common stock at a conversion price equal to the average of the daily closing price for a share of Common Stock for the 3 consecutive trading days ending on the trading day immediately prior to the day on which a notice of conversion is delivered. The note matures on February 11, 2017, and bears interest at the highest lawful rate, but not more than 20% per annum. The Company has determined that the conversion feature embedded in the notes referred to above that contain a potential variable conversion amount which constitutes a derivative which has been bifurcated from the note and recorded as a derivative liability, with a corresponding discount recorded to the associated debt. The excess of the derivative value over the face amount of the note is recorded immediately to interest expense at inception. The above notes are presented net of a discount of $121,687 at March 31, 2016, on the accompanying balance sheet. A series of promissory note conversion agreements that the Company entered into during 2014 with ten unaffiliated individuals in the aggregate amount of $224,500. These notes are convertible into shares of the Companys common stock at a conversion price of $.05 per share. The loans are non-interest bearing and have no stated maturity date. A promissory note conversion agreement that the Company entered into with an unaffiliated individual in the amount of $10,000. This note is convertible into shares of the Companys common stock at a conversion price of $.05 per share. The note bears interest at 15% per annum and matured April 3, 2015. The Company is negotiating an extension of the maturity date. |
6. Notes payable
6. Notes payable | 3 Months Ended |
Mar. 31, 2016 | |
Payables and Accruals [Abstract] | |
6. Notes payable | NOTE 6 Notes Payable During 2014, the Company entered into a series of promissory notes with four unaffiliated individuals in the aggregate amount of $457,000, with a principal balance of $435,000 at March 31, 2016. These notes bear interest at rates ranging from 10% to 15% (with a weighted-average rate of 11.7%). These notes are past due and the Company is negotiating an extension of their respective maturity dates. On August 15, 2015, the Company issued a promissory note in the amount of $150,000 to an unrelated third party. The note bears interest at .48% per annum provided that the note is paid on or before maturity date, or 2 percentage points over the Wall Street Journal Prime rate, if not repaid on or before the maturity date. This note matures on August 11, 2016. Upon an event of default, as defined in the note, interest shall be compounded daily. |
7. Loan payable - shareholder
7. Loan payable - shareholder | 3 Months Ended |
Mar. 31, 2016 | |
Notes to Financial Statements | |
7. Loan payable - shareholder | NOTE 7 Loan Payable - Shareholder During the years ended December 31, 2015, and 2014, the Company received advances from one of its stockholders to help finance its operations in the amounts of $25,147 and $68,347, respectively. The loan is non-interest bearing and has not set maturity date. The Company expects to repay the loan when cash flows become available. The balance due at March 31, 2016, aggregated $93,494. |
8. Stockholders Deficiency
8. Stockholders Deficiency | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
8. Stockholders Deficiency | NOTE 8 Stockholders Deficiency On March 10, 2016, the Company issued 189,513,58 shares of common stock in connection with the conversion of $60,000 of the principal amount of the Convertible Promissory Note described in Note 5. |
9. Concentrations
9. Concentrations | 3 Months Ended |
Mar. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
9. Concentrations | NOTE 9 Concentrations For the three months ended March 31, 2016, none of our customers accounted for more than 10% of sales. For the three months ended March 31, 2015, the Companys largest customer accounted for approximately 12% of sales. For the three month periods ended March 31, 2016 and 2015, the Company purchased approximately 95% and 99% of its products from one distributor. |
10. Commitments
10. Commitments | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
10. Commitments | NOTE 10 Commitments The Company is committed under an operating lease for its premises. The lease calls for monthly payments of $7,500 plus 100% of operating expenses, until the lease expires August 31, 2016. |
11. Subsequent events
11. Subsequent events | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
11. Subsequent events | NOTE 11 Subsequent Events Management has evaluated subsequent events through the date which the financial statements were available to be issued. On April 1, 2016, the Company issued 428,571,429 shares of common stock upon conversion of $50,000 of the principal amount of the convertible promissory note described in note 8. |
2. Summary of Significant Acc17
2. Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of Presentation and Principals of Consolidation The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (the SEC). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of the Companys management, the accompanying unaudited financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of March 31, 2016, and the results of operations and cash flows for the periods presented. The results of operations for the three months ended March 31, 2016, are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Form 10-K for the year ended December 31, 2015, filed with the SEC on April 14, 2016. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of the financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. Certain of the Companys estimates could be affected by external conditions, including those unique to its industry, and general economic conditions. It is possible that these external factors could have an effect on the Companys estimates that could cause actual results to differ from its estimates. The Company re-evaluates all of its accounting estimates at least quarterly based on these conditions and record adjustments when necessary. |
Cash | Cash The Company considers all short-term highly liquid investments with an original maturity at the date of purchase of three months or less to be cash equivalents. |
Revenue Recognition | Revenue Recognition The Company follows the guidance of the Accounting Standards Codification (ASC) Topic 605, Revenue Recognition. |
Inventories | Inventories Inventories, which consist of the Companys product held for resale, are stated at the lower of cost, determined using the first-in first-out, and net realizable value. Net realizable value is the estimated selling price, in the ordinary course of business, less estimated costs to complete and dispose of the product. If the Company identifies excess, obsolete or unsalable items, its inventories are written down to their realizable value in the period in which the impairment is first identified. Shipping and handling costs incurred for inventory purchases and product shipments are recorded in cost of sales in the Companys statements of operations. |
Fair Value Measurements | Fair Value Measurements The Company adopted the provisions of ASC Topic 820, Fair Value Measurements and Disclosures, The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The carrying amounts of our short and long term credit obligations approximate fair value because the effective yields on these obligations, which include contractual interest rates taken together with other features such as concurrent issuances of warrants and/or embedded conversion options, are comparable to rates of returns for instruments of similar credit risk. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 quoted prices in active markets for identical assets or liabilities Level 2 quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 inputs that are unobservable (for example cash flow modeling inputs based on assumptions) The derivative liability in connection with the conversion feature of the convertible debt, classified as a Level 3 liability, is the only financial liability measure at fair value on a recurring basis. The change in the Level 3 financial instrument is as follows: Balance, January 1, 2016 $ 623,994 · Converted during the period 138,893 · Change in fair value recognized in operations 60,978 Balance, March 31, 2016 $ 424,123 |
Property and Equipment | Property and Equipment Property and equipment is stated at cost less accumulated depreciation. Depreciation is provided for on a straight-line basis over the useful lives of the assets. For furniture and fixtures the useful life is five years, Leasehold Improvements are depreciated over the two year lease term. Expenditures for additions and improvements are capitalized; repairs and maintenance are expensed as incurred. |
Convertible Instruments | Convertible Instruments The Company evaluates and account for conversion options embedded in convertible instruments in accordance with ASC 815 Derivatives and Hedging Activities. Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. The Company accounts for the conversion of convertible debt when a conversion option has been bifurcated using the general extinguishment standards. The debt and equity linked derivatives are removed at their carrying amounts and the shares issued are measured at their then-current fair value, with any difference recorded as a gain or loss on extinguishment of the two separate accounting liabilities. During the quarter ended March 31, 2016, the Company recognized a gain on extinguishment of $16,542 from the conversion of convertible debt with a bifurcated conversion option. |
Advertising | Advertising Advertising and marketing expenses are charged to operations as incurred. |
Income Taxes | Income Taxes The Company use the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, Income Taxes. ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprises financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company has no material uncertain tax positions. |
Recent accounting pronouncements | Recent accounting pronouncements The Company does not believe there are any recently issued, but not yet effective accounting standards that would have a significant impact on the Companys financial position or results of operations. |
2. Summary of Significant Acc18
2. Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Summary Of Significant Accounting Policies Tables | |
Fair value measurements | Balance, January 1, 2016 $ 623,994 · Converted during the Year (138,893) 138,893 · Change in fair value recognized in operations (60,978) 60,978 Balance, March 31, 2016 $ 424,123 |
2. Summary of Significant Acc19
2. Summary of Significant Accounting Policies (Details) | Mar. 31, 2016USD ($) |
Summary Of Significant Accounting Policies Details | |
Balance, January 1, 2016 | $ 623,994 |
• Converted during the Year | 138,893 |
• Change in fair value recognized in operations | 60,978 |
Balance, March 31, 2016 | $ 424,123 |
3. Going Concern (Details Narra
3. Going Concern (Details Narrative) | Mar. 31, 2016USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Shareholders Deficit | $ 1,299,291 |
Working Capital Deficit | $ 1,365,461 |
11. Concentrations (Details Nar
11. Concentrations (Details Narrative) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Risks and Uncertainties [Abstract] | ||
Concentration risk percentage | 95.00% | 99.00% |