Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Apr. 12, 2021 | Jun. 30, 2020 | |
Document And Entity Information | |||
Entity Registrant Name | PCT LTD | ||
Entity Central Index Key | 0001119897 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
Entity Incorporation, State or Country Code | NV | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 000-31549 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Interactive Data Current | Yes | ||
Is Entity Emerging Growth Company? | false | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Public Float | $ 20,119,600 | ||
Entity Common Stock, Shares Outstanding | 756,329,354 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 | ||
Entity Shell Company | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 115,196 | $ 67,613 |
Accounts receivable, net | 349,526 | 111,915 |
Inventory | 6,188 | |
Prepaid expenses | 274,736 | 43,100 |
Other current assets | 2,110 | 2,110 |
Total current assets | 747,756 | 224,738 |
PROPERTY AND EQUIPMENT, net | 358,719 | 440,109 |
OTHER ASSETS | ||
Intangible assets, net | 3,400,024 | 3,704,429 |
Operating lease right-of-use asset | 118,385 | |
Deposits | 9,726 | 5,499 |
Total other assets | 3,528,135 | 3,709,928 |
TOTAL ASSETS | 4,634,610 | 4,374,775 |
CURRENT LIABILITIES | ||
Accounts payable | 272,978 | 315,228 |
Accrued expenses - related parties | 139,280 | 84,538 |
Accrued expenses | 622,040 | 890,104 |
Deferred revenue | 1,075 | |
Operating lease liability | 34,965 | |
Current portion of notes payable – related parties, net | 789,214 | 826,957 |
Current portion of notes payable, net | 384,380 | 468,153 |
Current portion of convertible notes payable, net | 1,554,503 | 1,187,633 |
Derivative liability | 11,429,043 | 10,517,873 |
Total current liabilities | 15,227,478 | 14,290,486 |
LONG-TERM LIABILITIES | ||
Convertible notes payable, net of current portion and discounts | 53,500 | |
Operating lease liability, net of current portion | 83,420 | |
TOTAL LIABILITIES | 15,364,398 | 14,290,486 |
MEZZANINE EQUITY | ||
Preferred stock series A, $0.001 par value; 1,000,000 authorized; 500,000 issued and outstanding at December 31, 2020 and 2019, respectively; Preferred stock series B, $0.001 par value; 1,000,000 authorized; 1,000,000 issued and outstanding at December 31, 2020 and 2019, respectively; Preferred stock series C, $0.001 par value; 5,500,000 authorized; 40,000 and Nil issued and outstanding at December 31, 2020 and 2019, respectively | 258,645 | 218,645 |
STOCKHOLDERS' DEFICIT | ||
Common stock, $0.001 par value; 1,000,000,000 authorized; 722,487,846 and 498,880,300 issued and outstanding at December 31, 2020 and 2019, respectively | 722,488 | 498,881 |
Additional paid-in capital | 23,202,933 | 15,872,330 |
Accumulated deficit | (34,913,854) | (26,505,567) |
TOTAL STOCKHOLDERS' DEFICIT | (10,988,433) | (10,134,356) |
TOTAL LIABILITIES, MEZZANINE EQUITY, AND STOCKHOLDERS' DEFICIT | $ 4,634,610 | $ 4,374,775 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 7,500,000 | 7,500,000 |
Preferred stock, shares issued | 1,540,000 | 1,500,000 |
Preferred stock, shares outstanding | 1,540,000 | 1,500,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 722,487,846 | 498,880,300 |
Common stock, shares outstanding | 722,487,846 | 498,880,300 |
Preferred stock series A | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 500,000 | 500,000 |
Preferred stock, shares outstanding | 500,000 | 500,000 |
Preferred stock series B | ||
Preferred stock, par value | $ 0.001 | |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding | 1,000,000 | 1,000,000 |
Preferred stock series C | ||
Preferred stock, par value | $ 0.001 | |
Preferred stock, shares authorized | 5,500,000 | |
Preferred stock, shares issued | 40,000 | |
Preferred stock, shares outstanding | 40,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
REVENUES | ||
Product | $ 1,527,465 | $ 301,162 |
Licensing | 241,953 | 111,000 |
Equipment leases | 750,496 | 296,243 |
Total revenues | 2,519,914 | 708,405 |
OPERATING EXPENSES | ||
General and administrative | 2,485,379 | 1,922,941 |
Research and development | 40,429 | 6,149 |
Costs of product, licensing, and equipment leases | 1,046,627 | 123,223 |
Depreciation and amortization | 348,708 | 338,028 |
Total operating expenses | 3,921,143 | 2,390,341 |
Loss from operations | (1,401,229) | (1,681,936) |
OTHER INCOME (EXPENSE) | ||
Interest expense | (1,384,950) | (2,041,695) |
Loss on change in fair value of derivative liability | (5,424,692) | (12,912,201) |
Gain on change in fair value of preferred series A stock liability | 72,473 | |
Gain on sale of intangible assets | 52,498 | |
Gain (loss) on settlement of debt | 72,584 | (67,703) |
Total other income (expense) | (6,737,058) | (14,896,628) |
Loss before income taxes | (8,138,287) | (16,578,564) |
Income taxes | ||
NET LOSS | (8,138,287) | (16,578,564) |
Preferred series C stock deemed dividends | (270,000) | |
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS’ | $ (8,408,287) | $ (16,578,564) |
Basic and diluted net loss per share | $ (0.01) | $ (0.09) |
Basic and diluted weighted average shares outstanding | 609,029,869 | 189,765,526 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders’ Deficit - USD ($) | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Beginning balance, shares at Dec. 31, 2018 | 44,559,238 | |||
Beginning balance, amount at Dec. 31, 2018 | $ 44,560 | $ 11,588,030 | $ (9,927,003) | $ 1,705,587 |
Common stock issued for services, shares | 13,575,000 | |||
Common stock issued for services, amount | $ 13,575 | 213,353 | 226,928 | |
Common stock issued in settlement of debt, shares | 5,383,810 | |||
Common stock issued in settlement of debt, amount | $ 5,384 | 800,012 | 805,396 | |
Common stock issued in conversion of convertible notes payable, shares | 410,433,964 | |||
Common stock issued in conversion of convertible notes payable, amount | $ 410,434 | 3,012,257 | 3,422,691 | |
Common stock issued in cashless exercise of warrants, shares | 24,928,288 | |||
Common stock issued in cashless exercise of warrants, amount | $ 24,928 | 258,678 | 283,606 | |
Net loss | (16,578,564) | (16,578,564) | ||
Ending balance, shares at Dec. 31, 2019 | 498,880,300 | |||
Ending balance, amount at Dec. 31, 2019 | $ 498,881 | 15,872,330 | (26,505,567) | (10,134,356) |
Common stock issued for services, shares | 30,525,000 | |||
Common stock issued for services, amount | $ 30,525 | 645,594 | 676,119 | |
Common stock issued from subscriptions, shares | 9,800,000 | |||
Common stock issued from subscriptions, amount | $ 9,800 | 220,700 | 230,500 | |
Common stock issued in settlement of debt, shares | 30,250,000 | |||
Common stock issued in settlement of debt, amount | $ 30,250 | 1,128,475 | 1,158,725 | |
Common stock issued in conversion of convertible notes payable, shares | 98,786,360 | |||
Common stock issued in conversion of convertible notes payable, amount | $ 98,786 | 897,382 | 996,168 | |
Common stock issued in cashless exercise of warrants, shares | 9,246,186 | |||
Common stock issued in cashless exercise of warrants, amount | $ 9,246 | 420,702 | 429,948 | |
Common stock issued in conversion of series C preferred stock, shares | 45,000,000 | |||
Common stock issued in conversion of series C preferred stock, amount | $ 45,000 | 449,000 | 494,000 | |
Deemed dividend from beneficial conversion feature on series C preferred stock | 270,000 | (270,000) | ||
Deemed premium from conversion feature on note payable | 3,298,750 | 3,298,750 | ||
Net loss | (8,138,287) | (8,138,287) | ||
Ending balance, shares at Dec. 31, 2020 | 722,487,846 | |||
Ending balance, amount at Dec. 31, 2020 | $ 722,488 | $ 23,202,933 | $ (34,913,854) | $ (10,988,433) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (8,138,287) | $ (16,578,564) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 348,708 | 338,028 |
Amortization of debt discounts | 436,352 | 752,231 |
Amortization of operating lease right-of-use asset | 5,229 | 43,330 |
Loss on disposal of property and equipment | 173,551 | |
Bad debt expense | 45,575 | 16,250 |
Common stock issued for services | 676,119 | 226,928 |
Loss on change in fair value of derivative liability | 5,424,692 | 12,912,201 |
Gain on change in fair value of preferred series A stock liability | (72,473) | |
Series B preferred stock issued for services | 158,247 | |
(Gain) loss on settlement of debt | (72,584) | 67,703 |
Gain on sale of intangible assets | (52,498) | |
Default penalties on convertible notes | 28,762 | 660,485 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (283,186) | (161,385) |
Inventory | 20,481 | 26,510 |
Prepaid expenses and deposits | 243,863 | 175,394 |
Operating lease liability | (5,229) | (43,330) |
Deferred revenue | 1,075 | |
Accounts payable | (42,250) | 22,148 |
Accrued expenses - related party | 54,742 | 30,505 |
Accrued expenses | 739,449 | 678,873 |
Net cash used in operating activities | (830,664) | (799,417) |
Cash Flows from Investing Activities: | ||
Proceeds from sale of intangible assets | 111,323 | |
Purchases of property and equipment | (163,133) | (2,516) |
Purchase of intangible assets | (5,000) | |
Net cash (used in) provided by investing activities | (163,133) | 103,807 |
Cash Flows from Financing Activities: | ||
Proceeds from notes payable - related parties | 3,500 | 17,544 |
Proceeds from notes payable | 695,470 | 374,300 |
Proceeds from convertible notes payable | 1,463,000 | 577,750 |
Proceeds from preferred series C stock subscriptions | 270,000 | |
Proceeds from common stock subscriptions | 230,500 | |
Repayment of notes payable - related parties | (41,286) | (30,544) |
Repayment of notes payable | (716,897) | (89,720) |
Repayment of convertible notes payable | (862,907) | (91,000) |
Net cash provided by financing activities | 1,041,380 | 758,330 |
Net Change in Cash | 47,583 | 62,720 |
Cash and cash equivalents at beginning of period | 67,613 | 4,893 |
Cash and cash equivalents at end of period | 115,196 | 67,613 |
Supplemental Cash Flow Information: | ||
Cash paid for interest | 219,194 | 41,013 |
Cash paid for Income taxes | ||
Non-Cash Investing and Financing Activities | ||
Original debt discount against notes payable | 223,942 | 86,016 |
Original debt discount against convertible notes payable | 201,388 | 616,125 |
Deemed dividend from beneficial conversion feature on preferred series C stock | 270,000 | |
Modification of notes payable | 20,590 | |
Common stock issued in cashless exercise of warrants | 429,948 | 283,606 |
Common stock issued in conversion of convertible notes payable | 996,168 | 3,422,691 |
Accounts receivable netted against notes payable | 28,090 | |
Initial operating lease right-of-use asset and liability | 123,614 | 43,330 |
Preferred series A stock reclassification from liability to mezzanine equity | 60,398 | |
Extinguishment of notes payable | 216,410 | |
Common stock issued in conversion of preferred series C stock | 494,000 | |
Property and equipment transferred to inventory | $ 26,669 | $ 19,405 |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations PCT LTD (formerly Bingham Canyon Corporation, (the “Company,” “PCT LTD,” or “Bingham”), a Delaware corporation, was formed on February 27, 1986. The Company changed its domicile to Nevada on August 26, 1998. The Company acquires, develops and provides sustainable, environmentally safe disinfecting, cleaning and tracking technologies. The Company specializes in providing cleaning, sanitizing and disinfectant fluid solutions and fluid-generating equipment that creates environmentally safe solutions for global sustainability. On August 31, 2016, the Company entered into a Securities Exchange Agreement with Paradigm Convergence Technologies Corporation (“Paradigm,” or “PCT Corp.”) to effect the acquisition of Paradigm as a wholly owned subsidiary. Under the terms of the agreement, Bingham issued 16,790,625 restricted common shares of Bingham stock to the shareholders of Paradigm in exchange for all 22,387,500 outstanding common shares of Paradigm stock. In addition, Bingham issued options exercisable into 2,040,000 shares of the Bingham’s common stock (with exercise prices ranging between $0.133 and $0.333) in exchange for 2,720,000 outstanding Paradigm stock options (with exercise prices ranging between $0.10 and $0.25). These 2,040,000 options have been adjusted at the same exchange rate of 75% that the outstanding common shares were exchanged. As a result of this share exchange agreement, Paradigm, the operating company, is considered the accounting acquirer. Paradigm is located in Little River, SC and was formed June 6, 2012 under the name of EUR-ECA, Ltd. On September 11, 2015, its Board of Directors authorized EUR-ECA Ltd. to file with the Nevada Secretary of State to change its name to Paradigm Convergence Technologies Corp. Paradigm is a technology licensing company specializing in environmentally safe solutions for global sustainability. The company holds a patent, intellectual property and/or distribution rights to innovative products and technologies. Paradigm provides innovative products and technologies for eliminating biocidal contamination from water supplies, industrial fluids, hard surfaces, food-processing equipment and medical devices. Paradigm’s overall strategy is to market new products and technologies through the use of equipment leasing, joint ventures, licensing, distributor agreements and partnerships. Effective on February 29, 2018, the Company changed its name from Bingham Canyon Corporation to PCT LTD to more accurately identify the Company’s direction and to develop the complementary relationship and association with its wholly owned operating company, Paradigm Convergence Technologies Corporation (“Paradigm” or “PCT Corp.”). Principles of Consolidation The accompanying consolidated financial statements include the accounts of PCT LTD (“Parent”) and its wholly owned subsidiary, Paradigm Convergence Technologies Corporation (“Paradigm” or “Subsidiary”). All intercompany accounts have been eliminated upon consolidation. Use of Estimates The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting periods. Estimates are based on historical experience and on various other market-specific and other relevant assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from those estimates. Cash and Cash Equivalents Cash and cash equivalents are considered to be cash and highly liquid securities with original maturities of three months or less. The cash of $115,196 and $67,613 as of December 31, 2020 and December 31, 2019, respectively, represents cash on deposit in various bank accounts. There were no cash equivalents as of December 31, 2020 and December 31, 2019. Fair Value Measurements The Company follows ASC 820, “ Fair Value Measurements and Disclosures • Level 1 - Valuations for assets and liabilities traded in active markets from readily available pricing sources such as quoted prices in active markets for identical assets or liabilities. • Level 2 - Observable inputs (other than Level 1 quoted prices) such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. • Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cashflow methodologies and similar techniques. The carrying values of our financial instruments, including cash and cash equivalents, accounts receivable, inventory, prepaid expenses, accounts payable and accrued expenses approximate their fair value due to the short maturities of these financial instruments. Derivative liabilities are determined based on “Level 3” inputs, which are significant and unobservable and have the lowest priority. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations. Our financial assets and liabilities carried at fair value measured on a recurring basis as of December 31, 2020, consisted of the following: Total fair value at Quoted prices in active markets Significant other observable inputs Significant unobservable inputs Description: Derivative liability (1) 11,429,043 — — 11,429,043 Total 11,429,043 — — 11,429,043 Our financial assets and liabilities carried at fair value measured on a recurring basis as of December 31, 2019, consisted of the following: Total fair value at Quoted prices in active markets Significant other observable inputs Significant unobservable inputs Description: Derivative liability (1) 10,517,873 — — 10,517,873 Total 10,517,873 — — 10,517,873 (1) The Company has estimated the fair value of these liabilities using the Binomial Model. Derivative Liabilities The Company accounts for derivative instruments in accordance with ASC Topic 815, “ Derivatives and Hedging Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial statement. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. See Note 7 for additional information. Sequencing Policy Under ASC 815-40-35, the Company has adopted a sequencing policy whereby, in the event that reclassification of contracts from equity to assets or liabilities is necessary pursuant to ASC 815 due to the Company’s inability to demonstrate it has sufficient authorized shares as a result of certain securities with a potentially indeterminable number of shares, shares will be allocated on the basis of the earliest issuance date of potentially dilutive instruments with the earliest grants receiving the first allocation of shares. Pursuant to ASC 815, issuance of securities to the Company’s employees or directors is not subject to the sequencing policy. Accounts Receivable Trade accounts receivable are recorded at the time product is shipped or services are provided including any shipping and handling fees. The Company provided allowances for uncollectible accounts receivable equal to the estimated collection losses that will be incurred in collection of all receivables. Accounts receivable is periodically evaluated for collectability basis on past credit history with customers and their current financial condition. The Company’s management determines which accounts are past due and if deemed uncollectible, the Company charges off the receivable in the period the determination is made. Based on management’s evaluation, the Company provided an allowance for doubtful accounts of $61,825 and $16,250 at December 31, 2020 and December 31, 2019, respectively. Inventories Property and Equipment Property and equipment are stated at purchased cost and depreciated utilizing a straight-line method over estimated useful lives ranging from 3 to 7 years after the asset has been placed in service. Upon selling equipment that had been under a lease agreement, the Company discontinues the depreciation on that piece of equipment, as it transfers ownership to another entity. Additions and major improvements that extend the useful lives of property and equipment are capitalized. Maintenance and repairs are charged to operations as incurred. Upon trade-in, sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts, and any related gains or losses are recorded in the results of operations. Impairment of Long-lived Assets The carrying values of the Company’s long-lived assets are reviewed for impairment annually and whenever events or changes in circumstances indicate that they may not be recoverable. When projections indicate that the carrying value of the long-lived asset is not recoverable, the carrying value is reduced by the estimated excess of the carrying value over the fair value. An impairment charge is recognized if the carrying amount is not recoverable and the carrying amount exceeds the fair value of the long-lived assets as determined by projected discounted net future cashflows. The recorded impairment expense was $0 for the years ended December 31, 2020 and December 31, 2019, respectively. Intangible Assets Costs to obtain or develop patents are capitalized and amortized over the remaining life of the patents, and technology rights are amortized over their estimated useful lives. The Company currently has the right to several patents and proprietary technology. Patents and technology are amortized from the date the Company acquires or is awarded the patent or technology right over their estimated useful lives, which range from 1 to 15 years. Research and Development Research and development costs are recognized as an expense during the period incurred, which is until the conceptual formulation, design and testing of a process is completed and the process has been determined to be commercially viable. Leases In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, “ Leases ASC 842 requires lessors to expense costs that are not direct leasing costs, to continually assess collectability of lessee payments, and if operating lease payments are not probable of collection, to only recognize into income equal to the lesser of (i) straight-line rental income or (ii) lease payments received to date. Revenue Recognition On May 2014, the FASB issued ASU No. 2014-09, “ Revenue from Contracts with Customers” (Topic 606) The Company recognizes revenue based on the five criteria for revenue recognition established under Topic 606: 1) identify the contract, 2) identify separate performance obligations, 3) determine the transaction price, 4) allocate the transaction price among the performance obligations, and 5) recognize revenue as the performance obligations are satisfied. The Company has the following three revenue streams: 1) Product sales (equipment and/or fluid solutions): Contracts for product sales consist of invoices that specify the transaction price. The only performance commitment is the provision of products and the transaction price is allocated to the products specified on the invoice. The Company recognizes revenue from the sale of products when the performance obligation is satisfied by transferring control of the product to a customer. 2) Licensing: The Company licenses a contract-based use of the Company’s US EPA Product Registration, returning revenue in licensing fees and/or royalties from minimum or actual fluid sales. The Contract specifies the term, fees and/or royalty. Performance obligations include the provision of a sub-registration to use the US EPA Product Registration and/or the provision of a license to use the product for a period of time. The Company allocates the transaction price based on the relative standalone, selling price of each performance obligation. The Company’s licenses provide a right-to-use and create performance obligations, satisfied at a point in time. The Company recognizes revenue from licenses when the performance obligation is satisfied through the transfer of the license. For licenses that include royalties, the Company will recognize royalty revenue as the underlying sales or usages occur, as long as this approach does not result in the acceleration of revenue ahead of the entity’s performance. 3) Equipment leases: Contracts for equipment leases are systems service agreements, usually 3-year contracts for the provision of the Company’s equipment, and service of such, under contract to customers, with renewable terms. The performance obligation consists of the provision of with leased equipment. The Company recognizes revenue from the leasing of equipment as the entity provides the equipment and the customer simultaneously receives and consumes the benefits through the use of the equipment. This revenue-generating activity would meet the criteria for a performance obligation satisfied over time. As a result, the Company recognizes revenue over time by using the output method, as the Company can measure progress of the performance obligation using the time elapsed under each obligation. Additionally, under ASC 842, lessors are required to continually assess collectability of lessee payments, and if operating lease payments are not probable of collection, to only recognize into income equal to the lesser of (i) straight-line rental income or (ii) lease payments received to date. The Company has disclosed disaggregated revenue via revenue stream on the face of the statement of operations. The Company did not have any contract assets or liabilities at December 31, 2020 or 2019, respectively. For the year ended December 31, 2020, three customers accounted for 41%, 19% and 10%, respectively, of consolidated revenues for the period. For the year ended December 31, 2019, four customers accounted for 27%, 16%, 15%, and 13%, respectively, of consolidated revenues for the period. Stock Based Compensation The Company records stock-based compensation in accordance with ASC 718. Under the provisions of ASC 718, stock-based compensation expense is measured at the grant date, based on the fair value of the award, and is recognized over the requisite service period, which is generally the vesting period. The fair value of our stock options and warrants is estimated using a Black-Scholes option valuation model. Refer to Notes 9 and 10 for further details. Income Taxes Deferred income taxes are provided on a liability method, whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards. Deferred tax liabilities are recognized for taxable temporary differences, which are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. Basic and Diluted Loss Per Share Basic loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted loss per share is computed by dividing net loss by the weighted-average number of common shares and dilutive potential common shares outstanding during the period. As of December 31, 2020, there were outstanding common share equivalents (options, warrants, convertible debt, preferred series A stock, and preferred series C stock) which amounted to 599,906,324 shares of common stock. These common share equivalents were not included in the computation of diluted loss per share as their effect would have been anti-dilutive. Recent Accounting Pronouncements In August 2018, the FASB issued Accounting Standards Update No. 2018-13 (“ASU 2018-13”), Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements relating to fair value measurements as outlined in Topic 820, Fair Value Measurement. ASU 2018-13 is applicable to all entities that are required, under GAAP, to make disclosures about recurring or nonrecurring fair value measurements. The amendments outlined in ASU 2018-13 are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted for any removed or modified disclosures upon issuance of ASU 2018-13. The adoption of ASU 2018-13 did not have a material effect on the consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40)” (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP. The ASU’s amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company is currently evaluating the impact ASU 2020-06 will have on its financial statements. |
GOING CONCERN
GOING CONCERN | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | NOTE 2. GOING CONCERN The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has recurring losses, an accumulated deficit of $34,913,854, and negative cashflows from operations. As of December 31, 2020, the Company had a negative working capital of $14,479,722. The Company has relied on raising debt and equity capital in order to fund its ongoing day-to-day operations and its corporate overhead. The Company will require additional working capital from either cashflow from operations, from debt or equity financing or from a combination of these sources. These factors raise substantial doubt about the ability of the Company to continue as a going concern for a period of one year from the issuance of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company expects that working capital requirements will continue to be funded through a combination of its existing funds and further issuances of securities. Working capital requirements are expected to increase in line with the growth of the business. The Company has no lines of credit or other bank financing arrangements. The Company has financed operations to date through the proceeds of private placement of equity and debt instruments. In connection with the Company’s business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) developmental expenses associated with business growth and (ii) marketing expenses. The Company intends to finance these expenses with further issuances of securities, and debt issuances. Thereafter, the Company expects it will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to current stockholders. Further, such securities might have rights, preferences or privileges senior to common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, the Company may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict business operations. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 3. PROPERTY AND EQUIPMENT Property and equipment at December 31, 2020 and December 31, 2019 consisted of the following: December 31, 2020 December 31, 2019 Leasehold improvements $ 18,840 $ 151,719 Machinery and leased equipment 365,483 — Machinery and equipment not yet in service 32,580 321,565 Office equipment and furniture 39,357 20,064 Website 2,760 2,760 Total property and equipment $ 459,020 $ 496,108 Less: Accumulated Depreciation (100,301 ) (55,999 ) Property and equipment, net 358,719 440,109 Depreciation expense was $44,303 and $25,184 for the year ended December 31, 2020 and 2019, respectively. During the year ended December 31, 2020, the Company recorded a loss on disposal of equipment of $173,551 (2019 - $nil) On July 30, 2019, the Company transferred $17,876 of equipment not yet in service and offset accounts receivable of $23,209 in exchange for $13,939 and the settlement of accounts payable and accrued liabilities of $43,767. As result, the Company recorded a gain on the settlement of debt of $16,706. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 4. INTANGIBLE ASSETS Intangible assets at December 31, 2020 and December 31, 2019 consisted of the following: December 31, 2020 December 31, 2019 Patents $ 4,505,489 $ 4,505,489 Technology rights 200,000 200,000 Intangible, at cost 4,705,489 4,705,489 Less: Accumulated amortization (1,305,465 ) (1,001,060 ) Net Carrying Amount $ 3,400,024 $ 3,704,429 Amortization expense was $304,405 for the year ended December 31, 2020, of which $9,931 relates to patents and $294,474 relates to technology rights. Amortization expense was $312,844 for the year ended December 31, 2019, of which $18,693 relates to patents and $294,151 relates to technology rights. No impairment was recognized during the years ended December 31, 2020 and 2019. Estimated Future Amortization Expense: $ For year ending December 31, 2021 302,003 For year ending December 31, 2022 302,003 For year ending December 31, 2023 302,003 For year ending December 31, 2024 302,003 For year ending December 31, 2025 302,003 Thereafter 1,890,009 Total 3,400,024 On May 10, 2019, the Company sold intangible assets with a carrying value of $47,502 for $111,323 of cash and the settlement of $33,677 of liabilities owed to the buyer. The Company recorded a gain on sales of intangible assets of $52,498. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
LEASES | NOTE 5 – LEASES The Company’s lease in Little River, SC expired during the year ended December 31, 2019, at which time a new owner purchased the building and the Company went on a month-to-month rental basis. The Company did not have any right-of-use operating assets or liabilities as of December 31, 2019. Expense related to leases is recorded on a straight-line basis over the lease term, including rent holidays. During the year ended December 31, 2019, the Company recognized operating lease expense of $52,800. Operating lease costs are included within selling, administrative and other expenses on the consolidated statements of operations. On August 26, 2020, the Company signed a new one-year lease for the Company headquarters and operations located in Little River, South Carolina. The lease was effective retroactively from July 1, 2020, ending on June 30, 2021, for $7,500 per month. The Company has an option to renew the lease for up to an additional four years. As the Company is not reasonably certain to exercise the option to renew the lease the term of the lease is 12 months or less, the Company recognized $82,800 of operating lease expense within selling, administrative and other expenses during the period ended December 31, 2020. On October 19, 2020, the Company entered into a building lease with a three-year term and an effective date of November 1, 2020. The lease requires the Company to make payments of $4,500 per month. The Company recognized an operating lease right-of-use asset and an operating lease liability in the amount of $123,614 and $123,614, respectively, which represented the presented the present value of future lease payments using a discount rate of 18.5% per annum. At December 31, 2020, the weighted average remaining operating lease term was 2.83 years and the weighted average discount rate associated with operating leases was 18.5%. The Components of lease expenses were as follows: 2020 $ 2019 $ Total operating lease cost 10,458 52,800 The following table provides supplemental cashflow and other information related to leases for the year ended December 31, 2020 and 2019: 2020 $ 2019 $ Lease payments 9,000 52,800 Supplemental balance sheet information related to leases as of December 31, 2020 and 2019 are as below: 2020 $ 2019 $ Cost 123,614 43,330 Accumulated amortization (5,229) (43,330) Net carrying value 118,385 — Future minimum lease payments related to lease obligations are as follows as of December 31, 2020: $ 2021 54,000 2022 54,000 2023 45,000 Total minimum lease payments 153,000 Less: amount of lease payments representing effects of discounting (34,615) Present value of future minimum lease payments 118,385 Less: current obligations under leases (34,965) Lease liabilities, net of current portion 83,420 |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 6. Notes Payable The following table summarizes notes payable as of December 31, 2020 and December 31, 2019: Type Original Amount Origination Date Maturity Date Effective Annual Interest Rate Balance at December 31, 2020 Balance at December 31, 2019 Note Payable ** $ 25,000 05/08/2017 06/30/2018 0 % $ 27,500 $ 27,500 Note Payable (bb) $ 130,000 06/20/2018 01/02/2020 8 % $ — $ 130,000 Note Payable ** $ 8,700 11/15/2018 06/30/2019 10 % $ 8,700 $ 8,700 Note Payable (e) $ 90,596 09/15/2019 05/28/2020 8 % $ — $ 90,596 Note Payable (o) $ 50,000 10/03/2019 04/03/2020 12 % $ — $ 37,500 Note Payable (e) $ 17,500 11/12/2019 11/12/2020 8 % $ — $ 17,500 Note Payable $ 83,400 12/20/2019 06/19/2020 150 % $ — $ 80,192 Note Payable $ 148,362 12/20/2019 11/27/2020 80 % $ — $ 145,404 Note Payable (a) $ 25,782 01/08/2020 05/13/2020 313 % $ — $ — Note Payable (b) $ 33,660 02/19/2020 04/30/2020 585 % $ — $ — Note Payable (c)(e) $ 20,000 02/28/2020 05/28/2020 8 % $ — $ — Note Payable (d) $ 100,000 03/31/2020 08/01/2020 30 % $ — $ — Note Payable (e) $ 118,644 05/05/2020 05/05/2021 8 % $ 110,644 $ — Note Payable (f)(y) $ 150,000 07/08/2020 10/05/2021 10 % $ — $ — Note Payable (g) $ 119,200 07/15/2020 11/04/2020 321 % $ — $ — Note Payable (h) $ 74,950 08/21/2020 11/28/2020 343 % $ — $ — Note Payable (i) $ 199,500 10/01/2020 09/28/2021 66 % $ 149,573 $ — Note Payable (j) $ 126,000 11/03/2020 04/23/2021 168 % $ 85,050 $ — Note Payable (k) $ 113,980 11/04/2020 03/15/2021 210 % $ 65,988 $ — Subtotal $ 447,455 $ 537,392 Debt discount $ (63,075 ) $ (69,239 ) Balance, net $ 384,380 $ 468,153 Less current portion $ (384,380 ) $ (468,153 ) Total long-term $ — $ — ** Currently in default a) On January 8, 2020, the Company sold future receivables with a non-related party for up to $87,540. During the period $25,782 was sold, of which $10,207 was loan fees and original issue discount resulting in cash proceeds to the Company of $15,575. The advance was repaid through $1,450 weekly payments. In connection with the advance, the Company granted the lender a security interest in all accounts, equipment, intangibles and inventory. This note was repaid during the during the year ended December 31, 2020. b) On February 19, 2020, the Company sold future receivables with a non-related party for $33,660, of which $13,710 was loan fees and original issue discount resulting in cash proceeds to the Company of $19,950. The advance was repaid through $660 daily payments. In connection with the advance, the Company granted the lender a security interest in all accounts, equipment, intangibles and inventory. This note was repaid during the year ended December 31, 2020. c) On February 28, 2020, the Company entered into a promissory note with a non-related party for $20,000. The note was due May 28, 2020, is unsecured and bears an interest rate of 8% per annum. On May 5, 2020, the Company consolidated this note with two others as described in Note 6(e). d) On March 31, 2020, the Company entered into a promissory note with a non-related party for $100,000. The note was due August 1, 2020, is unsecured and bears interest at $2,500 per month, repayable in four monthly payments of $27,500 commencing May 1, 2020. Additionally, the Company issued the lender 250,000 shares of the Company’s common stock with a fair market value of $8,225 as additional consideration for the loan. The note was repaid during the year ended December 31, 2020. e) On May 5, 2020, the Company consolidated three notes with principal amounts of $90,596, $17,500 and $20,000 as well as accrued interest into a new note with a principal amount of $118,644 and a maturity date of May 5, 2021. The note bears interest at 8% per annum and, in connection with the consolidation, the Company issued the lender 15,000,000 shares of the Company’s common stock with a fair value of $841,500. As the instruments were substantially different, the old notes were considered to be extinguished and the Company recognized a loss on settlement of debt of $826,500. f) On July 8, 2020, the Company entered into a promissory note with a non-related party for $150,000. The note was due October 5, 2020, is unsecured and bears an interest rate of 10% per annum. On August 27, 2020, the note was consolidated and replaced with the convertible note described in Note 6(y). g) On July 15, 2020, the Company sold future receivables with a non-related party for $119,200, of which $44,700 was loan fees and original issue discount resulting in cash proceeds to the Company of $74,500. The advance is repayable through $7,450 weekly payments. In connection with the advance, the Company granted the lender a security interest in all accounts, equipment, intangibles and inventory. The note was repaid during the year ended December 31, 2020. h) On August 21, 2020, the Company sold future receivables with a non-related party for $74,950, of which $26,945 was loan fees and original issue discount resulting in cash proceeds to the Company of $48,005. The advance is repayable through $1,071 daily payments. In connection with the advance, the Company granted the lender a security interest in all accounts, equipment, intangibles and inventory. The note was repaid during the year ended December 31, 2020. i) On October 1, 2020, the Company sold future receivables with a non-related party for $199,500, of which $53,250 was loan fees and original issue discount resulting in cash proceeds to the Company of $146,250. The advance is to be repaid through weekly payments of $3,841. In connection with the advance, the Company granted the lender a security interest and all past, present and future assets of the Company. During the year ended December 31, 2020, $22,608 of the discount was amortized to expense, leaving a net note balance of $118,931 (discount balance of $30,642). j) On November 3, 2020, the Company sold future receivables with a non-related party for $126,000, of which $39,650 was loan fees and original issue discount resulting in cash proceeds to the Company of $86,350. The advance is to be repaid through $1,050 daily payments. In connection with the advance, the Company granted the lender a security interest and all past, present and future assets of the Company. During the year ended December 31, 2020, $20,706 of the discount was amortized to expense, leaving a net note balance of $66,106 (discount balance of $18,944). k) On November 4, 2020, the Company sold future receivables with a non-related party for $113,980, of which $34,440 was loan fees and original issue discount resulting in cash proceeds to the Company of $79,540. The advance is to be repaid through $5,999 weekly payments. In connection with the advance, the Company granted the lender a security interest and all past, present and future assets of the Company. During the year ended December 31, 2020, $20,951 of the discount was amortized to expense, leaving a net note balance of $52,499 (discount balance of $13,489). The following table summarizes notes payable, related parties, as of December 31, 2020 and December 31, 2019: Type Original Amount Origination Date Maturity Date Annual Interest Rate Balance at December 31, 2020 Balance at December 31, 2019 Note Payable, RP ** $ 30,000 04/10/2018 01/15/2019 3 % $ 30,000 $ 30,000 Note Payable, RP ** $ 380,000 06/20/2018 01/02/2020 8 % $ 380,000 $ 380,000 Note Payable, RP ** $ 350,000 06/20/2018 01/02/2020 5 % $ 285,214 $ 325,000 Note Payable, RP ** $ 17,000 06/20/2018 01/02/2020 5 % $ 17,000 $ 17,000 Note Payable, RP ** $ 50,000 07/27/2018 11/30/2018 8 % $ 50,000 $ 50,000 Note Payable, RP $ 5,000 10/09/2018 Demand 0 % $ 5,000 $ 5,000 Note Payable, RP $ 5,000 10/19/2018 Demand 0 % $ 5,000 $ 5,000 Note Payable, RP ** $ 15,000 08/16/2019 02/16/2020 8 % $ 15,000 $ 15,000 Note Payable, RP (l) $ 1,500 02/11/2020 Demand 0 % $ — $ — Note Payable, RP (m) $ 2,000 02/11/2020 Demand 0 % $ 2,000 $ — Subtotal $ 789,214 $ 827,000 Debt discount $ — $ (43 ) Balance, net $ 789,214 $ 826,957 Less current portion $ (789,214 ) $ (826,957 ) Total long-term $ — $ — ** Currently in default l) On February 11, 2020, the Company entered into a promissory note with the Chairman and CEO of the Company for $1,500. The note is due on demand, is unsecured and bears an interest rate of 0% per annum. The note was repaid during the period. m) On February 11, 2020, the Company entered into a promissory note with the COO and Director of the Company for $2,000. The note is due on demand, is unsecured and bears an interest rate of 0% per annum. The following table summarizes convertible notes payable as of December 31, 2020 and December 31, 2019: Type Original Amount Origination Date Maturity Date Annual Interest Rate Balance at December 31, 2020 Balance at December 31, 2019 Convertible Note Payable (n) $ 50,000 12/06/2018 12/06/2019 12 % $ — $ 22,777 Convertible Note Payable * ** $ 65,000 12/06/2018 12/06/2019 12 % $ 46 $ 46 Convertible Note Payable (x) $ 100,000 01/18/2019 01/16/2020 24 % $ — $ 95,492 Convertible Note Payable (v) $ 60,000 01/29/2019 01/22/2020 18 % $ — $ 266,050 Convertible Note Payable (ff) $ 50,000 02/01/2019 10/22/2019 24 % $ — $ 154,330 Convertible Note Payable (s) $ 60,000 02/21/2019 02/14/2022 0 % $ — $ 74,000 Convertible Note Payable (z) $ 55,125 02/21/2019 02/20/2020 24 % $ — $ 42,125 Convertible Note Payable * ** $ 75,000 03/18/2019 12/13/2019 24 % $ 177,795 $ 232,814 Convertible Note Payable (s) $ 26,000 09/16/2019 09/11/2022 0 % $ — $ 26,000 Convertible Note Payable (o) $ 175,814 09/27/2019 09/25/2020 8 % $ — $ 175,814 Convertible Note Payable $ 53,000 10/08/2019 10/07/2020 12 % $ — $ 53,000 Convertible Note Payable $ 50,000 10/31/2019 10/29/2020 12 % $ — $ 50,000 Convertible Note Payable (p) $ 8,888 02/19/2020 02/18/2021 12 % $ — $ — Convertible Note Payable (q) * ** $ 30,000 03/06/2020 03/05/2021 12 % $ 21,662 $ — Convertible Note Payable (r) $ 45,000 03/09/2020 03/02/2021 12 % $ — $ — Convertible Note Payable (t) * ** $ 150,000 04/10/2020 04/09/2021 12 % $ 165,000 $ — Convertible Note Payable (u) $ 128,000 04/16/2020 04/09/2021 12 % $ — $ — Convertible Note Payable (w) $ 83,000 05/12/2020 11/08/2021 12 % $ — $ — Convertible Note Payable (y) ** $ 300,000 08/27/2020 07/31/2021 12 % $ 300,000 $ — Convertible Note Payable (aa) $ 53,500 09/22/2020 03/21/2022 12 % $ 53,500 $ — Convertible Note Payable (bb) $ 87,500 09/24/2020 Demand 8 % $ 40,000 $ — Convertible Note Payable (cc) $ 200,000 10/07/2020 10/06/2021 5 % $ 200,000 $ — Convertible Note Payable (dd) $ 200,000 10/16/2020 10/15/2021 5 % $ 200,000 $ — Convertible Note Payable (ee) $ 300,000 11/11/2020 11/10/2021 5 % $ 300,000 $ — Convertible Note Payable (gg) $ 150,000 12/29/2020 12/28/2021 5 % $ 150,000 $ — Subtotal $ 1,608,003 $ 1,192,448 Debt discount $ — $ (4,815 ) Balance, net $ 1,608,003 $ 1,187,633 Less current portion $ (1,554,503 ) $ (1,187,633 ) Total long-term $ 53,500 $ — * Embedded conversion feature accounted for as a derivative liability at period end n) During the year ended December 31, 2020, $22,777 of principal and $4,007 of interest of the convertible note payable was converted into 37,005,272 shares of the Company’s common stock. o) On February 7, 2020, the Company extinguished both promissory note (totaling $39,000) and convertible note (totaling $181,000), including accrued interest with a non-related party through the issuance of 220,000 shares of preferred series C stock. The Company recorded the difference between the fair value of the preferred series C stock of $264,000 and the debt outstanding of $220,000 as a loss on extinguishment of debt of $44,000. p) On February 19, 2020, the Company received another tranche on a convertible note originally dated December 6, 2018. The new tranche had a principal amount of $8,888, with an original issue discount of $888. The convertible note is due 365 days from issuance, bears interest at 12% per annum and is convertible into common shares of the Company at 65% multiplied by the lowest traded price or lowest closing bid price during the 25 days the Company’s stock is tradable prior to the conversion date. Further, if at any time the stock price is less than $0.30, an additional 20% discount is applied and if at any time the conversion price is less than $0.01, an additional 10% is applied. Further, an additional 15% is applied if the Company fails to comply with its reporting requirements. During the period, all these additional discounts were triggered. The embedded conversion option qualified for derivative accounting and bifurcation under ASC 815-15. The initial fair value of the conversion feature was $70,719 and resulted in a discount to the note payable of $8,000 and an initial derivative expense of $62,719. During the year ended December 31, 2020, the entire amount was repaid. q) On March 6, 2020, the Company received another tranche on a convertible note originally dated December 6, 2018. The new tranche had a principal amount of $30,000, with an original issue discount of $4,000. The convertible note is due 365 days from issuance, bears interest at 12% per annum and is convertible into common shares of the Company at 65% multiplied by the lowest traded price or lowest closing bid price during the 25 days the Company’s stock is tradable prior to the conversion date. Further, if at any time the stock price is less than $0.30, an additional 20% discount is applied and if at any time the conversion price is less than $0.01 an additional 10% is applied. Further, an additional 15% is applied if the Company fails to comply with its reporting requirements. During the period, all these additional discounts were triggered. The embedded conversion option qualified for derivative accounting and bifurcation under ASC 815-15. The initial fair value of the conversion feature was $391,837 and resulted in a discount to the note payable of $26,000 and an initial derivative expense of $365,837. During the year ended December 31, 2020, $8,338 of principal and $500 of interest of a convertible note payable was converted into 1,000,000 shares of the Company’s common stock. r) On March 9, 2020, the Company entered into a convertible promissory note with a non-related party for $45,000, of which $3,000 was an original issue discount resulting in cash proceeds to the Company of $42,000. The note is due on March 2, 2021 and bears interest on the unpaid principal balance at a rate of 12% per annum. Stringent pre-payment terms apply (from 15% to 40%, dependent upon the timeframe of repayment during the note’s term) and any part of the note which is not paid when due shall bear interest at the rate of 22% per annum from the due date until paid. The Note may be converted by the Lender at any time after 180 days of the date of issuance into shares of Company’s common stock at a conversion price equal to 61% of the lowest trading price during the 15-trading day period prior to the conversion date. The note was repaid prior to becoming convertible, and no derivative liability was recorded. s) On April 1, 2020, the Company entered into a settlement agreement to settle two convertible notes with remaining principal amounts $74,000 and $26,000. Pursuant to the settlement agreement, the Company agreed to pay $100,000 to settle the principal and accrued interest and penalties relating to the two convertible notes. As a result, the Company recorded a gain on settlement of debt of $312,269. t) On April 10, 2020, the Company entered into a convertible promissory note with a non-related party for $150,000, of which $18,000 was an original issue discount resulting in cash proceeds to the Company of $132,000. The note is due on April 9, 2021 and bears interest on the unpaid principal balance at a rate of 12% per annum. The Note may be converted by the Lender at any time into shares of Company’s common stock at a conversion price equal to 65% of the lowest trading price during the 25-trading day period prior to the conversion date. Further, if at any time the stock price is less than $0.30, an additional 20% discount is applied and if at any time the conversion price is less than $0.01 an additional 10% is applied. Further, an additional 15% is applied if the Company fails to comply with its reporting requirements. During the period, all these additional discounts were triggered. The embedded conversion option qualified for derivative accounting and bifurcation under ASC 815-15. The initial fair value of the conversion feature was $507,847 and resulted in a discount to the note payable of $132,000 and an initial derivative expense of $375,847. During the year ended December 31, 2020, the Company incurred $15,000 of penalties which increased the principal amount of the note to $165,000. u) On April 16, 2020, the Company entered into a convertible promissory note with a non-related party for $128,000, of which $3,000 was an original issue discount resulting in cash proceeds to the Company of $125,000. The note is due on April 9, 2021 and bears interest on the unpaid principal balance at a rate of 12% per annum. Stringent pre-payment terms apply (from 15% to 40%, dependent upon the timeframe of repayment during the note’s term) and any part of the note which is not paid when due shall bear interest at the rate of 22% per annum from the due date until paid. The Note may be converted by the Lender at any time after 180 days of the date of issuance into shares of Company’s common stock at a conversion price equal to 61% of the lowest trading price during the 15-trading day period prior to the conversion date. The note was repaid prior to becoming convertible, and no derivative liability was recorded. v) On May 11, 2020, the Company entered into a settlement agreement to settle a convertible note with a principal balance of $266,050 and accrued interest balance of $573,933. Pursuant to the settlement agreement, the Company agreed to pay $100,000 to settle the principal and accrued interest and penalties relating to the convertible note. As a result, the Company recorded a gain on settlement of debt of $2,273,770. w) On May 12, 2020, the Company entered into a convertible promissory note with a non-related party for $83,000, of which $3,000 was an original issue discount resulting in cash proceeds to the Company of $80,000. The note is due on November 8, 2021 and bears interest on the unpaid principal balance at a rate of 12% per annum. Stringent pre-payment terms apply (from 15% to 40%, dependent upon the timeframe of repayment during the note’s term) and any part of the note which is not paid when due shall bear interest at the rate of 22% per annum from the due date until paid. The Note may be converted by the Lender at any time after 180 days of the date of issuance into shares of Company’s common stock at a conversion price equal to 61% of the lowest trading price during the 15-trading day period prior to the conversion date. The note was repaid prior to becoming convertible, and no derivative liability was recorded. x) On August 18, 2020, the Company entered into a settlement agreement to settle a convertible note with a principal balance of $100,479 and accrued interest balance of $228,661. Pursuant to the settlement agreement, the Company agreed to pay $140,000 in four monthly installments of $35,000 commencing August 19, 2020 and ending November 19, 2020 to settle the principal and accrued interest and penalties relating to the convertible note. As a result, the Company recorded a gain on extinguishment of debt of $500,565. During the year ended December 31, 2020, $4,562 of principal and $191 of interest of the convertible note payable was converted into 5,281,088 shares of the Company’s common stock. y) On August 27, 2020, the Company executed a new, consolidated convertible note with a non-related party by extinguishing the promissory note in the amount of $150,000 with interest due of $2,055. The new convertible note is in the amount of $300,000 (an additional $150,000 received), is due on or before July 31, 2021, has a 12% per annum interest rate and may be converted into shares of the Company’s common stock at $0.05 per share. According to the terms of the agreement, the Company is to make $75,000 quarterly payments at the end of each calendar quarter, with a ten-day grace period or the note becomes in default. The Company also issued warrants to purchase 5,000,000 shares of common stock at an exercise price of $0.06 for a term of 5 years. If at any time the convertible note becomes in default (failure to pay a scheduled payment), the number of warrants shall automatically be increased to 200% of the original warrants. The warrants qualified for derivative liability classification, and the Company calculated the fair value of the warrants on issuance at $196,765. The Company recognized a loss on settlement of the nonconvertible note of $196,765. On October 10, 2020, the Company failed to make the first $75,000 quarterly payment, with a ten-day grace period. As a result, the convertible became due immediately, and the warrants increased from 5,000,000 to 10,000,000. z) On September 3, 2020, the Company entered into a settlement agreement to settle a convertible note with a principal balance of $39,170 and accrued interest balance of $12,831. Pursuant to the settlement agreement, the Company agreed to pay $100,000 in four monthly installments of $25,000 commencing September 8, 2020 and ending December 8, 2020 to settle the principal and accrued interest and penalties relating to the convertible note. As a result, the Company recorded a loss on extinguishment of debt of $10,273. During the year ended December 31, 2020, $7,168 of principal of the convertible note payable was converted into 8,000,000 shares of the Company’s common stock. aa) On September 22, 2020, the Company entered into a convertible promissory note with a non-related party for $53,500, of which $3,500 was an original issue discount resulting in cash proceeds to the Company of $50,000. The note is due on March 21, 2022 and bears interest on the unpaid principal balance at a rate of 12% per annum. Stringent pre-payment terms apply (from 15% to 40%, dependent upon the timeframe of repayment during the note’s term) and any part of the note which is not paid when due shall bear interest at the rate of 22% per annum from the due date until paid. The Note may be converted by the Lender at any time after 180 days of the date of issuance into shares of Company’s common stock at a conversion price equal to 61% of the lowest trading price during the 15-trading day period prior to the conversion date. As the note is not convertible until 180 days following issuance, no derivative liability was recognized as of December 31, 2020. bb) On September 24, 2020, a non-related promissory noteholder assigned its promissory note to a different non-related party. The balance of the note assigned was $87,500. On September 25, 2020, the Company amended a promissory note to add a conversion feature making the note convertible at $0.001 per share, with all other terms remaining the same. As the instruments were substantially different, the promissory note was considered to be extinguished. As a result, the Company recorded a loss on extinguishment of debt of $3,298,750. During the year ended December 31, 2020, $47,500 of principal of the convertible note payable was converted into 47,500,000 shares of the Company’s common stock. cc) On October 7, 2020, the Company entered into a convertible promissory note with a non-related party for $200,000. The note is due on October 6, 2021 and bears interest on the unpaid principal balance at a rate of 5% per annum. The Note may be converted by the Lender at any time after 6-months of the date of issuance into shares of Company’s common stock at a conversion price of $0.20. dd) On October 16, 2020, the Company entered into a convertible promissory note with a non-related party for $200,000. The note is due on October 15, 2021 and bears interest on the unpaid principal balance at a rate of 5% per annum. The Note may be converted by the Lender at any time after 6-months of the date of issuance into shares of Company’s common stock at a conversion price of $0.20. ee) On November 11, 2020, the Company entered into a convertible promissory note with a non-related party for $300,000. The note is due on November 10, 2021 and bears interest on the unpaid principal balance at a rate of 5% per annum. The Note may be converted by the Lender at any time after 6-months of the date of issuance into shares of Company’s common stock at a conversion price of $0.15. ff) On November 20, 2020, the Company entered into a settlement agreement to settle a convertible note with a remaining principal amount of $154,330 and accrued interest balance of $166,932. Pursuant to the settlement agreement, the Company agreed to issue 15,000,000 common shares with a fair value of $309,000 to settle the principal and accrued interest and penalties relating to the convertible note. As a result, the Company recorded a gain on settlement of debt of $1,362,268. gg) On December 29, 2020, the Company entered into a convertible promissory note with a non-related party for $150,000. The note is due on December 28, 2021 and bears interest on the unpaid principal balance at a rate of 5% per annum. The Note may be converted by the Lender at any time after 6-months of the date of issuance into shares of Company’s common stock at a conversion price of $0.10. |
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
DERIVATIVE LIABILITIES | NOTE 7 – DERIVATIVE LIABILITIES The embedded conversion option of (1) the convertible debentures described in Note 6 and (2) warrants, containing conversion features that qualify for embedded derivative classification as described further in Note 10. The fair value of the liabilities will be re-measured at the end of every reporting period and the change in fair value will be reported in the statement of operations as a gain or loss on derivative financial instruments. Upon the issuance of the convertible notes payable described in Note 6, the Company concluded that it only has sufficient shares to satisfy the conversion of some but not all of the outstanding convertible notes, warrants and options. The Company elected to reclassify contracts from equity with the earliest inception date first. As a result, none of the Company’s previously outstanding convertible instruments qualified for derivative reclassification, however, any convertible securities issued after the election, including the warrants described in Note 10, qualified for derivative classification. The Company reassesses the classification of the instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities. December 31, 2020 December 31, 2019 Balance at the beginning of period $ 10,517,873 $ 322,976 Original discount limited to proceeds of convertible notes 166,000 540,750 Change in fair value of embedded conversion feature 5,424,692 12,912,201 Settlement of derivative instruments (4,876,287 ) (3,258,054 ) Balance at the end of the period $ 11,429,043 $ 10,517,873 The Company uses Level 3 inputs for its valuation methodology for the embedded conversion features and warrant liabilities as their fair values were determined by using the Binomial Model based on various assumptions. Significant changes in any of these inputs in isolation would result in a significant change in the fair value measurement. As required, these are classified based on the lowest level of input that is significant to the fair value measurement. The following table shows the assumptions used in the calculations: Expected Volatility Risk-free Interest Rate Expected Dividend Yield Expected Life (in years) At issuance 212-358 % 0.25-1.47 % 0 % 1.00-5.00 At December 31, 2020 121-262 % 0.10-0.36 % 0 % 0.25-4.65 |
STOCKHOLDERS' DEFICIT AND STOCK
STOCKHOLDERS' DEFICIT AND STOCK OPTIONS | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
STOCKHOLDERS' DEFICIT AND STOCK OPTIONS | NOTE 8 - STOCKHOLDERS’ DEFICIT Preferred Stock Effective March 23, 2018, the Company amended the articles of incorporation and authorized 10,000,000 shares of preferred stock with a par value of $0.001 per share. The preferred stock may be issued from time to time by the Board of Directors as shares of one or more classes or series, as summarized below. Series A Preferred Shares Effective March 23, 2018, the Company amended the articles of incorporation and authorized 10,000,000 shares of preferred stock with a par value of $0.001 per share, of which 1,000,000 shares were designated as Series A Convertible Preferred Stock as of December 31, 2019. The preferred stock may be issued from time to time by the Board of Directors as shares of one or more classes or series. On December 1, 2018, the Company’s Board of Directors authorized an offering for 1,000,000 Preferred Series “A” stock at $0.10 per share and with 100% regular or cashless exercise at $0.10 per share of common stock warrant coverage. At December 31, 2018, the Company received $60,000 of subscriptions for the issuance of 600,000 shares of Preferred Series “A” stock to three accredited investors who are related parties. The Company was unable to issue the subscriber the preferred shares until the Company filed a Certificate of Designation and the Preferred Series “A” stock has been duly validly authorized. Resulting in a preferred stock liability related to the Company’s commitment to issue shares of Series A stock upon the designation. On April 12, 2019, the Company filed a Certificate of Designation with the Nevada Secretary of State designating 1,000,000 shares of its authorized preferred stock as Series A Convertible Preferred Stock. The principal terms of the Series A Preferred Shares are as follows: Issue Price The stated price for the Series A Preferred shall be $0.10 per share. Redemption This Company may at any time following the first anniversary date of issuance (the “Redemption Date”), at the option of the Board of Directors, redeem in whole or in part the Shares by paying in cash in exchange for the Shares to be redeemed a price equal to the Original Series A Issue Price ($0.10) (the “Redemption Price”). Any redemption affected pursuant to this provision shall be made on a pro rata basis among the holders of the Shares in proportion to the number of the shares then held by them. Dividends None. Preference of Liquidation In the event of any liquidation, dissolution or winding up of the Company, the holders of Shares shall be entitled to receive, prior and in preference to any distribution of any of the assets of this Company, to the holders of Common Stock by reason of their ownership thereof, an amount per share equal to the sum of (i) $0.10 for each outstanding Share (the “Original Series A Issue Price”) and (ii) an amount equal to 6% of the Original Series A Issue Price for each 12 months that has passed since the date of issuance of any Shares (such amount being referred to herein as the “Premium”). For purposes of this provision, a liquidation, dissolution or winding up of this Company shall be deemed to be occasioned by, or to include, (A) the acquisition of the Company by another entity by means of any transaction or series of related transactions (including, without limitation, any reorganization, merger or consolidation but, excluding any merger effected exclusively for the purpose of changing the domicile of the Company); or (B) a sale of all or substantially all of the assets of the Company; unless the Company’s stockholders of record as constituted immediately prior to such acquisition or sale will, immediately after such acquisition or sale (by virtue of securities issued as consideration for the Company’s acquisition or sale or otherwise), hold at least 50% of the voting power of the surviving or acquiring entity. If upon the occurrence of such liquidation, dissolution or winding up event, the assets and funds thus distributed among the holders of the Shares shall be insufficient to permit the payment to such holders of the full aforesaid preferential amounts, then, subject to the rights of series of preferred stock that may from time to time come into existence, the entire assets and funds of the Company legally available for distribution shall be distributed ratably among the holders of the Shares in proportion to the preferential amount each such holder is otherwise entitled to receive. In any of such liquidation, dissolution or winding up event, if the consideration received by the Company is other than cash, its value will be deemed its fair market value. Any securities shall be valued as follows: Securities not subject to investment letter or other similar restrictions on free marketability (covered by (B) below): 1) If traded on a securities exchange (NASDAQ, AMEX, NYSE, etc.), the value shall be deemed to be the average of the closing prices of the securities on such exchange over the thirty-day period ending three (3) days prior to the closing; 2) If traded on a quotation system, such as the OTC:QX, OTC:QB or OTC Pink Sheets, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the thirty-day period ending three (3) days prior to the closing; and 3) If there is no active public market, the value shall be the fair market value thereof, as mutually determined by the Company and the holders of at least a majority of the voting power of all then outstanding shares of Preferred Stock. The method of valuation of securities subject to investment letter or other restrictions on free marketability (other than restrictions arising solely by virtue of a stockholder’s status as an affiliate or former affiliate) shall be to make an appropriate discount from the market value determined as above in (A) (1), (2) or (3) to reflect the approximate fair market value thereof, as mutually determined by the Company and the holders of at least a majority of the voting power of all then outstanding shares of such Preferred Stock. Voting The holder of each Share shall not have any voting rights, except in the case of voting on a change in the preferences of Shares. Conversion Each Share shall be convertible into shares of the Company’s Common Stock at a price per share of $0.10 (1 Share converts into 1 share of Common Stock), at the option of the holder thereof, at any time following the date of issuance of such Share and on or prior to the fifth day prior to the Redemption Date, if any, as may have been fixed in any Redemption Notice with respect to the Shares, at the office of this Company or any transfer agent for such stock. Each Share shall automatically be converted into shares of Common Stock on the first day of the thirty-sixth (36th) month following the original issue date of the shares at the Conversion Price per share. The Company was unable to issue the subscribers the preferred shares until the Company filed a Certificate of Designation and the Preferred Series “A” stock had been duly validly authorized. As the Company had not filed the Certificate of Designation and as the Company could not issue the preferred shares to settle the proceeds received, it was determined the subscriptions were settleable in cash. As a result, the Company classified the subscriptions received as a liability in accordance with ASC 480 Distinguishing Liabilities from Equity. The filing of the Certificate of Designation and issuance of the preferred shares resulted in the reclassification of the Series A Preferred Shares from a liability to temporary equity or “mezzanine” because the preferred shares include the liquidation preferences described above. The fair value of the preferred series A stock on April 12, 2019 was $60,398 and was valued by using the Binomial Model based on various assumptions and was reclassified from a liability to mezzanine equity. As of December 31, 2020 and 2019, there were 500,000 shares of Series A Convertible Preferred Stock issued and outstanding, respectively. Series B Preferred Shares Effective August 13, 2019, the Company filed a Certificate of Designation with the Nevada Secretary of State thereby designating 1,000,000 shares of its authorized preferred stock as Series B –Preferred Stock. The principal terms of the Series B Preferred Shares are as follows: Voting Rights Holders of the Series B Preferred Stock shall be entitled to cast five hundred (500) votes for each share held of the Series B Preferred Stock on all matters presented to the stockholders of the Corporation for stockholder vote which shall vote along with holders of the Corporation’s Common Stock on such matters. Redemption Rights The Series B Preferred Stock shall be redeemed by the Corporation upon the successful receipt by the Corporation of at least $1,000,000 in equity capital following the issuance of the Series B Preferred Stock. To date the Company has received $500,500 of equity capital, and upon the receipt of an additional $499,500 in equity capital the redemption right will be triggered. Conversion Rights The Series B Preferred Stock is not convertible into shares of Common Stock of the Corporation. Protective Provisions So long as any shares of Series B Preferred Stock are outstanding, this Corporation shall not without first obtaining the approval (by vote or written consent, as provided by law) of the Holders of the Series B Preferred Stock which is entitled, other than solely by law, to vote with respect to the matter, and which Preferred Stock represents at least a majority of the voting power of the then outstanding shares of such Series B Preferred Stock: a) sell, convey, or otherwise dispose of or encumber all or substantially all of its property or business or merge into or consolidate with any other corporation (other than a wholly owned subsidiary corporation) or effect any transaction or series of related transactions in which more than fifty percent (50%) of the voting power of the Corporation is disposed of; b) alter or change the rights, preferences or privileges of the shares of Series B Preferred Stock so as to affect adversely the shares; c) increase or decrease (other than by redemption or conversion) the total number of authorized shares of preferred stock; d) authorize or issue, or obligate itself to issue, any other equity security, including any other security convertible into or exercisable for any equity security (i) having a preference over, or being on a parity with, the Series B Preferred Stock with respect to dividends or upon liquidation, or (ii) having rights similar to any of the rights of the Series B Preferred Stock; or e) amend the Corporation’s Articles of Incorporation or bylaws. Dividends None. Preference of Liquidation None. Upon designation, the Company issued 500,000 shares of the Series B preferred stock to each of its current CEO/Chairman and COO/Director (1,000,000 shares in total) pursuant to their employment agreements. As the Series B Preferred Shares represent share-based payments that are not classified as liabilities but that could require the employer to redeem the equity instruments for cash or other assets, the Company classified the initial redemption amount of the shares of $158,247 as temporary equity or “mezzanine”. As of December 31, 2020 and 2019, there were 1,000,000 shares of Series B Preferred Stock issued and outstanding, respectively. Series C Preferred Shares Pursuant to the September 18, 2019 majority consent of stockholders in lieu of an annual meeting (including the consent of the Series A Convertible Preferred Stockholders), the Registrant filed a Certificate of Designation with the Nevada Secretary of State designating 5,500,000 shares of its authorized preferred stock as Series C Convertible Preferred Stock. The Registrant is awaiting the file stamped Certificate of Designation from the Nevada Secretary of State. The rights and preferences of such preferred stock are as follows: The number of shares constituting the Series C Convertible Preferred Stock shall be 5,500,000. Such number of shares may be increased or decreased by resolution of the Board of Directors, provided that no decrease shall reduce the number of shares of Series C Convertible Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Company convertible into Series C Convertible Preferred Stock. Conversion Rights Each Share shall be convertible into shares of the Company’s Common Stock at a price per share of $0.01 (1 Share converts into 100 shares of Common Stock) (the “Conversion Price”), at the option of the holder thereof, at any time following the date of issuance of such Share and on or prior to the fifth (5th) day prior to the redemption Date, if any, as may have been fixed in any redemption notice with respect to the Shares, at the office of this Company or any transfer agent for such stock. Voting Rights The holder of each Share shall not have any voting rights, except in the case of voting on a change in the preferences of Shares. Protective Provisions So long as any Shares are outstanding, this Company shall not without first obtaining the approval (by vote or written consent, as provided by law) of the holders of Shares which is entitled, other than solely by law, to vote with respect to the matter, and which Shares represents at least a majority of the voting power of the then outstanding Shares: a) sell, convey, or otherwise dispose of or encumber all or substantially all of its property or business or merge into or consolidate with any other corporation (other than a wholly owned subsidiary corporation) or effect any transaction or series of related transactions in which more than fifty percent (50%) of the voting power of the Company is disposed of; b) alter or change the rights, preferences or privileges of the Shares so as to affect adversely the Shares; c) increase or decrease (other than by redemption or conversion) the total number of authorized shares of preferred stock; d) authorize or issue, or obligate itself to issue, any other equity security, including any other security convertible into or exercisable for any equity security (i) having a preference over, or being on a parity with, the Shares with respect to liquidation, or (ii) having rights similar to any of the rights of the Preferred Stock; or e) amend the Company’s Articles of Incorporation or bylaws. Other Rights There are no other rights, privileges or preferences attendant or relating to in any way the Shares, including by way of illustration but not limitation, those concerning dividend, ranking, other conversion, other redemption, participation or anti-dilution rights or preferences. As conversion of the Series C Preferred Shares is not within the control of the Company, and it is not certain that the Company could satisfy its obligation to deliver shares upon conversion, the Series C Preferred Shares were classified in temporary equity or “mezzanine”. On February 7, 2020, the Company extinguished a promissory note and convertible note, including accrued interest, through the issuance of 220,000 shares of preferred series C stock. The Company recorded the difference between the fair value of the preferred series C stock of $264,000 and the debt outstanding of $220,000 as a loss on extinguishment of debt of $44,000 as described further in Note 6(o). During the period ended December 31, 2020, the Company sold 270,000 shares of preferred series C stock for proceeds of $270,000. The preferred series C stock sold during the period contained a beneficial conversion feature as the conversion price was less than the fair value of the common stock, which the instrument is then convertible at the commitment date. During the year ended December 31, 2020, the intrinsic value of the 270,000 shares sold was $270,000. As the preferred series C stock have no stated maturity date and are convertible at any time, the discount created in the preferred series C stock is fully amortized at issuance as a deemed dividend. During the year ended December 31, 2020, 450,000 shares of preferred series C stock, with a value of $494,000, were converted into common stock (1 share converts into 100 shares of common stock), resulting in the issuance of 45,000,000 shares of common stock. At December 31, 2020, there were 40,000 Series C Preferred Shares issued and outstanding (2019 – Nil), valued at $1 per share or $40,000. Common Stock Effective March 23, 2018, the Company amended the Articles of Incorporation and increased the authorized shares of common stock with a par value of $0.001 per share from 100,000,000 to 300,000,000 shares. Effective October 4, 2019, the Company amended the Articles of Incorporation and increased the authorized shares of common stock with a par value of $0.001 per share from 300,000,000 to 1,000,000,000 shares. The number of shares outstanding of the registrant’s common stock as of December 31, 2020 and 2019 was 722,487,846 and 498,880,300, respectively. During the year ended December 31, 2020, $22,777 of principal and $4,007 of interest of a convertible note payable was converted into 37,005,272 shares of the Company’s common stock as further described in Note 6(n). During the year ended December 31, 2020, $47,500 of principal of a convertible note payable was converted into 47,500,000 shares of the Company’s common stock as further described in Note 6(bb). During the year ended December 31, 2020, the Company issued 9,246,186 shares of common stock upon the cashless exercise of 9,280,742 warrants. During the year ended December 31, 2020, 450,000 shares of preferred series C stock with a value of $494,000 was converted into common stock (1 share converts into 100 shares of common stock), resulting in the issuance of 45,000,000 shares of common stock. On January 1, 2020, the Company issued 15,000,000 fully vested shares of the Company’s common stock to Gary J. Grieco, its CEO and Chairman, pursuant to an employment agreement. The Company recorded the fair value of the common shares of $99,000 as stock-based compensation. On May 20, 2020, the Company entered into a consulting agreement. Pursuant to the agreement, the consultant will provide advisory services through September 20, 2020 in consideration of 150,000 shares of common stock. The fair value of the common stock was $5,880, which was recognized in consulting expenses for the year ended December 31, 2020. On March 31, 2020, the Company issued 250,000 shares of common stock pursuant to a loan agreement. The Company recorded the fair value of the common shares as $8,225 in interest expense. On April 27, 2020, the Company issued 1,000,000 shares of common stock to an employee of the Company for cash proceeds of $10,000, pursuant to a stock subscription agreement. On April 27, 2020, the Company issued 2,750,000 shares of common stock for cash proceeds of $110,000, pursuant to a stock subscription agreement. On May 5, 2020, the Company issued 15,000,000 shares of common stock, with a fair value of $841,500, as part of the note extinguishment and consolidation agreement described in Note 6(e). On May 19, 2020, the Company issued 500,000 shares of common stock for cash proceeds of $20,000, pursuant to a stock subscription agreement. On July 1, 2020, the Company entered into a consulting agreement. Pursuant to the agreement, the consultant will provide advisory services through December 31, 2021 in consideration of 8,000,000 shares of common stock. The fair value of the common stock was $307,200 of which $99,915 was recognized in consulting expenses for the year ended December 31, 2020, with the remainder as prepaid assets for future services. On July 6, 2020, the Company entered into a consulting agreement. Pursuant to the agreement, the consultant will provide investor relations services for a period of one year in consideration for $3,000 per month and the issuance of 1,000,000 shares of common stock. The fair value of the common stock was $36,000 of which $17,556 was recognized in consulting expenses for the year ended December 31, 2020 with the remainder in prepaid assets for future services. On July 8, 2020, the Company entered into a consulting agreement. Pursuant to the agreement, the consultant will provide operational business development for a period of five years and introductory services in consideration for the issuance of 1,000,000 fully-vested shares of common stock and a 5% commission, payable in cash, for any product sales brokered. The fair value of the common stock was $36,500 which was recognized in consulting expenses. On August 14, 2020, $4,562 of principal and $191 of interest of a convertible note payable was converted into 5,281,088 shares of the Company’s common stock as further described in Note 6(x). On September 2, 2020, $7,168 of principal of a convertible note payable was converted into 8,000,000 shares of the Company’s common stock as further described in Note 6(z). On September 29, 2020, $8,338 of principal and $500 of interest of a convertible note payable was converted into 1,000,000 shares of the Company’s common stock as further described in Note 6(q). On October 6, 2020, the Company issued 3,500,000 shares of common stock for proceeds of $70,000, pursuant to a stock subscription agreement. On October 7, 2020, the Company entered into a consulting agreement. Pursuant to the agreement, the consultant will provide advisory services for a period of five months in consideration of 5,000,000 shares of common stock. The fair value of the common stock was $134,500 of which $75,713 was recognized in consulting expenses for the year ended December 31, 2020, with the remainder as prepaid assets for future services. On November 20, 2020, the Company issued 15,000,000 shares of common stock with a fair value of $309,000 to settle the principal, accrued interest, and penalties relating to the convertible note described in Note 6(ff). On December 23, 2020, the Company issued 2,050,000 shares of common stock for proceeds of $20,500, pursuant to a stock subscription agreement. On January 1, 2019, the Company entered into a four-year employment agreement with F. Jody Read in his role as Chief Executive Officer. The terms of the contract call for an annual salary of $90,000 for the first year, effective March 1, 2019 and increasing to $120,000 once the Company’s revenue exceeds monthly expenses, then incrementally over time and with certain operational results, up to $200,000/year. The salary may be paid, at the employee’s discretion, either in cash or in common stock. A $1,000 per month allowance will be granted to the executive for housing near the Company’s South Carolina facility. The employment agreement awards the CEO 1,500,000 restricted shares of the Company’s restricted stock, which shall vest in the following manner: 375,000 shares on March 1, 2019, 375,000 shares on March 1, 2020; 375,000 shares on March 1, 2021; and the final 375,000 shares on March 1, 2022. On October 4, 2019, F. Jody Read resigned from the position of CEO and moved back into the role of COO. On January 1, 2019, the fair value of the restricted stock award totaled $240,000 which will be expensed over vesting period. As of December 31, 2020, 750,000 (2019 - 375,000) shares were issued and the Company had recognized $173,767 (2019 - $116,728) of expense. During the year ended December 31, 2019, convertible note holders converted their debt into 410,433,964 shares of the Company’s common stock. During the year ended December 31, 2019, the Company issued 24,928,288 shares of common stock upon the cashless exercise of 18,585,714 warrants. On March 25, 2019, the Company issued 200,000 shares of common stock to two employees of the Company as compensation in lieu of commission on sales of the Company’s products. The Company recorded the fair value of the common shares of $34,000 in consulting expense. On March 29, 2019, the Company executed a settlement agreement with a contractual consultant, UCAP Partners, LLC for the settlement of $25,000 owed to the contractor for the provision of services as related to the March 15, 2018 agreement with UCAP. The settlement terms include acknowledgement that the Company owes UCAP $25,000 as payment for said services; that UCAP purchased and fully paid for Series A Preferred Stock and Warrants from the Company on December 3, 2018 (100,000 Preferred Series A Shares and 100,000 warrants to purchase common shares at $0.10/share); the settlement is outlined as follows: the Company shall issue 164,000 shares of its common stock as payment in full for the services rendered on the consulting contract; the Company shall accept UCAP’s conversion and exercise of the purchased 100,000 Preferred Series A shares into 100,000 shares of the Company’s common stock and the Company shall accept the cashless conversion of UCAP’s 100,000 warrant into 34,400 shares of the Company’s restricted common stock; and, as inducement for and consideration for the settlement of the Company’s debt to UCAP, the Company agrees to grant 500,000 additional shares of the Company’s restricted stock. As a result of this transaction, 798,400 shares of Company’s common stock were issued and a $55,830 loss on settlement of debt was recognized. On August 1, 2019, the Company entered into a consulting agreement for investor relations services through December 31, 2019. The agreement called for 1,000,000 restricted shares of common stock to be issued to the consultant. As of December 31, 2019, the Company recorded the fair value of the shares of $15,000 for the consulting expense related to the consulting services provided. On October 1, 2019, the Company entered into a consulting agreement for investor relations services through March 31, 2020. The agreement called for a cash payment of $25,000 and 12,000,000 restricted shares of common stock to be issued to the consultant. As of December 31, 2019, the Company recorded the fair value of the shares of $61,200, of which $30,600 was recognized in consulting expense for the year ended December 31, 2019, with the remaining amount of $30,600 recognized during the year ended December 31, 2020. NOTE 9 – STOCK OPTIONS The Company did not grant any stock options during the year ended December 31, 2019 or the year ended December 31, 2020. Below is a table summarizing the options issued and outstanding as of December 31, 2020: Number of Weighted average exercise price Balance, December 31, 2019 200,000 2.00 Granted — — Expired — — Settled — — Balance, December 31, 2020 200,000 2.00 As at December 31, 2020, the following stock options were outstanding: Date Number Number Exercise Weighted Average Remaining Contractual Expiration Proceeds to Company if Issued Outstanding Exercisable Price $ Life (Years) Date Exercised 01/26/2017 200,000 200,000 2.00 1.07 01/26/2022 400,000 200,000 200,000 $ 400,000 The weighted average exercise prices are $2.00 for the options outstanding and exercisable, respectively. The intrinsic value of stock options outstanding at December 31, 2020 was $Nil. |
WARRANTS
WARRANTS | 12 Months Ended |
Dec. 31, 2020 | |
Guarantees and Product Warranties [Abstract] | |
WARRANTS | NOTE 10 – WARRANTS During the year ended December 31, 2019, the Company issued 487,500 warrants subject to an exercise price of $0.20 per share for 5 years and 300,000 warrants subject to an exercise price of $0.10 per share for 5 years. If the Company issues any common stock or common stock equivalents at an effective price per share less than the warrant’s exercise price, the exercise price of the warrants will be reduced to the lower price. In addition, the number of common shares issuable upon conversion of the warrants is increased so that the number of shares issuable multiplied by the exercise price equals the aggregate exercise price of the warrants immediately prior to the exercise reduction. During period, convertible notes were exercised at a price less than the original exercise price of these warrants, resulting in an adjustment to the number of warrants and exercise price. Following these adjustments 393,618,843 warrants were outstanding subject to an exercise price of $0.00035 and 53,571,429 warrants were outstanding subject to an exercise price of $0.00056. On August 27, 2020, as part of the convertible note financing described in Note 6(y), the Company issued warrants to purchase 5,000,000 shares of common stock at an exercise price of $0.06 for a term of 5 years. On October 10, 2020, the Company failed to make a required repayment of the note and as a result, the warrants increased from 5,000,000 to 10,000,000. The Company concluded that it only has sufficient shares to satisfy the conversion of some but not all of the outstanding convertible instruments. The initial fair value of the warrants issued during the period was calculated using the Binomial Model as described in Note 7. The following table summarizes the continuity of share purchase warrants: Number of Weighted average exercise price Balance, December 31, 2019 413,816,252 0.00053 Adjustment to warrants outstanding 48,154,762 0.00673 Granted 5,000,000 0.06 Settled (9,280,742 ) 0.00035 Balance, December 31, 2020 457,690,272 0.00179 As at December 31, 2020, the following share purchase warrants were outstanding: Date Number Number Exercise Weighted Average Remaining Contractual Expiration Proceeds to Company if Issued Outstanding Exercisable Price $ Life (Years) Date Exercised 11/28/2018 142,857,143* 142,857,143* 0.00035 * 0.91 11/28/2021 $ 50,000 12/03/2018 500,000 500,000 0.10 2.92 12/03/2023 50,000 02/14/2019 143,618,843* 143,618,843* 0.00035 * 3.12 02/14/2024 50,267 03/13/2019 107,142,857* 107,142,857* 0.00035 * 3.20 03/13/2024 37,500 09/11/2019 53,571,429* 53,571,429* 0.00056 * 3.70 09/11/2024 30,000 08/26/2020 10,000,000** 10,000,000** 0.06 4.65 08/26/2025 600,000 457,690,272 457,690,272 $ 817,767 *The number of warrants outstanding and exercisable is variable based on adjustments to the exercise price of the warrant due to dilutive issuances. **An additional 5,000,000 warrants were issued, according to the terms of the agreement, due to the Company defaulted on a convertible note payable with the warrant holder. The intrinsic value of warrants outstanding at December 31, 2020 was $9,670,419. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 11 – RELATED PARTY TRANSACTIONS The Company has agreements with related parties for consulting services, accrued rent, accrued interest, notes payable and stock options. See Notes to Financial Statements numbers 6, 8, 9 and 12 for more details. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 12 – COMMITMENTS AND CONTINGENCIES Consulting Agreements On October 1, 2019, the Company entered into a consulting agreement for investor relations services through March 31, 2020. The agreement called for a cash payment of $25,000 and 12,000,000 restricted shares of common stock to be issued to the consultant. As of December 31, 2019, the Company recorded the fair value of the shares of $61,200 for the consulting expense related to the consulting services provided. At December 31, 2019, $30,600 was recorded as prepaid expenses. The expense was recognized over the service period, ending on March 31, 2020. In addition to contracts for service, the Company also regularly uses the professional services of securities attorneys, a US EPA specialist, professional accountants and other public company specialists. Employment Agreements – On January 1, 2019, the Company entered into a four-year employment agreement with F. Jody Read in his role as Chief Executive Officer. The terms of the contract call for an annual salary of $90,000 for the first year, effective March 1, 2019 and increasing to $120,000 once the Company’s revenue exceeds monthly expenses, then incrementally over time and with certain operation results, up to $200,000/year. The salary may be paid, at the employee’s discretion, either in cash or in common stock. A $1,000 per month allowance will be granted to the executive for housing near the Company’s South Carolina facility. The employment agreement awards the CEO 1,500,000 restricted shares of the Company’s restricted stock, which shall vest in the following manner: 375,000 shares on March 1, 2019, 375,000 shares on March 1, 2020, 375,000 shares on March 1, 2021 and the final 375,000 shares on March 1, 2022. 375,000 shares vested on March 1, 2020 and another 375,000 shares vested on March 1, 2021. On August 12, 2019, the Company amended the employment contract with F. Jody Read, CEO, whereby 500,000 Preferred Series B shares were issued to Read. On October 4, 2019, F. Jody Read resigned from the position of CEO and moved back into the role of COO. All other terms of the January 1, 2019 employment agreement remain in effect. On August 12, 2019, the Company entered into a four-year employment agreement with Gary J. Grieco, its President, whereby Mr. Grieco will continue to receive $24,000 per year for services to the Company as its President and whereby 500,000 preferred series B stock were issued to Grieco. The employment agreement begins on August 12, 2019, and is automatically renewable for two years unless terminated earlier as per the terms of the agreement. Gary Grieco entered the role of CEO of the Company upon F. Jody Read’s resignation on October 4, 2019 and entered into a four-year employment agreement with the Company on January 1, 2020. Pursuant to the agreement, Mr. Grieco will receive $48,000 per year commencing April 1, 2020 and receive 15,000,000 shares of the Company’s common stock for services to the Company as its President and CEO. In addition, once monthly revenue exceeds monthly expenses, the salary will be increased and Mr. Grieco will be issued an additional 10,000,000 shares of the Company’s common stock. The employment agreement begins on January 1, 2020 and is automatically renewable for two years unless terminated earlier as per the terms of the agreement. Legal Proceedings and Status – Annihilare Litigation On August 8, 2019, we received notice from Annihilare Medical Systems, Inc (“Annihilare”) that certain intellectual properties developed jointly between us and Annihilare were to be discontinued from use by us and our customers. We dispute the claims from Annihilare that the intellectual properties are exclusively Annihilare’s. In May of 2020, we filed a complaint in the United States District Court for the Western District of North Carolina (Charlotte Divisions – Civil Action No. 3:20-cv-00287), against Annihilare, Marion E. Paris, Jr. and Clay Parker Sipes, seeking damages. These claims arise from several consulting agreements and an acquisition agreement between the Company and the Defendants surrounding the purchase of Annihilyzer® Intellectual property by the Company and subsequent infringement of the intellectual properties. Subsequent to the period end, the legal proceedings were settled. Other Obligations and Commitments – On March 20, 2020, the Company entered into a consulting agreement. Pursuant to the agreement, the consultant will provide investor relations services for a period of nine months. The Company issued the consultant 150,000 shares of common stock. On May 25, 2020, the Company entered into an agreement with PCT Europe to create an exclusive trading partnership within the United Kingdom and five European territories. The intention is for the Company to acquire a 25% equity stake in PCT Europe. In the event that a potential customer approaches the Company with an opportunity in the specified territories the Company will pass the opportunity onto PCT Europe. Subsequent to the period, the Company has yet finalized the negotiations with PCT (Europe) LTD, and has not received, its 25% ownership position of PCT (Europe) LTD; therefore, such ownership position, while intended, has not been finalized. PCT (Europe) LTD is currently performing testing of the Company’s infection control system in a “live ward” scenario in the United Kingdom. On July 1, 2020, the Company entered into a consulting agreement. Pursuant to the agreement, the consultant will provide advisory services through December 31, 2021 in consideration of 8,000,000 shares of common stock. The fair value of the common stock was $307,200 of which $99,915 was recognized in consulting expenses for the year ended December 31, 2020, with the remainder in prepaid expenses for future services. On July 6, 2020, the Company entered into a consulting agreement. Pursuant to the agreement, the consultant will provide investor relations services for a period of one year in consideration for $3,000 per month and the issuance of 1,000,000 shares of common stock. The fair value of the common stock was $36,000 of which $17,556 was recognized in consulting expenses for the year ended December 31, 2020 with the remainder in prepaid expenses for future services. On July 8, 2020, the Company entered into a consulting agreement. Pursuant to the agreement, the consultant will provide operational business development for a period of five years and introductory services in consideration for the issuance of 1,000,000 fully-vested shares of common stock and a 5% commission, payable in cash, for any product sales brokered. The fair value of the common stock was $36,500 which was recognized in consulting expenses. On August 26, 2020, the Company signed a new one-year lease for the Company headquarters and operations located in Little River, South Carolina. The lease was effective retroactively from July 1, 2020, ending on June 30, 2021, for $7,500 per month. The Company has an option to renew the lease for an additional four years. On October 7, 2020, the Company entered into a services agreement with a consultant for services for a period of six months. In consideration for services, the Company issued 5,000,000 shares of common stock. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 13 – There was no provision for, or benefit from, income tax during the years ended December 31, 2020 and 2019 respectively. The Company was subject to United States federal and state income taxes at an approximate rate of 21% for the year ended December 31, 2020. The components of the net deferred tax asset as of December 31, 2020 and 2019: For the year ended December 31, 2020 2019 Net operating loss carry forwards $ 7,798,197 $ 6,089,157 Stock/options issued for services (512,905 ) (370,925 ) Stock/options issued for acquisitions (106,856 ) (106,856 ) Loss on settlement of debt 1,080 (14,220 ) Contributed services (77,997 ) (77,997 ) Depreciation and amortization (319,583 ) (246,353 ) Meals and Entertainment (1,809 ) (1,809 ) Loss on change in fair value of conversion features (3,897,570 ) (2,758,381 ) Accretion of discount on convertible note (261,170 ) (170,340 ) Loss on preferred share liability (2,490 ) (2,490 ) Valuation allowance $ (2,618,097 ) $ (2,339,786 ) Net Deferred Tax Asset $ — $ — Federal and state net operating loss carry forwards at December 31, 2020 were $10,222,362. The net operating loss carry forwards expire between 2033 and 2040. The following is a reconciliation of the amount of benefit that would result from applying the federal statutory rate to pretax loss with the provision for income taxes for the years ended December 31, 2020 and 2019, respectively: For the Years Ended December 31, 2020 2019 Book income (loss) from operations $ (1,709,040 ) $ (3,481,498 ) Stock/options issued for services 141,980 47,650 Depreciation and amortization 73,230 70,990 Meals and entertainment — — Loss on settlement of debt (15,300 ) 14,220 Loss on change in fair value of conversion feature 1,139,190 2,711,560 Accretion of discount on convertible note 91,630 157,700 Preferred share liability loss — (15,220 ) Change in valuation allowance 278,310 494,598 Provision for Income Taxes $ — $ — In June 2006, FASB issued FASB ASC 740-10-05-6. The Company adopted FASB ASC 740-10-05-6 on January 1, 2013. Under FASB ASC 740-10-05-6, tax benefits are recognized only for the tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon ultimate settlement. Unrecognized tax benefits are tax benefits claimed in the Company's tax return that do not meet these recognition and measurement standards. Upon the adoption of FASB ASC 740-10-05-6, the Company had no liabilities for unrecognized tax benefits and, as such, the adoption had no impact on its financial statements, and the Company has recorded no additional interest or penalties. The Adoption of FASB ASC 740-10-05-6 did not impact the Company's effective tax rates. The Company's policy is to recognize potential interest and penalties accrued related to unrecognized tax benefits with the income tax expense. For the years ended December 31, 2020, and 2019, the Company did not recognize any interest or penalties in its Statement of Operations, nor did it have any interest or penalties accrued in its Balance Sheet at December 31, 2020 and 2019 relating to unrecognized benefits. The tax years 2020 and 2019 remain open to examination for federal income tax purposes and by other major taxing jurisdictions to which the Company is subject. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 14. SUBSEQUENT EVENTS On January 4, 2021, the Company issued 25,000,000 common shares to settle a convertible note described in Note 6(bb), with a remaining balance of $40,000. On January 27, 2021, the Company entered into a convertible promissory note with a non-related party for $150,000. The note is due on January 26, 2022 and bears interest on the unpaid principal balance at a rate of 5% per annum. The note may be converted by the lender at any time before 6-months of the date of issuance into shares of Company’s common stock at a conversion price equal to $0.10. On February 2, 2021, the Company sold future receivables with a non-related party for $177,800, of which $35,994 was applied to previous loans owing to the lender and $39,795 was loan fees and original issue discount resulting in cash proceeds to the Company of $102,011. The advance is to be repaid through weekly payments of $7,730. In connection with the advance, the Company granted the lender a security interest in all past, present and future assets of the Company. On February 16, 2021, the Company issued 1,803,279 shares of common stock to settle $247,270 from a $275,000 note payable dated June 20, 2018, which has a balance of $331,304, including interest, to the current Chairman and CEO of the Company. The Company also agreed to issue a new note for the remaining balance owed to the Chairman and CEO of $84,034, dated February 16, 2021. The note will bear interest at 5% per annum and is due on June 30, 2021. On February 16, 2021, the Company issued 2,663,299 shares of common stock to settle a June 20, 2018 note payable of $380,000 and accrued interest of $77,229 owed to the current COO and Director of the Company. On February 15, 2021, 40,000 shares of preferred series C stock was converted into common stock (1 share converts into 100 shares of common stock), resulting in the issuance of 4,000,000 shares of common stock. On February 23, 2021, the Company entered into a convertible promissory note with a non-related party for $128,000, of which $3,000 was an original issue discount resulting in cash proceeds to the Company of $125,000. The note is due on February 22, 2022 and bears interest on the unpaid principal balance at a rate of 12% per annum. Stringent pre-payment terms apply (from 15% to 40%, dependent upon the timeframe of repayment during the note’s term) and any part of the note which is not paid when due shall bear interest at the rate of 22% per annum from the due date until paid. The Note may be converted by the Lender at any time after 180 days of the date of issuance into shares of Company’s common stock at a conversion price equal to 61% of the lowest trading price during the 15-trading day period prior to the conversion date. On March 1, 2021, the Company released an additional vested 375,000 shares of common stock to its current COO and Director, as per the Company employment agreement with the executive. On March 1, 2021, the Company entered into a consulting agreement. Pursuant to the agreement, the consultant will provide advisory services for a period of three months in consideration of $5,000 per month and an option to purchase 2,500,000 shares of common stock at $0.0001 for one year, exercisable on issuance. On March 9, 2021, the Company sold future receivables with a non-related party for $522,640, of which $146,640 was loan fees, original issue discount and reserve resulting in cash proceeds to the Company of $376,000. The advance is to be repaid through daily payments of $2,999. The Company only received $22,766, net of fees, from the lender. On March 22, 2021, the Company cancelled this future receivables contract through total payments of $28,764 to the lender. On March 9, 2021, the Company sold future receivables with a non-related party for $111,920, of which $35,145 was loan fees and original issue discount resulting in cash proceeds to the Company of $76,775. The advance is to be repaid through daily payments of $1,399. In connection with the advance, the Company granted the lender a security interest in all past, present and future assets of the Company. On March 18, 2021, the Company entered into a convertible promissory note with a non-related party for $200,000. The note is due on March 17, 2022 and bears interest on the unpaid principal balance at a rate of 5% per annum. The note may be converted by the lender at any time before 6-months of the date of issuance into shares of Company’s common stock at a conversion price equal to $0.10. On March 23, 2021, the Company amended the convertible note described in Note 6(y). Pursuant to the amendment, the Company repaid $20,000 of principal and $17,457 of interest and the maturity date will be extended to April 15, 2021. |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of Operations PCT LTD (formerly Bingham Canyon Corporation, (the “Company,” “PCT LTD,” or “Bingham”), a Delaware corporation, was formed on February 27, 1986. The Company changed its domicile to Nevada on August 26, 1998. The Company acquires, develops and provides sustainable, environmentally safe disinfecting, cleaning and tracking technologies. The Company specializes in providing cleaning, sanitizing and disinfectant fluid solutions and fluid-generating equipment that creates environmentally safe solutions for global sustainability. On August 31, 2016, the Company entered into a Securities Exchange Agreement with Paradigm Convergence Technologies Corporation (“Paradigm,” or “PCT Corp.”) to effect the acquisition of Paradigm as a wholly owned subsidiary. Under the terms of the agreement, Bingham issued 16,790,625 restricted common shares of Bingham stock to the shareholders of Paradigm in exchange for all 22,387,500 outstanding common shares of Paradigm stock. In addition, Bingham issued options exercisable into 2,040,000 shares of the Bingham’s common stock (with exercise prices ranging between $0.133 and $0.333) in exchange for 2,720,000 outstanding Paradigm stock options (with exercise prices ranging between $0.10 and $0.25). These 2,040,000 options have been adjusted at the same exchange rate of 75% that the outstanding common shares were exchanged. As a result of this share exchange agreement, Paradigm, the operating company, is considered the accounting acquirer. Paradigm is located in Little River, SC and was formed June 6, 2012 under the name of EUR-ECA, Ltd. On September 11, 2015, its Board of Directors authorized EUR-ECA Ltd. to file with the Nevada Secretary of State to change its name to Paradigm Convergence Technologies Corp. Paradigm is a technology licensing company specializing in environmentally safe solutions for global sustainability. The company holds a patent, intellectual property and/or distribution rights to innovative products and technologies. Paradigm provides innovative products and technologies for eliminating biocidal contamination from water supplies, industrial fluids, hard surfaces, food-processing equipment and medical devices. Paradigm’s overall strategy is to market new products and technologies through the use of equipment leasing, joint ventures, licensing, distributor agreements and partnerships. Effective on February 29, 2018, the Company changed its name from Bingham Canyon Corporation to PCT LTD to more accurately identify the Company’s direction and to develop the complementary relationship and association with its wholly owned operating company, Paradigm Convergence Technologies Corporation (“Paradigm” or “PCT Corp.”). |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of PCT LTD (“Parent”) and its wholly owned subsidiary, Paradigm Convergence Technologies Corporation (“Paradigm” or “Subsidiary”). All intercompany accounts have been eliminated upon consolidation. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting periods. Estimates are based on historical experience and on various other market-specific and other relevant assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents are considered to be cash and highly liquid securities with original maturities of three months or less. The cash of $115,196 and $67,613 as of December 31, 2020 and December 31, 2019, respectively, represents cash on deposit in various bank accounts. There were no cash equivalents as of December 31, 2020 and December 31, 2019. |
Fair Value Measurements | Fair Value Measurements The Company follows ASC 820, “ Fair Value Measurements and Disclosures • Level 1 - Valuations for assets and liabilities traded in active markets from readily available pricing sources such as quoted prices in active markets for identical assets or liabilities. • Level 2 - Observable inputs (other than Level 1 quoted prices) such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. • Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cashflow methodologies and similar techniques. The carrying values of our financial instruments, including cash and cash equivalents, accounts receivable, inventory, prepaid expenses, accounts payable and accrued expenses approximate their fair value due to the short maturities of these financial instruments. Derivative liabilities are determined based on “Level 3” inputs, which are significant and unobservable and have the lowest priority. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations. Our financial assets and liabilities carried at fair value measured on a recurring basis as of December 31, 2020, consisted of the following: Total fair value at Quoted prices in active markets Significant other observable inputs Significant unobservable inputs Description: Derivative liability (1) 11,429,043 — — 11,429,043 Total 11,429,043 — — 11,429,043 Our financial assets and liabilities carried at fair value measured on a recurring basis as of December 31, 2019, consisted of the following: Total fair value at Quoted prices in active markets Significant other observable inputs Significant unobservable inputs Description: Derivative liability (1) 10,517,873 — — 10,517,873 Total 10,517,873 — — 10,517,873 (1) The Company has estimated the fair value of these liabilities using the Binomial Model. |
Derivative Liabilities | Derivative Liabilities The Company accounts for derivative instruments in accordance with ASC Topic 815, “ Derivatives and Hedging Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial statement. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. See Note 7 for additional information. |
Sequencing Policy | Sequencing Policy Under ASC 815-40-35, the Company has adopted a sequencing policy whereby, in the event that reclassification of contracts from equity to assets or liabilities is necessary pursuant to ASC 815 due to the Company’s inability to demonstrate it has sufficient authorized shares as a result of certain securities with a potentially indeterminable number of shares, shares will be allocated on the basis of the earliest issuance date of potentially dilutive instruments with the earliest grants receiving the first allocation of shares. Pursuant to ASC 815, issuance of securities to the Company’s employees or directors is not subject to the sequencing policy. |
Accounts Receivable | Accounts Receivable Trade accounts receivable are recorded at the time product is shipped or services are provided including any shipping and handling fees. The Company provided allowances for uncollectible accounts receivable equal to the estimated collection losses that will be incurred in collection of all receivables. Accounts receivable is periodically evaluated for collectability basis on past credit history with customers and their current financial condition. The Company’s management determines which accounts are past due and if deemed uncollectible, the Company charges off the receivable in the period the determination is made. Based on management’s evaluation, the Company provided an allowance for doubtful accounts of $61,825 and $16,250 at December 31, 2020 and December 31, 2019, respectively. |
Inventories | Inventories |
Property and Equipment | Property and Equipment Property and equipment are stated at purchased cost and depreciated utilizing a straight-line method over estimated useful lives ranging from 3 to 7 years after the asset has been placed in service. Upon selling equipment that had been under a lease agreement, the Company discontinues the depreciation on that piece of equipment, as it transfers ownership to another entity. Additions and major improvements that extend the useful lives of property and equipment are capitalized. Maintenance and repairs are charged to operations as incurred. Upon trade-in, sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts, and any related gains or losses are recorded in the results of operations. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets The carrying values of the Company’s long-lived assets are reviewed for impairment annually and whenever events or changes in circumstances indicate that they may not be recoverable. When projections indicate that the carrying value of the long-lived asset is not recoverable, the carrying value is reduced by the estimated excess of the carrying value over the fair value. An impairment charge is recognized if the carrying amount is not recoverable and the carrying amount exceeds the fair value of the long-lived assets as determined by projected discounted net future cashflows. The recorded impairment expense was $0 for the years ended December 31, 2020 and December 31, 2019, respectively. |
Intangible Assets | Intangible Assets Costs to obtain or develop patents are capitalized and amortized over the remaining life of the patents, and technology rights are amortized over their estimated useful lives. The Company currently has the right to several patents and proprietary technology. Patents and technology are amortized from the date the Company acquires or is awarded the patent or technology right over their estimated useful lives, which range from 1 to 15 years. |
Research and Development | Research and Development Research and development costs are recognized as an expense during the period incurred, which is until the conceptual formulation, design and testing of a process is completed and the process has been determined to be commercially viable. |
Leases | Leases In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, “ Leases ASC 842 requires lessors to expense costs that are not direct leasing costs, to continually assess collectability of lessee payments, and if operating lease payments are not probable of collection, to only recognize into income equal to the lesser of (i) straight-line rental income or (ii) lease payments received to date. |
Revenue Recognition | Revenue Recognition On May 2014, the FASB issued ASU No. 2014-09, “ Revenue from Contracts with Customers” (Topic 606) The Company recognizes revenue based on the five criteria for revenue recognition established under Topic 606: 1) identify the contract, 2) identify separate performance obligations, 3) determine the transaction price, 4) allocate the transaction price among the performance obligations, and 5) recognize revenue as the performance obligations are satisfied. The Company has the following three revenue streams: 1) Product sales (equipment and/or fluid solutions): Contracts for product sales consist of invoices that specify the transaction price. The only performance commitment is the provision of products and the transaction price is allocated to the products specified on the invoice. The Company recognizes revenue from the sale of products when the performance obligation is satisfied by transferring control of the product to a customer. 2) Licensing: The Company licenses a contract-based use of the Company’s US EPA Product Registration, returning revenue in licensing fees and/or royalties from minimum or actual fluid sales. The Contract specifies the term, fees and/or royalty. Performance obligations include the provision of a sub-registration to use the US EPA Product Registration and/or the provision of a license to use the product for a period of time. The Company allocates the transaction price based on the relative standalone, selling price of each performance obligation. The Company’s licenses provide a right-to-use and create performance obligations, satisfied at a point in time. The Company recognizes revenue from licenses when the performance obligation is satisfied through the transfer of the license. For licenses that include royalties, the Company will recognize royalty revenue as the underlying sales or usages occur, as long as this approach does not result in the acceleration of revenue ahead of the entity’s performance. 3) Equipment leases: Contracts for equipment leases are systems service agreements, usually 3-year contracts for the provision of the Company’s equipment, and service of such, under contract to customers, with renewable terms. The performance obligation consists of the provision of with leased equipment. The Company recognizes revenue from the leasing of equipment as the entity provides the equipment and the customer simultaneously receives and consumes the benefits through the use of the equipment. This revenue-generating activity would meet the criteria for a performance obligation satisfied over time. As a result, the Company recognizes revenue over time by using the output method, as the Company can measure progress of the performance obligation using the time elapsed under each obligation. Additionally, under ASC 842, lessors are required to continually assess collectability of lessee payments, and if operating lease payments are not probable of collection, to only recognize into income equal to the lesser of (i) straight-line rental income or (ii) lease payments received to date. The Company has disclosed disaggregated revenue via revenue stream on the face of the statement of operations. The Company did not have any contract assets or liabilities at December 31, 2020 or 2019, respectively. For the year ended December 31, 2020, three customers accounted for 41%, 19% and 10%, respectively, of consolidated revenues for the period. For the year ended December 31, 2019, four customers accounted for 27%, 16%, 15%, and 13%, respectively, of consolidated revenues for the period. |
Stock Based Compensation | Stock Based Compensation The Company records stock-based compensation in accordance with ASC 718. Under the provisions of ASC 718, stock-based compensation expense is measured at the grant date, based on the fair value of the award, and is recognized over the requisite service period, which is generally the vesting period. The fair value of our stock options and warrants is estimated using a Black-Scholes option valuation model. Refer to Notes 9 and 10 for further details. |
Income Taxes | Income Taxes Deferred income taxes are provided on a liability method, whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards. Deferred tax liabilities are recognized for taxable temporary differences, which are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. |
Basic and Diluted Loss per Share | Basic and Diluted Loss Per Share Basic loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted loss per share is computed by dividing net loss by the weighted-average number of common shares and dilutive potential common shares outstanding during the period. As of December 31, 2020, there were outstanding common share equivalents (options, warrants, convertible debt, preferred series A stock, and preferred series C stock) which amounted to 599,906,324 shares of common stock. These common share equivalents were not included in the computation of diluted loss per share as their effect would have been anti-dilutive. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2018, the FASB issued Accounting Standards Update No. 2018-13 (“ASU 2018-13”), Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements relating to fair value measurements as outlined in Topic 820, Fair Value Measurement. ASU 2018-13 is applicable to all entities that are required, under GAAP, to make disclosures about recurring or nonrecurring fair value measurements. The amendments outlined in ASU 2018-13 are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted for any removed or modified disclosures upon issuance of ASU 2018-13. The adoption of ASU 2018-13 did not have a material effect on the consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40)” (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP. The ASU’s amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company is currently evaluating the impact ASU 2020-06 will have on its financial statements. |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Financial assets and liabilities carried at fair value | Total fair value at Quoted prices in active markets Significant other observable inputs Significant unobservable inputs Description: Derivative liability (1) 11,429,043 — — 11,429,043 Total 11,429,043 — — 11,429,043 Total fair value at Quoted prices in active markets Significant other observable inputs Significant unobservable inputs Description: Derivative liability (1) 10,517,873 — — 10,517,873 Total 10,517,873 — — 10,517,873 (1) The Company has estimated the fair value of these liabilities using the Binomial Model. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | December 31, 2020 December 31, 2019 Leasehold improvements $ 18,840 $ 151,719 Machinery and leased equipment 365,483 — Machinery and equipment not yet in service 32,580 321,565 Office equipment and furniture 39,357 20,064 Website 2,760 2,760 Total property and equipment $ 459,020 $ 496,108 Less: Accumulated Depreciation (100,301 ) (55,999 ) Property and equipment, net 358,719 440,109 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Components of intangible assets | December 31, 2020 December 31, 2019 Patents $ 4,505,489 $ 4,505,489 Technology rights 200,000 200,000 Intangible, at cost 4,705,489 4,705,489 Less: Accumulated amortization (1,305,465 ) (1,001,060 ) Net Carrying Amount $ 3,400,024 $ 3,704,429 |
Estimated future amortization expense of intangible assets | $ For year ending December 31, 2021 302,003 For year ending December 31, 2022 302,003 For year ending December 31, 2023 302,003 For year ending December 31, 2024 302,003 For year ending December 31, 2025 302,003 Thereafter 1,890,009 Total 3,400,024 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Components of lease expenses, supplemental balance sheet, cashflow and other information related to leases | 2020 $ 2019 $ Total operating lease cost 10,458 52,800 The following table provides supplemental cashflow and other information related to leases for the year ended December 31, 2020 and 2019: 2020 $ 2019 $ Lease payments 9,000 52,800 Supplemental balance sheet information related to leases as of December 31, 2020 and 2019 are as below: 2020 $ 2019 $ Cost 123,614 43,330 Accumulated amortization (5,229) (43,330) Net carrying value 118,385 — |
Future minimum lease payments related to lease obligations | $ 2021 54,000 2022 54,000 2023 45,000 Total minimum lease payments 153,000 Less: amount of lease payments representing effects of discounting (34,615) Present value of future minimum lease payments 118,385 Less: current obligations under leases (34,965) Lease liabilities, net of current portion 83,420 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Notes payable | Type Original Amount Origination Date Maturity Date Effective Annual Interest Rate Balance at December 31, 2020 Balance at December 31, 2019 Note Payable ** $ 25,000 05/08/2017 06/30/2018 0 % $ 27,500 $ 27,500 Note Payable (bb) $ 130,000 06/20/2018 01/02/2020 8 % $ — $ 130,000 Note Payable ** $ 8,700 11/15/2018 06/30/2019 10 % $ 8,700 $ 8,700 Note Payable (e) $ 90,596 09/15/2019 05/28/2020 8 % $ — $ 90,596 Note Payable (o) $ 50,000 10/03/2019 04/03/2020 12 % $ — $ 37,500 Note Payable (e) $ 17,500 11/12/2019 11/12/2020 8 % $ — $ 17,500 Note Payable $ 83,400 12/20/2019 06/19/2020 150 % $ — $ 80,192 Note Payable $ 148,362 12/20/2019 11/27/2020 80 % $ — $ 145,404 Note Payable (a) $ 25,782 01/08/2020 05/13/2020 313 % $ — $ — Note Payable (b) $ 33,660 02/19/2020 04/30/2020 585 % $ — $ — Note Payable (c)(e) $ 20,000 02/28/2020 05/28/2020 8 % $ — $ — Note Payable (d) $ 100,000 03/31/2020 08/01/2020 30 % $ — $ — Note Payable (e) $ 118,644 05/05/2020 05/05/2021 8 % $ 110,644 $ — Note Payable (f)(y) $ 150,000 07/08/2020 10/05/2021 10 % $ — $ — Note Payable (g) $ 119,200 07/15/2020 11/04/2020 321 % $ — $ — Note Payable (h) $ 74,950 08/21/2020 11/28/2020 343 % $ — $ — Note Payable (i) $ 199,500 10/01/2020 09/28/2021 66 % $ 149,573 $ — Note Payable (j) $ 126,000 11/03/2020 04/23/2021 168 % $ 85,050 $ — Note Payable (k) $ 113,980 11/04/2020 03/15/2021 210 % $ 65,988 $ — Subtotal $ 447,455 $ 537,392 Debt discount $ (63,075 ) $ (69,239 ) Balance, net $ 384,380 $ 468,153 Less current portion $ (384,380 ) $ (468,153 ) Total long-term $ — $ — ** Currently in default a) On January 8, 2020, the Company sold future receivables with a non-related party for up to $87,540. During the period $25,782 was sold, of which $10,207 was loan fees and original issue discount resulting in cash proceeds to the Company of $15,575. The advance was repaid through $1,450 weekly payments. In connection with the advance, the Company granted the lender a security interest in all accounts, equipment, intangibles and inventory. This note was repaid during the during the year ended December 31, 2020. b) On February 19, 2020, the Company sold future receivables with a non-related party for $33,660, of which $13,710 was loan fees and original issue discount resulting in cash proceeds to the Company of $19,950. The advance was repaid through $660 daily payments. In connection with the advance, the Company granted the lender a security interest in all accounts, equipment, intangibles and inventory. This note was repaid during the year ended December 31, 2020. c) On February 28, 2020, the Company entered into a promissory note with a non-related party for $20,000. The note was due May 28, 2020, is unsecured and bears an interest rate of 8% per annum. On May 5, 2020, the Company consolidated this note with two others as described in Note 6(e). d) On March 31, 2020, the Company entered into a promissory note with a non-related party for $100,000. The note was due August 1, 2020, is unsecured and bears interest at $2,500 per month, repayable in four monthly payments of $27,500 commencing May 1, 2020. Additionally, the Company issued the lender 250,000 shares of the Company’s common stock with a fair market value of $8,225 as additional consideration for the loan. The note was repaid during the year ended December 31, 2020. e) On May 5, 2020, the Company consolidated three notes with principal amounts of $90,596, $17,500 and $20,000 as well as accrued interest into a new note with a principal amount of $118,644 and a maturity date of May 5, 2021. The note bears interest at 8% per annum and, in connection with the consolidation, the Company issued the lender 15,000,000 shares of the Company’s common stock with a fair value of $841,500. As the instruments were substantially different, the old notes were considered to be extinguished and the Company recognized a loss on settlement of debt of $826,500. f) On July 8, 2020, the Company entered into a promissory note with a non-related party for $150,000. The note was due October 5, 2020, is unsecured and bears an interest rate of 10% per annum. On August 27, 2020, the note was consolidated and replaced with the convertible note described in Note 6(y). g) On July 15, 2020, the Company sold future receivables with a non-related party for $119,200, of which $44,700 was loan fees and original issue discount resulting in cash proceeds to the Company of $74,500. The advance is repayable through $7,450 weekly payments. In connection with the advance, the Company granted the lender a security interest in all accounts, equipment, intangibles and inventory. The note was repaid during the year ended December 31, 2020. h) On August 21, 2020, the Company sold future receivables with a non-related party for $74,950, of which $26,945 was loan fees and original issue discount resulting in cash proceeds to the Company of $48,005. The advance is repayable through $1,071 daily payments. In connection with the advance, the Company granted the lender a security interest in all accounts, equipment, intangibles and inventory. The note was repaid during the year ended December 31, 2020. i) On October 1, 2020, the Company sold future receivables with a non-related party for $199,500, of which $53,250 was loan fees and original issue discount resulting in cash proceeds to the Company of $146,250. The advance is to be repaid through weekly payments of $3,841. In connection with the advance, the Company granted the lender a security interest and all past, present and future assets of the Company. During the year ended December 31, 2020, $22,608 of the discount was amortized to expense, leaving a net note balance of $118,931 (discount balance of $30,642). j) On November 3, 2020, the Company sold future receivables with a non-related party for $126,000, of which $39,650 was loan fees and original issue discount resulting in cash proceeds to the Company of $86,350. The advance is to be repaid through $1,050 daily payments. In connection with the advance, the Company granted the lender a security interest and all past, present and future assets of the Company. During the year ended December 31, 2020, $20,706 of the discount was amortized to expense, leaving a net note balance of $66,106 (discount balance of $18,944). k) On November 4, 2020, the Company sold future receivables with a non-related party for $113,980, of which $34,440 was loan fees and original issue discount resulting in cash proceeds to the Company of $79,540. The advance is to be repaid through $5,999 weekly payments. In connection with the advance, the Company granted the lender a security interest and all past, present and future assets of the Company. During the year ended December 31, 2020, $20,951 of the discount was amortized to expense, leaving a net note balance of $52,499 (discount balance of $13,489). Type Original Amount Origination Date Maturity Date Annual Interest Rate Balance at December 31, 2020 Balance at December 31, 2019 Note Payable, RP ** $ 30,000 04/10/2018 01/15/2019 3 % $ 30,000 $ 30,000 Note Payable, RP ** $ 380,000 06/20/2018 01/02/2020 8 % $ 380,000 $ 380,000 Note Payable, RP ** $ 350,000 06/20/2018 01/02/2020 5 % $ 285,214 $ 325,000 Note Payable, RP ** $ 17,000 06/20/2018 01/02/2020 5 % $ 17,000 $ 17,000 Note Payable, RP ** $ 50,000 07/27/2018 11/30/2018 8 % $ 50,000 $ 50,000 Note Payable, RP $ 5,000 10/09/2018 Demand 0 % $ 5,000 $ 5,000 Note Payable, RP $ 5,000 10/19/2018 Demand 0 % $ 5,000 $ 5,000 Note Payable, RP ** $ 15,000 08/16/2019 02/16/2020 8 % $ 15,000 $ 15,000 Note Payable, RP (l) $ 1,500 02/11/2020 Demand 0 % $ — $ — Note Payable, RP (m) $ 2,000 02/11/2020 Demand 0 % $ 2,000 $ — Subtotal $ 789,214 $ 827,000 Debt discount $ — $ (43 ) Balance, net $ 789,214 $ 826,957 Less current portion $ (789,214 ) $ (826,957 ) Total long-term $ — $ — ** Currently in default l) On February 11, 2020, the Company entered into a promissory note with the Chairman and CEO of the Company for $1,500. The note is due on demand, is unsecured and bears an interest rate of 0% per annum. The note was repaid during the period. m) On February 11, 2020, the Company entered into a promissory note with the COO and Director of the Company for $2,000. The note is due on demand, is unsecured and bears an interest rate of 0% per annum. Type Original Amount Origination Date Maturity Date Annual Interest Rate Balance at December 31, 2020 Balance at December 31, 2019 Convertible Note Payable (n) $ 50,000 12/06/2018 12/06/2019 12 % $ — $ 22,777 Convertible Note Payable * ** $ 65,000 12/06/2018 12/06/2019 12 % $ 46 $ 46 Convertible Note Payable (x) $ 100,000 01/18/2019 01/16/2020 24 % $ — $ 95,492 Convertible Note Payable (v) $ 60,000 01/29/2019 01/22/2020 18 % $ — $ 266,050 Convertible Note Payable (ff) $ 50,000 02/01/2019 10/22/2019 24 % $ — $ 154,330 Convertible Note Payable (s) $ 60,000 02/21/2019 02/14/2022 0 % $ — $ 74,000 Convertible Note Payable (z) $ 55,125 02/21/2019 02/20/2020 24 % $ — $ 42,125 Convertible Note Payable * ** $ 75,000 03/18/2019 12/13/2019 24 % $ 177,795 $ 232,814 Convertible Note Payable (s) $ 26,000 09/16/2019 09/11/2022 0 % $ — $ 26,000 Convertible Note Payable (o) $ 175,814 09/27/2019 09/25/2020 8 % $ — $ 175,814 Convertible Note Payable $ 53,000 10/08/2019 10/07/2020 12 % $ — $ 53,000 Convertible Note Payable $ 50,000 10/31/2019 10/29/2020 12 % $ — $ 50,000 Convertible Note Payable (p) $ 8,888 02/19/2020 02/18/2021 12 % $ — $ — Convertible Note Payable (q) * ** $ 30,000 03/06/2020 03/05/2021 12 % $ 21,662 $ — Convertible Note Payable (r) $ 45,000 03/09/2020 03/02/2021 12 % $ — $ — Convertible Note Payable (t) * ** $ 150,000 04/10/2020 04/09/2021 12 % $ 165,000 $ — Convertible Note Payable (u) $ 128,000 04/16/2020 04/09/2021 12 % $ — $ — Convertible Note Payable (w) $ 83,000 05/12/2020 11/08/2021 12 % $ — $ — Convertible Note Payable (y) ** $ 300,000 08/27/2020 07/31/2021 12 % $ 300,000 $ — Convertible Note Payable (aa) $ 53,500 09/22/2020 03/21/2022 12 % $ 53,500 $ — Convertible Note Payable (bb) $ 87,500 09/24/2020 Demand 8 % $ 40,000 $ — Convertible Note Payable (cc) $ 200,000 10/07/2020 10/06/2021 5 % $ 200,000 $ — Convertible Note Payable (dd) $ 200,000 10/16/2020 10/15/2021 5 % $ 200,000 $ — Convertible Note Payable (ee) $ 300,000 11/11/2020 11/10/2021 5 % $ 300,000 $ — Convertible Note Payable (gg) $ 150,000 12/29/2020 12/28/2021 5 % $ 150,000 $ — Subtotal $ 1,608,003 $ 1,192,448 Debt discount $ — $ (4,815 ) Balance, net $ 1,608,003 $ 1,187,633 Less current portion $ (1,554,503 ) $ (1,187,633 ) Total long-term $ 53,500 $ — * Embedded conversion feature accounted for as a derivative liability at period end n) During the year ended December 31, 2020, $22,777 of principal and $4,007 of interest of the convertible note payable was converted into 37,005,272 shares of the Company’s common stock. o) On February 7, 2020, the Company extinguished both promissory note (totaling $39,000) and convertible note (totaling $181,000), including accrued interest with a non-related party through the issuance of 220,000 shares of preferred series C stock. The Company recorded the difference between the fair value of the preferred series C stock of $264,000 and the debt outstanding of $220,000 as a loss on extinguishment of debt of $44,000. p) On February 19, 2020, the Company received another tranche on a convertible note originally dated December 6, 2018. The new tranche had a principal amount of $8,888, with an original issue discount of $888. The convertible note is due 365 days from issuance, bears interest at 12% per annum and is convertible into common shares of the Company at 65% multiplied by the lowest traded price or lowest closing bid price during the 25 days the Company’s stock is tradable prior to the conversion date. Further, if at any time the stock price is less than $0.30, an additional 20% discount is applied and if at any time the conversion price is less than $0.01, an additional 10% is applied. Further, an additional 15% is applied if the Company fails to comply with its reporting requirements. During the period, all these additional discounts were triggered. The embedded conversion option qualified for derivative accounting and bifurcation under ASC 815-15. The initial fair value of the conversion feature was $70,719 and resulted in a discount to the note payable of $8,000 and an initial derivative expense of $62,719. During the year ended December 31, 2020, the entire amount was repaid. q) On March 6, 2020, the Company received another tranche on a convertible note originally dated December 6, 2018. The new tranche had a principal amount of $30,000, with an original issue discount of $4,000. The convertible note is due 365 days from issuance, bears interest at 12% per annum and is convertible into common shares of the Company at 65% multiplied by the lowest traded price or lowest closing bid price during the 25 days the Company’s stock is tradable prior to the conversion date. Further, if at any time the stock price is less than $0.30, an additional 20% discount is applied and if at any time the conversion price is less than $0.01 an additional 10% is applied. Further, an additional 15% is applied if the Company fails to comply with its reporting requirements. During the period, all these additional discounts were triggered. The embedded conversion option qualified for derivative accounting and bifurcation under ASC 815-15. The initial fair value of the conversion feature was $391,837 and resulted in a discount to the note payable of $26,000 and an initial derivative expense of $365,837. During the year ended December 31, 2020, $8,338 of principal and $500 of interest of a convertible note payable was converted into 1,000,000 shares of the Company’s common stock. r) On March 9, 2020, the Company entered into a convertible promissory note with a non-related party for $45,000, of which $3,000 was an original issue discount resulting in cash proceeds to the Company of $42,000. The note is due on March 2, 2021 and bears interest on the unpaid principal balance at a rate of 12% per annum. Stringent pre-payment terms apply (from 15% to 40%, dependent upon the timeframe of repayment during the note’s term) and any part of the note which is not paid when due shall bear interest at the rate of 22% per annum from the due date until paid. The Note may be converted by the Lender at any time after 180 days of the date of issuance into shares of Company’s common stock at a conversion price equal to 61% of the lowest trading price during the 15-trading day period prior to the conversion date. The note was repaid prior to becoming convertible, and no derivative liability was recorded. s) On April 1, 2020, the Company entered into a settlement agreement to settle two convertible notes with remaining principal amounts $74,000 and $26,000. Pursuant to the settlement agreement, the Company agreed to pay $100,000 to settle the principal and accrued interest and penalties relating to the two convertible notes. As a result, the Company recorded a gain on settlement of debt of $312,269. t) On April 10, 2020, the Company entered into a convertible promissory note with a non-related party for $150,000, of which $18,000 was an original issue discount resulting in cash proceeds to the Company of $132,000. The note is due on April 9, 2021 and bears interest on the unpaid principal balance at a rate of 12% per annum. The Note may be converted by the Lender at any time into shares of Company’s common stock at a conversion price equal to 65% of the lowest trading price during the 25-trading day period prior to the conversion date. Further, if at any time the stock price is less than $0.30, an additional 20% discount is applied and if at any time the conversion price is less than $0.01 an additional 10% is applied. Further, an additional 15% is applied if the Company fails to comply with its reporting requirements. During the period, all these additional discounts were triggered. The embedded conversion option qualified for derivative accounting and bifurcation under ASC 815-15. The initial fair value of the conversion feature was $507,847 and resulted in a discount to the note payable of $132,000 and an initial derivative expense of $375,847. During the year ended December 31, 2020, the Company incurred $15,000 of penalties which increased the principal amount of the note to $165,000. u) On April 16, 2020, the Company entered into a convertible promissory note with a non-related party for $128,000, of which $3,000 was an original issue discount resulting in cash proceeds to the Company of $125,000. The note is due on April 9, 2021 and bears interest on the unpaid principal balance at a rate of 12% per annum. Stringent pre-payment terms apply (from 15% to 40%, dependent upon the timeframe of repayment during the note’s term) and any part of the note which is not paid when due shall bear interest at the rate of 22% per annum from the due date until paid. The Note may be converted by the Lender at any time after 180 days of the date of issuance into shares of Company’s common stock at a conversion price equal to 61% of the lowest trading price during the 15-trading day period prior to the conversion date. The note was repaid prior to becoming convertible, and no derivative liability was recorded. v) On May 11, 2020, the Company entered into a settlement agreement to settle a convertible note with a principal balance of $266,050 and accrued interest balance of $573,933. Pursuant to the settlement agreement, the Company agreed to pay $100,000 to settle the principal and accrued interest and penalties relating to the convertible note. As a result, the Company recorded a gain on settlement of debt of $2,273,770. w) On May 12, 2020, the Company entered into a convertible promissory note with a non-related party for $83,000, of which $3,000 was an original issue discount resulting in cash proceeds to the Company of $80,000. The note is due on November 8, 2021 and bears interest on the unpaid principal balance at a rate of 12% per annum. Stringent pre-payment terms apply (from 15% to 40%, dependent upon the timeframe of repayment during the note’s term) and any part of the note which is not paid when due shall bear interest at the rate of 22% per annum from the due date until paid. The Note may be converted by the Lender at any time after 180 days of the date of issuance into shares of Company’s common stock at a conversion price equal to 61% of the lowest trading price during the 15-trading day period prior to the conversion date. The note was repaid prior to becoming convertible, and no derivative liability was recorded. x) On August 18, 2020, the Company entered into a settlement agreement to settle a convertible note with a principal balance of $100,479 and accrued interest balance of $228,661. Pursuant to the settlement agreement, the Company agreed to pay $140,000 in four monthly installments of $35,000 commencing August 19, 2020 and ending November 19, 2020 to settle the principal and accrued interest and penalties relating to the convertible note. As a result, the Company recorded a gain on extinguishment of debt of $500,565. During the year ended December 31, 2020, $4,562 of principal and $191 of interest of the convertible note payable was converted into 5,281,088 shares of the Company’s common stock. y) On August 27, 2020, the Company executed a new, consolidated convertible note with a non-related party by extinguishing the promissory note in the amount of $150,000 with interest due of $2,055. The new convertible note is in the amount of $300,000 (an additional $150,000 received), is due on or before July 31, 2021, has a 12% per annum interest rate and may be converted into shares of the Company’s common stock at $0.05 per share. According to the terms of the agreement, the Company is to make $75,000 quarterly payments at the end of each calendar quarter, with a ten-day grace period or the note becomes in default. The Company also issued warrants to purchase 5,000,000 shares of common stock at an exercise price of $0.06 for a term of 5 years. If at any time the convertible note becomes in default (failure to pay a scheduled payment), the number of warrants shall automatically be increased to 200% of the original warrants. The warrants qualified for derivative liability classification, and the Company calculated the fair value of the warrants on issuance at $196,765. The Company recognized a loss on settlement of the nonconvertible note of $196,765. On October 10, 2020, the Company failed to make the first $75,000 quarterly payment, with a ten-day grace period. As a result, the convertible became due immediately, and the warrants increased from 5,000,000 to 10,000,000. z) On September 3, 2020, the Company entered into a settlement agreement to settle a convertible note with a principal balance of $39,170 and accrued interest balance of $12,831. Pursuant to the settlement agreement, the Company agreed to pay $100,000 in four monthly installments of $25,000 commencing September 8, 2020 and ending December 8, 2020 to settle the principal and accrued interest and penalties relating to the convertible note. As a result, the Company recorded a loss on extinguishment of debt of $10,273. During the year ended December 31, 2020, $7,168 of principal of the convertible note payable was converted into 8,000,000 shares of the Company’s common stock. aa) On September 22, 2020, the Company entered into a convertible promissory note with a non-related party for $53,500, of which $3,500 was an original issue discount resulting in cash proceeds to the Company of $50,000. The note is due on March 21, 2022 and bears interest on the unpaid principal balance at a rate of 12% per annum. Stringent pre-payment terms apply (from 15% to 40%, dependent upon the timeframe of repayment during the note’s term) and any part of the note which is not paid when due shall bear interest at the rate of 22% per annum from the due date until paid. The Note may be converted by the Lender at any time after 180 days of the date of issuance into shares of Company’s common stock at a conversion price equal to 61% of the lowest trading price during the 15-trading day period prior to the conversion date. As the note is not convertible until 180 days following issuance, no derivative liability was recognized as of December 31, 2020. bb) On September 24, 2020, a non-related promissory noteholder assigned its promissory note to a different non-related party. The balance of the note assigned was $87,500. On September 25, 2020, the Company amended a promissory note to add a conversion feature making the note convertible at $0.001 per share, with all other terms remaining the same. As the instruments were substantially different, the promissory note was considered to be extinguished. As a result, the Company recorded a loss on extinguishment of debt of $3,298,750. During the year ended December 31, 2020, $47,500 of principal of the convertible note payable was converted into 47,500,000 shares of the Company’s common stock. cc) On October 7, 2020, the Company entered into a convertible promissory note with a non-related party for $200,000. The note is due on October 6, 2021 and bears interest on the unpaid principal balance at a rate of 5% per annum. The Note may be converted by the Lender at any time after 6-months of the date of issuance into shares of Company’s common stock at a conversion price of $0.20. dd) On October 16, 2020, the Company entered into a convertible promissory note with a non-related party for $200,000. The note is due on October 15, 2021 and bears interest on the unpaid principal balance at a rate of 5% per annum. The Note may be converted by the Lender at any time after 6-months of the date of issuance into shares of Company’s common stock at a conversion price of $0.20. ee) On November 11, 2020, the Company entered into a convertible promissory note with a non-related party for $300,000. The note is due on November 10, 2021 and bears interest on the unpaid principal balance at a rate of 5% per annum. The Note may be converted by the Lender at any time after 6-months of the date of issuance into shares of Company’s common stock at a conversion price of $0.15. ff) On November 20, 2020, the Company entered into a settlement agreement to settle a convertible note with a remaining principal amount of $154,330 and accrued interest balance of $166,932. Pursuant to the settlement agreement, the Company agreed to issue 15,000,000 common shares with a fair value of $309,000 to settle the principal and accrued interest and penalties relating to the convertible note. As a result, the Company recorded a gain on settlement of debt of $1,362,268. gg) On December 29, 2020, the Company entered into a convertible promissory note with a non-related party for $150,000. The note is due on December 28, 2021 and bears interest on the unpaid principal balance at a rate of 5% per annum. The Note may be converted by the Lender at any time after 6-months of the date of issuance into shares of Company’s common stock at a conversion price of $0.10. |
DERIVATIVE LIABILITIES (Tables)
DERIVATIVE LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
Summary of changes in the fair value of the Company's Level 3 financial liabilities | December 31, 2020 December 31, 2019 Balance at the beginning of period $ 10,517,873 $ 322,976 Original discount limited to proceeds of convertible notes 166,000 540,750 Change in fair value of embedded conversion feature 5,424,692 12,912,201 Settlement of derivative instruments (4,876,287 ) (3,258,054 ) Balance at the end of the period $ 11,429,043 $ 10,517,873 |
Assumptions used in the calculations for fair value of derivative liabilities | Expected Volatility Risk-free Interest Rate Expected Dividend Yield Expected Life (in years) At issuance 212-358 % 0.25-1.47 % 0 % 1.00-5.00 At December 31, 2020 121-262 % 0.10-0.36 % 0 % 0.25-4.65 |
STOCKHOLDERS' DEFICIT AND STO_2
STOCKHOLDERS' DEFICIT AND STOCK OPTIONS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Summary of options issued and outstanding | Number of Weighted average exercise price Balance, December 31, 2019 200,000 2.00 Granted — — Expired — — Settled — — Balance, December 31, 2020 200,000 2.00 |
Stock options outstanding | Date Number Number Exercise Weighted Average Remaining Contractual Expiration Proceeds to Company if Issued Outstanding Exercisable Price $ Life (Years) Date Exercised 01/26/2017 200,000 200,000 2.00 1.07 01/26/2022 400,000 200,000 200,000 $ 400,000 |
WARRANTS (Tables)
WARRANTS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Guarantees and Product Warranties [Abstract] | |
Summary of the continuity of share purchase warrants | Number of Weighted average exercise price Balance, December 31, 2019 413,816,252 0.00053 Adjustment to warrants outstanding 48,154,762 0.00673 Granted 5,000,000 0.06 Settled (9,280,742 ) 0.00035 Balance, December 31, 2020 457,690,272 0.00179 |
Share purchase warrants outstanding | Date Number Number Exercise Weighted Average Remaining Contractual Expiration Proceeds to Company if Issued Outstanding Exercisable Price $ Life (Years) Date Exercised 11/28/2018 142,857,143* 142,857,143* 0.00035 * 0.91 11/28/2021 $ 50,000 12/03/2018 500,000 500,000 0.10 2.92 12/03/2023 50,000 02/14/2019 143,618,843* 143,618,843* 0.00035 * 3.12 02/14/2024 50,267 03/13/2019 107,142,857* 107,142,857* 0.00035 * 3.20 03/13/2024 37,500 09/11/2019 53,571,429* 53,571,429* 0.00056 * 3.70 09/11/2024 30,000 08/26/2020 10,000,000** 10,000,000** 0.06 4.65 08/26/2025 600,000 457,690,272 457,690,272 $ 817,767 *The number of warrants outstanding and exercisable is variable based on adjustments to the exercise price of the warrant due to dilutive issuances. **An additional 5,000,000 warrants were issued, according to the terms of the agreement, due to the Company defaulted on a convertible note payable with the warrant holder. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Components of net deferred tax asset | For the year ended December 31, 2020 2019 Net operating loss carry forwards $ 7,798,197 $ 6,089,157 Stock/options issued for services (512,905 ) (370,925 ) Stock/options issued for acquisitions (106,856 ) (106,856 ) Loss on settlement of debt 1,080 (14,220 ) Contributed services (77,997 ) (77,997 ) Depreciation and amortization (319,583 ) (246,353 ) Meals and Entertainment (1,809 ) (1,809 ) Loss on change in fair value of conversion features (3,897,570 ) (2,758,381 ) Accretion of discount on convertible note (261,170 ) (170,340 ) Loss on preferred share liability (2,490 ) (2,490 ) Valuation allowance $ (2,618,097 ) $ (2,339,786 ) Net Deferred Tax Asset $ — $ — |
Reconciliation of effective income tax rate | For the Years Ended December 31, 2020 2019 Book income (loss) from operations $ (1,709,040 ) $ (3,481,498 ) Stock/options issued for services 141,980 47,650 Depreciation and amortization 73,230 70,990 Meals and entertainment — — Loss on settlement of debt (15,300 ) 14,220 Loss on change in fair value of conversion feature 1,139,190 2,711,560 Accretion of discount on convertible note 91,630 157,700 Preferred share liability loss — (15,220 ) Change in valuation allowance 278,310 494,598 Provision for Income Taxes $ — $ — |
BASIS OF PRESENTATION AND SUM_4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Financial assets and liabilities carried at fair value (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Derivative liability | $ 11,429,043 | $ 10,517,873 | $ 322,976 |
Total | 11,429,043 | 10,517,873 | |
Quoted prices in active markets (Level 1) | |||
Derivative liability | |||
Total | |||
Significant other observable inputs (Level 2) | |||
Derivative liability | |||
Total | |||
Significant unobservable inputs (Level 3) | |||
Derivative liability | 11,429,043 | 10,517,873 | |
Total | $ 11,429,043 | $ 10,517,873 |
BASIS OF PRESENTATION AND SUM_5
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Allowance for doubtful accounts | $ 61,825 | $ 16,250 |
Antidilutive securities excluded from calculation of earnings per share | 599,906,324 |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Losses incurred since inception | $ (34,913,854) | $ (26,505,567) |
Working capital deficit | $ (14,479,722) |
PROPERTY AND EQUIPMENT - Proper
PROPERTY AND EQUIPMENT - Property and equipment (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Abstract] | ||
Leasehold improvements | $ 18,840 | $ 151,719 |
Machinery and leased equipment | 365,483 | |
Machinery and equipment not yet in services | 32,580 | 321,565 |
Office equipment and furniture | 39,357 | 20,064 |
Website | 2,760 | 2,760 |
Total Property and equipment | 459,020 | 496,108 |
Less: Accumulated depreciation | (100,301) | (55,999) |
Property and equipment, net | $ 358,719 | $ 440,109 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 44,303 | $ 25,184 |
Loss on disposal of equipment | 173,551 | |
Gain on settlement of debt | $ 16,706 |
INTANGIBLE ASSETS - Components
INTANGIBLE ASSETS - Components of intangible assets (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Patents | $ 4,505,489 | $ 4,505,489 |
Technology rights | 200,000 | 200,000 |
Intangible, at cost | 4,705,489 | 4,705,489 |
Less: Accumulated amortization | (1,305,465) | (1,001,060) |
Net Carrying Amount | $ 3,400,024 | $ 3,704,429 |
INTANGIBLE ASSETS - Estimated f
INTANGIBLE ASSETS - Estimated future amortization expense of intangible assets (Details) | Dec. 31, 2020USD ($) |
Intangible Assets - Estimated Future Amortization Expense Of Intangible Assets | |
For year ending December 31, 2021 | $ 302,003 |
For year ending December 31, 2022 | 302,003 |
For year ending December 31, 2023 | 302,003 |
For year ending December 31, 2024 | 302,003 |
For year ending December 31, 2025 | 302,003 |
Thereafter | 1,890,009 |
Total | $ 3,400,024 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Intangible Assets Details Narrative Abstract | ||
Amortization expense | $ 304,405 | $ 312,844 |
Gain on sales of intangible assets | $ 52,498 |
LEASES - Components of lease ex
LEASES - Components of lease expenses, supplemental balance sheet, cashflow and other information related to leases (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Components of lease expenses | ||
Total operating lease cost | $ 10,458 | $ 52,800 |
Supplemental cashflow and other information | ||
Lease payments | 9,000 | 52,800 |
Supplemental balance sheet information | ||
Cost | 123,614 | 43,330 |
Accumulated amortization | (5,229) | (43,330) |
Net carrying value | $ 118,385 |
LEASES - Future minimum lease p
LEASES - Future minimum lease payments related to lease obligations (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
2021 | $ 54,000 | |
2022 | 54,000 | |
2023 | 45,000 | |
Total minimum lease payments | 153,000 | |
Less: amount of lease payments representing effects of discounting | (34,615) | |
Present value of future minimum lease payments | 118,385 | |
Less: current obligations under leases | (34,965) | |
Lease liabilities, net of current portion | $ 83,420 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating lease expense recognized | $ 82,800 | $ 52,800 |
Operating lease right-of-use asset and liability recognized | $ 123,614 | $ 43,330 |
NOTES PAYABLE - Notes payable (
NOTES PAYABLE - Notes payable (Details) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Notes Payable (4) | |
Original amount | $ 25,000 |
Issuance date | May 8, 2017 |
Maturity date | Jun. 30, 2018 |
Interest rate | 0.00% |
Balance, beginning | $ 27,500 |
Balance, ending | 27,500 |
Notes Payable (14) | |
Original amount | $ 130,000 |
Issuance date | Jun. 20, 2018 |
Maturity date | Jan. 2, 2020 |
Interest rate | 8.00% |
Balance, beginning | $ 130,000 |
Balance, ending | |
Notes Payable (18) | |
Original amount | $ 8,700 |
Issuance date | Nov. 15, 2018 |
Maturity date | Jun. 30, 2019 |
Interest rate | 10.00% |
Balance, beginning | $ 8,700 |
Balance, ending | 8,700 |
Notes Payable (22) | |
Original amount | $ 90,596 |
Issuance date | Sep. 15, 2019 |
Maturity date | May 28, 2020 |
Interest rate | 8.00% |
Balance, beginning | $ 90,596 |
Balance, ending | |
Notes Payable (23) | |
Original amount | $ 50,000 |
Issuance date | Oct. 3, 2019 |
Maturity date | Apr. 3, 2020 |
Interest rate | 12.00% |
Balance, beginning | $ 37,500 |
Balance, ending | |
Notes Payable (24) | |
Original amount | $ 17,500 |
Issuance date | Nov. 12, 2019 |
Maturity date | Nov. 12, 2020 |
Interest rate | 8.00% |
Balance, beginning | $ 17,500 |
Balance, ending | |
Notes Payable (26) | |
Original amount | $ 83,400 |
Issuance date | Dec. 20, 2019 |
Maturity date | Jun. 19, 2020 |
Interest rate | 150.00% |
Balance, beginning | $ 80,192 |
Balance, ending | |
Notes Payable (27) | |
Original amount | $ 148,362 |
Issuance date | Dec. 20, 2019 |
Maturity date | Nov. 27, 2020 |
Interest rate | 80.00% |
Balance, beginning | $ 145,404 |
Balance, ending | |
Notes Payable (28) | |
Original amount | $ 25,782 |
Issuance date | Jan. 8, 2020 |
Maturity date | May 13, 2020 |
Interest rate | 313.00% |
Balance, beginning | |
Balance, ending | |
Notes Payable (29) | |
Original amount | $ 33,660 |
Issuance date | Feb. 19, 2020 |
Maturity date | Apr. 30, 2020 |
Interest rate | 585.00% |
Balance, beginning | |
Balance, ending | |
Notes Payable (30) | |
Original amount | $ 20,000 |
Issuance date | Feb. 28, 2020 |
Maturity date | May 28, 2020 |
Interest rate | 8.00% |
Balance, beginning | |
Balance, ending | |
Notes Payable (31) | |
Original amount | $ 100,000 |
Issuance date | Mar. 31, 2020 |
Maturity date | Aug. 1, 2020 |
Interest rate | 30.00% |
Balance, beginning | |
Balance, ending | |
Notes Payable (32) | |
Original amount | $ 118,644 |
Issuance date | May 5, 2020 |
Maturity date | May 5, 2021 |
Interest rate | 8.00% |
Balance, beginning | |
Balance, ending | 110,644 |
Notes Payable (33) | |
Original amount | $ 150,000 |
Issuance date | Jul. 8, 2020 |
Maturity date | Oct. 5, 2021 |
Interest rate | 10.00% |
Balance, beginning | |
Balance, ending | |
Notes Payable (34) | |
Original amount | $ 119,200 |
Issuance date | Jul. 15, 2020 |
Maturity date | Nov. 4, 2020 |
Interest rate | 23.00% |
Balance, beginning | |
Balance, ending | |
Notes Payable (36) | |
Original amount | $ 74,950 |
Issuance date | Aug. 21, 2020 |
Maturity date | Nov. 28, 2020 |
Interest rate | 343.00% |
Balance, beginning | |
Balance, ending | |
Notes Payable (38) | |
Original amount | $ 199,500 |
Issuance date | Oct. 1, 2020 |
Maturity date | Sep. 28, 2021 |
Interest rate | 66.00% |
Balance, beginning | |
Balance, ending | 149,573 |
Notes Payable (39) | |
Original amount | $ 126,000 |
Issuance date | Nov. 3, 2020 |
Maturity date | Apr. 23, 2021 |
Interest rate | 168.00% |
Balance, beginning | |
Balance, ending | 85,050 |
Notes Payable (40) | |
Original amount | $ 113,980 |
Issuance date | Nov. 4, 2020 |
Maturity date | Mar. 15, 2021 |
Interest rate | 210.00% |
Balance, beginning | |
Balance, ending | 65,988 |
Notes Payable, Related Party (12) | |
Original amount | $ 30,000 |
Issuance date | Apr. 10, 2018 |
Maturity date | Jan. 15, 2019 |
Interest rate | 3.00% |
Balance, beginning | $ 30,000 |
Balance, ending | 30,000 |
Notes Payable, Related Party (14) | |
Original amount | $ 380,000 |
Issuance date | Jun. 20, 2018 |
Maturity date | Jan. 2, 2020 |
Interest rate | 8.00% |
Balance, beginning | $ 380,000 |
Balance, ending | 380,000 |
Notes Payable, Related Party (15) | |
Original amount | $ 350,000 |
Issuance date | Jun. 20, 2018 |
Maturity date | Jan. 2, 2020 |
Interest rate | 5.00% |
Balance, beginning | $ 325,000 |
Balance, ending | 285,214 |
Notes Payable, Related Party (16) | |
Original amount | $ 17,000 |
Issuance date | Jun. 20, 2018 |
Maturity date | Jan. 2, 2020 |
Interest rate | 5.00% |
Balance, beginning | $ 17,000 |
Balance, ending | 17,000 |
Notes Payable, Related Party (18) | |
Original amount | $ 50,000 |
Issuance date | Jul. 27, 2018 |
Maturity date | Nov. 30, 2018 |
Interest rate | 8.00% |
Balance, beginning | $ 50,000 |
Balance, ending | 50,000 |
Notes Payable, Related Party (19) | |
Original amount | $ 5,000 |
Issuance date | Oct. 9, 2018 |
Interest rate | 0.00% |
Balance, beginning | $ 5,000 |
Balance, ending | 5,000 |
Notes Payable, Related Party (20) | |
Original amount | $ 5,000 |
Issuance date | Oct. 19, 2018 |
Interest rate | 0.00% |
Balance, beginning | $ 5,000 |
Balance, ending | 5,000 |
Notes Payable, Related Party (24) | |
Original amount | $ 15,000 |
Issuance date | Aug. 16, 2019 |
Maturity date | Feb. 16, 2020 |
Interest rate | 8.00% |
Balance, beginning | $ 15,000 |
Balance, ending | 15,000 |
Notes Payable, Related Party (25) | |
Original amount | $ 1,500 |
Issuance date | Feb. 11, 2020 |
Interest rate | 0.00% |
Balance, beginning | |
Balance, ending | |
Notes Payable, Related Party (26) | |
Original amount | $ 2,000 |
Issuance date | Feb. 11, 2020 |
Interest rate | 0.00% |
Balance, beginning | |
Balance, ending | 2,000 |
Convertible Note Payable (5) | |
Original amount | $ 50,000 |
Issuance date | Dec. 6, 2018 |
Maturity date | Dec. 6, 2019 |
Interest rate | 12.00% |
Balance, beginning | $ 22,777 |
Balance, ending | |
Convertible Note Payable (6) | |
Original amount | $ 65,000 |
Issuance date | Dec. 6, 2018 |
Maturity date | Dec. 6, 2019 |
Interest rate | 12.00% |
Balance, beginning | $ 46 |
Balance, ending | 46 |
Convertible Note Payable (9) | |
Original amount | $ 100,000 |
Issuance date | Jan. 18, 2019 |
Maturity date | Jan. 16, 2020 |
Interest rate | 24.00% |
Balance, beginning | $ 95,492 |
Balance, ending | |
Convertible Note Payable (10) | |
Original amount | $ 60,000 |
Issuance date | Jan. 29, 2019 |
Maturity date | Jan. 22, 2020 |
Interest rate | 18.00% |
Balance, beginning | $ 266,050 |
Balance, ending | |
Convertible Note Payable (11) | |
Original amount | $ 50,000 |
Issuance date | Feb. 1, 2019 |
Maturity date | Oct. 22, 2019 |
Interest rate | 24.00% |
Balance, beginning | $ 154,330 |
Balance, ending | |
Convertible Note Payable (12) | |
Original amount | $ 60,000 |
Issuance date | Feb. 21, 2019 |
Maturity date | Feb. 14, 2022 |
Interest rate | 0.00% |
Balance, beginning | $ 74,000 |
Balance, ending | |
Convertible Note Payable (13) | |
Original amount | $ 55,125 |
Issuance date | Feb. 21, 2019 |
Maturity date | Feb. 20, 2020 |
Interest rate | 24.00% |
Balance, beginning | $ 42,125 |
Balance, ending | |
Convertible Note Payable (15) | |
Original amount | $ 75,000 |
Issuance date | Mar. 18, 2019 |
Maturity date | Dec. 13, 2019 |
Interest rate | 24.00% |
Balance, beginning | $ 232,814 |
Balance, ending | 177,795 |
Convertible Note Payable (17) | |
Original amount | $ 26,000 |
Issuance date | Sep. 16, 2019 |
Maturity date | Sep. 11, 2022 |
Interest rate | 0.00% |
Balance, beginning | $ 26,000 |
Balance, ending | |
Convertible Note Payable (18) | |
Original amount | $ 175,814 |
Issuance date | Sep. 27, 2019 |
Maturity date | Sep. 25, 2020 |
Interest rate | 8.00% |
Balance, beginning | $ 175,814 |
Balance, ending | |
Convertible Note Payable (19) | |
Original amount | $ 53,000 |
Issuance date | Oct. 8, 2019 |
Maturity date | Oct. 7, 2020 |
Interest rate | 12.00% |
Balance, beginning | $ 53,000 |
Balance, ending | |
Convertible Note Payable (20) | |
Original amount | $ 50,000 |
Issuance date | Oct. 31, 2019 |
Maturity date | Oct. 29, 2020 |
Interest rate | 12.00% |
Balance, beginning | $ 50,000 |
Balance, ending | |
Convertible Note Payable (21) | |
Original amount | $ 8,888 |
Issuance date | Feb. 19, 2020 |
Maturity date | Feb. 18, 2021 |
Interest rate | 12.00% |
Balance, beginning | |
Balance, ending | |
Convertible Note Payable (22) | |
Original amount | $ 30,000 |
Issuance date | Mar. 6, 2020 |
Maturity date | Mar. 5, 2021 |
Interest rate | 12.00% |
Balance, beginning | |
Balance, ending | 21,662 |
Convertible Note Payable (23) | |
Original amount | $ 45,000 |
Issuance date | Mar. 9, 2020 |
Maturity date | Mar. 2, 2021 |
Interest rate | 12.00% |
Balance, beginning | |
Balance, ending | |
Convertible Note Payable (24) | |
Original amount | $ 150,000 |
Issuance date | Apr. 10, 2020 |
Maturity date | Apr. 9, 2021 |
Interest rate | 12.00% |
Balance, beginning | |
Balance, ending | 165,000 |
Convertible Note Payable (25) | |
Original amount | $ 128,000 |
Issuance date | Apr. 16, 2020 |
Maturity date | Apr. 9, 2021 |
Interest rate | 12.00% |
Balance, beginning | |
Balance, ending | |
Convertible Note Payable (26) | |
Original amount | $ 83,000 |
Issuance date | May 12, 2020 |
Maturity date | Nov. 8, 2021 |
Interest rate | 12.00% |
Balance, beginning | |
Balance, ending | |
Convertible Note Payable (27) | |
Original amount | $ 300,000 |
Issuance date | Aug. 27, 2020 |
Maturity date | Jul. 31, 2021 |
Interest rate | 10.00% |
Balance, beginning | |
Balance, ending | 300,000 |
Convertible Note Payable (28) | |
Original amount | $ 53,500 |
Issuance date | Sep. 22, 2020 |
Maturity date | Mar. 21, 2022 |
Interest rate | 12.00% |
Balance, beginning | |
Balance, ending | 53,500 |
Convertible Note Payable (29) | |
Original amount | $ 87,500 |
Issuance date | Sep. 24, 2020 |
Interest rate | 8.00% |
Balance, beginning | |
Balance, ending | 40,000 |
Convertible Note Payable (30) | |
Original amount | $ 200,000 |
Issuance date | Oct. 7, 2020 |
Maturity date | Oct. 6, 2021 |
Interest rate | 5.00% |
Balance, beginning | |
Balance, ending | 200,000 |
Convertible Note Payable (31) | |
Original amount | $ 200,000 |
Issuance date | Oct. 16, 2020 |
Maturity date | Oct. 15, 2021 |
Interest rate | 5.00% |
Balance, beginning | |
Balance, ending | 200,000 |
Convertible Note Payable (32) | |
Original amount | $ 300,000 |
Issuance date | Nov. 11, 2020 |
Maturity date | Nov. 10, 2021 |
Interest rate | 5.00% |
Balance, beginning | |
Balance, ending | 300,000 |
Convertible Note Payable (33) | |
Original amount | $ 150,000 |
Issuance date | Dec. 29, 2020 |
Maturity date | Dec. 28, 2021 |
Interest rate | 5.00% |
Balance, beginning | |
Balance, ending | $ 150,000 |
DERIVATIVE LIABILITIES - Summar
DERIVATIVE LIABILITIES - Summary of changes in the fair value of the Company's Level 3 financial liabilities (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Notes to Financial Statements | ||
Balance at the beginning of period | $ 10,517,873 | $ 322,976 |
Original discount limited to proceeds of convertible notes | 166,000 | 540,750 |
Change in fair value of embedded conversion feature | 5,424,692 | 12,912,201 |
Settlement of derivative instruments | (4,876,287) | (3,258,054) |
Balance at the end of the period | $ 11,429,043 | $ 10,517,873 |
DERIVATIVE LIABILITIES - Assump
DERIVATIVE LIABILITIES - Assumptions used in the calculations for fair value of derivative liabilities (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Derivative liabilities - At Issuance | |
Expected price volatility, minimum | 212.00% |
Expected price volatility, maximum | 358.00% |
Expected dividend yield | 0.00% |
Expected option life, minimum | 1 year |
Expected option life, maximum | 5 years |
Risk-free interest rate, minimum | 0.25% |
Risk-free interest rate, maximum | 1.47% |
Derivative liabilities | |
Expected price volatility, minimum | 121.00% |
Expected price volatility, maximum | 262.00% |
Expected dividend yield | 0.00% |
Expected option life, minimum | 3 months |
Expected option life, maximum | 4 years 7 months 24 days |
Risk-free interest rate, minimum | 0.10% |
Risk-free interest rate, maximum | 0.36% |
STOCKHOLDERS' DEFICIT AND STO_3
STOCKHOLDERS' DEFICIT AND STOCK OPTIONS - Summary of options issued and outstanding (Details) | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Stockholders Deficit And Stock Options - Summary Of Options Issued And Outstanding | |
Number of options, beginning balance | shares | 200,000 |
Number of options, granted | shares | |
Number of options, expired | shares | |
Number of options, settled | shares | |
Number of options, ending balance | shares | 200,000 |
Weighted average exercise price, beginning balance | $ / shares | $ 2 |
Weighted average exercise price, granted | $ / shares | |
Weighted average exercise price, expired | $ / shares | |
Weighted average exercise price, settled | $ / shares | |
Weighted average exercise price, ending balance | $ / shares | $ 2 |
STOCKHOLDERS' DEFICIT AND STO_4
STOCKHOLDERS' DEFICIT AND STOCK OPTIONS - Stock options outstanding (Details) - Options issued and outstanding | 12 Months Ended |
Dec. 31, 2020USD ($)$ / sharesshares | |
Number outstanding | 200,000 |
Number exercisable | 200,000 |
Exercise price | $ / shares | $ 2 |
Weighted average remaining contractual life | 1 year 26 days |
Expiration date | Jan. 26, 2022 |
Proceeds to Company if exercised | $ | $ 400,000 |
WARRANTS - Summary of the conti
WARRANTS - Summary of the continuity of share purchase warrants (Details) | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Guarantees and Product Warranties [Abstract] | |
Number of warrants, beginning balance | shares | 413,816,252 |
Number of warrants, adjustments to warrants outstanding | shares | 43,154,762 |
Number of warrants, granted | shares | 5,000,000 |
Number of warrants, exercised | shares | (9,280,742) |
Number of warrants, ending balance | shares | 457,690,272 |
Weighted average exercise price, beginning balance | $ / shares | $ 0.00053 |
Weighted average exercise price, adjustments to warrants outstanding | $ / shares | 0.00673 |
Weighted average exercise price, granted | $ / shares | 0.06 |
Weighted average exercise price, exercised | $ / shares | 0.00035 |
Weighted average exercise price, ending balance | $ / shares | $ 0.00179 |
WARRANTS - Share purchase warra
WARRANTS - Share purchase warrants outstanding (Details) - Share purchase warrants outstanding - USD ($) | Aug. 27, 2020 | Sep. 12, 2019 | Mar. 14, 2019 | Feb. 15, 2019 | Dec. 04, 2018 | Nov. 29, 2018 | Dec. 31, 2020 |
Number outstanding | 10,000,000 | 53,571,429 | 107,142,857 | 143,618,843 | 500,000 | 142,857,143 | 457,690,272 |
Number exercisable | 10,000,000 | 53,571,429 | 107,142,857 | 143,618,843 | 500,000 | 142,857,143 | 457,690,272 |
Exercise price | $ 0.06 | $ 0.00056 | $ 0.00035 | $ 0.00035 | $ 0.10 | $ 0.00035 | |
Weighted average remaining contractual life | 4 years 7 months 24 days | 3 years 8 months 12 days | 3 years 2 months 12 days | 3 years 1 month 13 days | 2 years 11 months 1 day | 10 months 28 days | |
Expiration date | Aug. 26, 2025 | Sep. 11, 2024 | Mar. 13, 2024 | Feb. 14, 2024 | Dec. 3, 2023 | Nov. 28, 2021 | |
Proceeds to Company if exercised | $ 600,000 | $ 30,000 | $ 37,500 | $ 50,267 | $ 50,000 | $ 50,000 | $ 817,767 |
INCOME TAXES - Components of ne
INCOME TAXES - Components of net deferred tax asset (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry forwards | $ 7,798,197 | $ 6,089,157 |
Stock/options issued for services | (512,905) | (370,925) |
Stock/options issued for acquisitions | (106,856) | (106,856) |
Loss on settlement of debt | 1,080 | (14,220) |
Contributed services | (77,997) | (77,997) |
Depreciation and amortization | (319,583) | (246,353) |
Meals and Entertainment | (1,809) | (1,809) |
Loss on change in fair value of conversion features | (3,897,570) | (2,758,381) |
Accretion of discount on convertible note | (261,170) | (170,340) |
Loss on preferred share liability | (2,490) | (2,490) |
Valuation allowance | (2,618,097) | (2,339,786) |
Net Deferred Tax Asset |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of effective income tax rate (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Book income (loss) from operations | $ (1,709,040) | $ (3,481,498) |
Stock/options issued for services | 141,980 | 47,650 |
Depreciation and amortization | 73,230 | 70,990 |
Meals and entertainment | ||
Loss on settlement of debt | (15,300) | 14,220 |
Loss on change in fair value of conversion feature | 1,139,190 | 2,711,560 |
Accretion of discount on convertible note | 91,630 | 157,700 |
Preferred share liability loss | (15,220) | |
Change in valuation allowance | 278,310 | 494,598 |
Provision for Income Taxes |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | Dec. 31, 2020USD ($) |
Income Tax Disclosure [Abstract] | |
Net operating loss carry forwards | $ 10,222,362 |