GrowLife (PHOT) 10-K 31 Mar 17 2016 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2016	Mar. 31, 2017	Jun. 30, 2016
Document And Entity Information
Entity Registrant Name	GrowLife, Inc.
Entity Central Index Key	1,161,582
Document Type	10-K
Document Period End Date	Dec. 31, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	No
Entity Filer Category	Smaller Reporting Company
Entity Public Float			$ 17,064,082
Entity Common Stock, Shares Outstanding		1,944,843,172
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2,016

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	Dec. 31, 2016	Dec. 31, 2015
CURRENT ASSETS:
Cash and cash equivalents	$ 103,070	$ 60,362
Inventory, net	418,453	398,439
Deposits	11,163	16,754
Total Current Assets	532,686	475,555
EQUIPMENT, NET	1,890	10,327
OTHER ASSETS
Intangible assets, net	0	243,604
Goodwill	0	739,000
TOTAL ASSETS	534,576	1,468,486
CURRENT LIABILITIES:
Accounts payable - trade	1,529,919	1,272,572
Accounts payable - related parties	10,952	71,920
Accrued expenses	132,656	121,765
Accrued expenses - related parties	19,605	53,287
Derivative liability	2,701,559	1,377,175
Current portion of convertible notes payable	2,798,800	2,287,868
Deferred revenue	47,995	25,000
Total current liabilities	7,241,486	5,209,587
LONG TERM LIABILITIES:
Convertible notes payable	0	0
COMMITMENTS AND CONTINGENCIES	0	2,000,000
MEZZANINE EQUITY:
Contingently redeemable common stock- 0 and 15,000,000 shares issued and outstanding at 9/30/2016 and 12/31/2015, respectively	0	300,000
Stockholders' Deficit
Preferred stock - $0.0001 par value, 10,000,000 shares authorized, no shares issued and outstanding Series B Convertible Preferred stock - $0.0001 par value, 150,000 shares authorized, 0 and 150,000 shares issued and outstanding at 12/31/16 and 12/31/15, respectively Series C Convertible Preferred stock - $0.0001 par value, 51 shares authorized, 51 shares issued and outstanding at 12/31/2016 and 12/31/2015, respectively	0	0
Common stock - $0.0001 par value, 3,000,000,000 shares authorized, 1,656,120,083 and 891,116,496 shares issued and outstanding at 12/31/2016 and 12/31/2015, respectively	165,600	89,098
Additional paid-in capital	117,537,822	110,585,434
Accumulated deficit	(124,410,332)	(116,715,648)
Total stockholders' deficit	(6,706,910)	(6,041,101)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	534,576	1,468,486
Series B Preferred Stock
Stockholders' Deficit
Preferred stock - $0.0001 par value, 10,000,000 shares authorized, no shares issued and outstanding Series B Convertible Preferred stock - $0.0001 par value, 150,000 shares authorized, 0 and 150,000 shares issued and outstanding at 12/31/16 and 12/31/15, respectively Series C Convertible Preferred stock - $0.0001 par value, 51 shares authorized, 51 shares issued and outstanding at 12/31/2016 and 12/31/2015, respectively	0	15
Series C Preferred Stock
Stockholders' Deficit
Preferred stock - $0.0001 par value, 10,000,000 shares authorized, no shares issued and outstanding Series B Convertible Preferred stock - $0.0001 par value, 150,000 shares authorized, 0 and 150,000 shares issued and outstanding at 12/31/16 and 12/31/15, respectively Series C Convertible Preferred stock - $0.0001 par value, 51 shares authorized, 51 shares issued and outstanding at 12/31/2016 and 12/31/2015, respectively	$ 0	$ 0

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2016	Dec. 31, 2015
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred Stock, Authorized	10,000,000	10,000,000
Preferred Stock, Issued	0	0
Preferred stock, outstanding shares	0	0
Common Stock par value	$ 0.0001	$ 0.0001
Common Stock, Authorized	3,000,000,000	3,000,000,000
Common Stock, Issued	1,656,120,083	891,116,496
Common Stock, Outstanding	1,656,120,083	891,116,496
Series B Preferred Stock
Preferred stock, par value	$ .0001	$ 0.0001
Preferred Stock, Authorized	150,000	150,000
Preferred Stock, Issued	0	150,000
Preferred stock, outstanding shares	0	150,000
Series C Preferred Stock
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred Stock, Authorized	51	51
Preferred Stock, Issued	51	51
Preferred stock, outstanding shares	51	51

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Income Statement [Abstract]
NET REVENUE	$ 1,231,281	$ 3,499,642
COST OF GOODS SOLD	1,275,580	2,980,503
GROSS PROFIT	(44,299)	519,139
GENERAL AND ADMINISTRATIVE EXPENSES	1,888,537	2,684,107
IMPAIRMENT OF LONG-LIVED ASSETS	876,056	0
OPERATING LOSS	(2,808,892)	(2,164,968)
OTHER INCOME (EXPENSE):
Change in fair value of derivative	(1,324,384)	1,678,541
Interest expense, net	(816,750)	(1,118,635)
Other income (expense), primarily related to TCA funding	144,882	(2,002,533)
Loss on debt conversions	(2,889,540)	0
Loss on class action lawsuit settlements	0	(2,081,250)
Total other (expense)	(4,885,792)	(3,523,877)
(LOSS) BEFORE INCOME TAXES	(7,694,684)	(5,688,845)
Income taxes - current benefit	0	0
NET (LOSS)	$ (7,694,684)	$ (5,688,845)
Basic and diluted (loss) per share	$ (0.01)	$ (0.01)
Weighted average shares of common stock outstanding- basic and diluted	1,197,565,907	884,348,627

Consolidated Statements of Stoc

Consolidated Statements of Stockholders' Deficit - USD ($)	Series B Preferred Stock	Series C Preferred Stock	Common Stock [Member]	Unrealized gain on investment in related party	Additional Paid-In Capital	Accumulated Deficit	Total
Begining balance at Dec. 31, 2014	$ 0	$ 0	$ 87,936	$ 0	$ 108,699,950	$ (111,026,803)	$ (2,238,917)
Begining balance, shares at Dec. 31, 2014	0	0	879,343,771
Conversion of notes, shares			7,772,725
Shares issued for debt conversion, amount			$ 777		170,223		171,000
Shares issued for debt conversion, shares			7,772,725
Shares issued for services rendered, amount			$ 400		39,600		40,000
Shares issued for services rendered, shares			4,000,000
Stock based compensation for stock options					175,661		175,661
Series B Convertible Preferred Stock converted into convertible notes payable, amount							0
Shares issued for class action settlements, amount							0
Issuance of Series B Convertible Preferred Stock, amount	$ 15		$ (15)		1,500,000		1,500,000
Issuance of Series B Convertible Preferred Stock, shares	150,000
Issuance of Series C Convertible Preferred Stock, amount		$ 0					0
Issuance of Series C Convertible Preferred Stock, shares		51
Net loss						(5,688,845)	(5,688,845)
Ending balance at Dec. 31, 2015	$ 15	$ 0	$ 89,098	0	110,585,434	(116,715,648)	(6,041,101)
Ending balance, shares at Dec. 31, 2015	150,000	51	891,116,496
Conversion of notes, shares			13,400,000
Shares issued for debt conversion, amount			$ 1,340		142,660		144,000
Shares issued for debt conversion, shares			13,400,000
Shares issued for services rendered, amount			$ 2,602		282,598		285,200
Shares issued for services rendered, shares			26,020,000
Stock based compensation for stock options					145,729		145,729
Shares issued for convertible note and interest conversion, amount			$ 59,546		5,594,400		5,653,946
Shares issued for convertible note and interest conversion, shares			595,442,539
Shares issued for mezzanine equity, amount			$ 1,500		298,500		300,000
Shares issued for mezzanine equity, shares			15,000,000
Series B Convertible Preferred Stock converted into convertible notes payable, amount	$ (15)				(1,499,985)		(1,500,000)
Series B Convertible Preferred Stock converted into convertible notes payable, shares	(150,000)
Shares issued for class action settlements, amount			$ 11,514		1,988,486		2,000,000
Shares issued for class action settlements, shares			115,141,048
Net loss						(7,694,684)	(7,694,684)
Ending balance at Dec. 31, 2016	$ 0	$ 0	$ 165,600	$ 0	$ 117,537,822	$ 124,410,332	$ (6,706,910)
Ending balance, shares at Dec. 31, 2016	0	51	1,656,120,083

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (7,694,684)	$ (5,688,845)
Adjustments to reconcile net loss to net cash (used in) operating activities:
Depreciation and amortization	8,437	13,715
Amortization of intangible assets	106,548	106,548
Stock based compensation	145,729	175,661
Preferred shares issued for services	0	300,000
Common stock issued for services	285,200	210,985
Amortization of debt discount	514,668	(158,237)
Change in fair value of derivative liability	1,324,384	(723,740)
Accrued interest on convertible notes payable	120,824	310,500
Loss on class action lawsuit settlements	0	2,000,000
Issuance of Series B Convertible Preferred Stock	0	1,500,000
Write-off of patent expenses	0	3,600
Excess and obsolete inventory	0	20,215
Loss on debt conversions	2,889,540	0
Impairment of long-lived assets	876,056	0
Changes in assets and liabilities:
Inventory	20,014	464,696
Prepaid expenses	0	41,791
Deposits	(5,591)	16,830
Accounts payable	196,379	215,362
Accrued expenses	(22,791)	(209,972)
Deferred revenue	22,995	25,000
CASH (USED IN) OPERATING ACTIVITIES	(1,212,292)	(1,375,891)
CASH FLOWS FROM INVESTING ACTIVITIES:
NET CASH PROVIDED BY INVESTING ACTIVITIES:	0	0
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash provided from Convertible Promissory Note with Chicago Venture Partners, L.P.	1,255,000	0
Proceeds from the issuance of convertible notes	0	1,150,000
Series B Convertible Preferred Stock	0	15
NET CASH PROVIDED BY FINANCING ACTIVITIES	1,255,000	1,150,015
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	42,708	(225,876)
CASH AND CASH EQUIVALENTS, beginning of period	60,362	286,238
CASH AND CASH EQUIVALENTS, end of period	103,070	60,362
Supplemental disclosures of cash flows information:
Cash paid for interest	0	10,500
Cash paid for income taxes	0	0
NON-CASH TRANSACTIONS
Shares issued for convertible note and interest conversion	2,764,406	0
Common stock issued for conversion of accounts payable	144,000	171,000
Shares issued for class action settlements	2,000,000	0
Shares issued for mezzanine equity	300,000	0
Series B Convertible Preferred Stock converted into convertible notes payable	(1,500,000)	0
Series B Convertible Preferred Stock converted into convertible notes payable debt discount	$ 315,669	$ 0

1. DESCRIPTION OF BUSINESS AND

1. DESCRIPTION OF BUSINESS AND ORGANIZATION	12 Months Ended
	Dec. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
DESCRIPTION OF BUSINESS AND ORGANIZATION	GrowLife, Inc. (“GrowLife” or the “Company”) is incorporated under the laws of the State of Delaware and is headquartered in Seattle, Washington. The Company was founded in 2012 with the Closing of the Agreement and Plan of Merger with SGT Merger Corporation. The Company’s goal of becoming the nation’s largest cultivation facility service provider for the production of organics, herbs and greens and plant-based medicines has not changed. The Company’s mission is to best serve more cultivators in the design, build-out, expansion and maintenance of their facilities with products of high quality, exceptional value and competitive price. Through a nationwide network of knowledgeable representatives, regional centers and its e-commerce website, GrowLife provides essential and hard-to-find goods including media (i.e., farming soil), industry-leading hydroponics equipment, organic plant nutrients, and thousands more products to specialty grow operations across the United States. The Company primarily sells through its wholly owned subsidiary, GrowLife Hydroponics, Inc. GrowLife companies distribute and sell over 15,000 products through its e-commerce distribution channel, GrowLifeEco.com, and through our regional retail storefronts. GrowLife and its business units are organized and directed to operate strictly in accordance with all applicable state and federal laws. On June 7, 2013, GrowLife Hydroponics completed the purchase of Rocky Mountain Hydroponics, LLC, a Colorado limited liability company (“RMC”), and Evergreen Garden Center, LLC, a Maine limited liability company (“EGC”). The effective date of the purchase was June 7, 2013. The Company purchased all of the assets and liabilities of the RMH and EGC Companies, and their retail hydroponics stores, which are located in Vail and Boulder, Colorado and Portland, Maine. The Company purchased RMC and EGC from Rob Hunt, who was appointed to the then Company’s Board of Directors and President of GrowLife Hydroponics, Inc. On February 18, 2016, the Company’s common stock resumed unsolicited quotation on the OTC Bulletin Board after receiving clearance from the Financial Industry Regulatory Authority (“FINRA”) on our Form 15c2-11. The Company is currently taking the appropriate steps to uplist to the OTCQB Exchange and resume priced quotations with market makers as soon as it is able.

2. GOING CONCERN

2. GOING CONCERN	12 Months Ended
	Dec. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
GOING CONCERN	The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company incurred net losses of $7,694,684 and $5,688,845 for the years ended December 31, 2016 and 2015, respectively. Our net cash used in operating activities was $1,212,192 and $1,375,891 for the years ended December 31, 2016 and 2015, respectively. The Company anticipates that it will record losses from operations for the foreseeable future. As of December 31, 2016, our accumulated deficit was $124,410,332. The Company has experienced recurring operating losses and negative operating cash flows since inception, and has financed its working capital requirements during this period primarily through the recurring issuance of convertible notes payable and advances from a related party. The audit report prepared by our independent registered public accounting firm relating to our financial statements for the year ended December 31, 2016 and 2015 filed with the SEC on March 31, 2016 includes an explanatory paragraph expressing the substantial doubt about our ability to continue as a going concern. Continuation of the Company as a going concern is dependent upon obtaining additional working capital. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

3. SIGNIFICANT ACCOUNTING POLIC

3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS	12 Months Ended
	Dec. 31, 2016
Accounting Policies [Abstract]
SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS	Basis of Presentation - Principles of Consolidation Cash and Cash Equivalents Accounts Receivable and Revenue - Inventories - Property and Equipment - Goodwill and Intangible Assets - The Company amortizes the cost of other intangible assets over their estimated useful lives, which range up to ten years, unless such lives are deemed indefinite. Intangible assets with indefinite lives are tested in the fourth quarter of each fiscal year for impairment, or more often if indicators warrant. On March 10, 2017, the Audit Committee reviewed the GrowLife Hydroponics, Inc. operations and based on the capital intensive nature of the business and operating results determined that the goodwill value of $739,000 and intangible assets of $137,056 were impaired as of December 31, 2016. The Company recorded an impairment of goodwill and intangible assets associated with GrowLife Hydroponics, Inc. of $876,056 as general and administrative expenses during the three months ended December 31, 2016. Long Lived Assets Fair Value Measurements and Financial Instruments - Level 1 - Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 - Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The carrying value of cash, accounts receivable, investment in a related party, accounts payables, accrued expenses, due to related party, notes payable, and convertible notes approximates their fair values due to their short-term maturities. Derivative financial instruments - Sales Returns - Stock Based Compensation Net (Loss) Per Share - Dividend Policy Use of Estimates - Recent Accounting Pronouncements A variety of proposed or otherwise potential accounting standards are currently under study by standard setting organizations and various regulatory agencies. Due to the tentative and preliminary nature of those proposed standards, management has not determined whether implementation of such proposed standards would be material to the Company’s consolidated financial statements. In May 2014, as part of its ongoing efforts to assist in the convergence of GAAP and International Financial Reporting Standards, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, which is a new standard related to revenue recognition. Under the new standard, recognition of revenue occurs when a customer obtains control of promised services or goods in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts. The standard must be adopted using either a full retrospective approach for all periods presented in the period of adoption or a modified retrospective approach. In July 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers - Deferral of the Effective Date, which defers the implementation of this new standard to be effective for fiscal years beginning after December 15, 2017. Early adoption is permitted effective January 1, 2017. In March 2016, the FASB issued ASU 2016-08, Principal versus Agent Considerations, which clarifies the implementation guidance on principal versus agent considerations in the new revenue recognition standard pursuant to ASU 2014-09. In April 2016, the FASB issued ASU 2016-10, Identifying Performance Obligations and Licensing, and in May 2016, the FASB issued ASU 2016-12, Narrow-Scope Improvements and Practical Expedients, which amend certain aspects of the new revenue recognition standard pursuant to ASU 2014-09. The Company currently evaluating which transition approach we will utilize and the impact of adopting this accounting standard on the Company’s financial statements. In August 2014, the FASB issued ASU 2014-15, Disclosures of Uncertainties About an Entity’s Ability to Continue as a Going Concern. The new standard provides guidance around management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company does not expect that this guidance will have a material impact on its financial position, results of operations or cash flows. In January 2015, the FASB issued ASU 2015-01, Income Statement—Extraordinary and Unusual Items. The objective of this Update is to simplify the income statement presentation requirements in Subtopic 225-20 by eliminating the concept of extraordinary items. Extraordinary items are events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence. Eliminating the extraordinary classification simplifies income statement presentation by altogether removing the concept of extraordinary items from consideration. This Accounting Standards Update is the final version of Proposed Accounting Standards Update 2014-220—Income Statement—Extraordinary Items (Subtopic 225-20), which has been deleted. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. the Company’s does not expect this update to have a material impact on financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”). The standard amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 will be effective beginning in the first quarter of 2019. Early adoption of ASU 2016-02 is permitted. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is currently evaluating the impact of adopting ASU 2016-02 on the Company’s financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. This ASU makes targeted amendments to the accounting for employee share-based payments. This guidance is to be applied using various transition methods such as full retrospective, modified retrospective, and prospective based on the criteria for the specific amendments as outlined in the guidance. The guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2016. Early adoption is permitted, as long as all of the amendments are adopted in the same period. The Company is currently evaluating the impact of adopting ASU 2016-09 on the Company’s financial statements. In June 2016, the FASB issued Accounting Standards Update ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The standard significantly changes how entities will measure credit losses for most financial assets and certain other instruments that aren’t measured at fair value through net income. The standard will replace today’s “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. For available-for-sale debt securities, entities will be required to record allowances rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. This ASU is effective for annual periods beginning after December 15, 2019, and interim periods therein. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods therein. This ASU is not expected to have a material impact on the Company’s financial statements. In August 2016, the FASB issued Accounting Standards Update ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. Stakeholders indicated that there is diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows, and other Topics. This Accounting Standards Update addresses the following eight specific cash flow issues: Debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (COLIs) (including bank-owned life insurance policies (BOLIs)); distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. The amendments in this Update apply to all entities, including both business entities and not-for-profit entities that are required to present a statement of cash flows under Topic 230.This Update is the final version of Proposed Accounting Standards Update EITF-15F—Statement of Cash Flows—Classification of Certain Cash Receipts and Cash Payments (Topic 230), which has been deleted. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted as all of the amendments are adopted in the same period. This ASU is not expected to have a material impact on the Company’s financial statements.

4. TRANSACTIONS WITH CANX USA,

4. TRANSACTIONS WITH CANX USA, LLC AND LOGIC WORKS LLC	12 Months Ended
	Dec. 31, 2016
Notes to Financial Statements
TRANSACTIONS WITH CANX USA, LLC AND LOGIC WORKS LLC	Transactions with CANX, LLC and Logic Works LLC On November 19, 2013, the Company entered into a Joint Venture Agreement with CANX, a Nevada limited liability company. Under the terms of the Joint Venture Agreement, the Company and CANX formed Organic Growth International, LLC (“OGI”), a Nevada limited liability company, for the purpose of expanding the Company’s operations in its current retail hydroponic businesses and in other synergistic business verticals and facilitating additional funding for commercially financeable transactions of up to $40,000,000. The Company initially owned a non-dilutive 45% share of OGI and the Company could acquire a controlling share of OGI as provided in the Joint Venture Agreement. In accordance with the Joint Venture Agreement, the Company and CANX entered into a Warrant Agreement whereby the Company delivered to CANX a warrant to purchase 140,000,000 shares of the Company common stock that is convertible at $0.033 per share, subject to adjustment as provided in the warrant. The five-year warrant expires November 18, 2018. Also, in accordance with the Joint Venture Agreement, on February 7, 2014 the Company issued an additional warrant to purchase 100,000,000 shares of our common stock that is convertible at $0.033 per share, subject to adjustment as provided in the warrant. The five-year warrant expires February 6, 2019. GrowLife received the $1 million as a convertible note in December 2013, received the $1.3 million commitment but not executed and by January 2014 OGI had Letters of Intent with four investment and acquisition transactions valued at $96 million. Before the deals could close, the SEC put a trading halt on our stock on April 10, 2014, which resulted in the withdrawal of all transactions. The business disruption from the trading halt and the resulting class action and derivative lawsuits ceased further investments with the OGI joint venture. The Convertible Note was converted into GrowLife, Inc. common stock as of the year ended December 31, 2016. On July 10, 2014, the Company closed a Waiver and Modification Agreement, Amended and Restated Joint Venture Agreement, Secured Credit Facility and Secured Convertible Note with CANX and Logic Works LLC, a lender and shareholder of the Company. The Amended and Restated Joint Venture Agreement with CANX modified the Joint Venture Agreement dated November 19, 2013 to provide for (i) up to $12,000,000 in conditional financing subject to review by GrowLife and approval by OGI for business growth development opportunities in the legal cannabis industry for up to nine months, subject to extension; (ii) up to $10,000,000 in working capital loans, with each loan requiring approval in advance by CANX; (iii) confirmed that the five year warrants, subject to adjustment, at $0.033 per share for the purchase of 140,000,000 and 100,000,000 were fully earned and were not considered compensation for tax purposes by the Company; (iv) granted CANX five year warrants, subject to adjustment, to purchase 300,000,000 shares of common stock at the fair market price of $0.033 per share as determined by an independent appraisal; (v) warrants as defined in the Agreement related to the achievement of OGI milestones; and (vi) a four year term, subject to adjustment. The Company entered into a Secured Convertible Note and Secured Credit Facility dated June 25, 2014 with Logic Works whereby Logic Works agreed to provide up to $500,000 in funding. Each funding required approval in advance by Logic Works, provided interest at 6% with a default interest of 24% per annum and requires repayment by June 26, 2016. The Note is convertible into common stock of the Company at the lesser of $0.0070 or (B) twenty percent (20%) of the average of the three (3) lowest daily VWAPs occurring during the twenty (20) consecutive Trading Days immediately preceding the applicable conversion date on which Logic Works elects to convert all or part of this 6% Convertible Note, subject to adjustment as provided in the Note. The 6% Convertible Note is collateralized by the assets of the Company. OGI was incorporated on January 7, 2014 in the State of Nevada and had no business activities as of December 31, 2016.

5. INVENTORY

5. INVENTORY	12 Months Ended
	Dec. 31, 2016
Inventory Disclosure [Abstract]
INVENTORY	Inventory as of December 31, 2016 and December 31, 2015 consists of the following: December 31, 2016 2015 Finished goods $ 438,453 $ 418,439 Inventory reserve (20,000 ) (20,000 ) Total $ 418,453 $ 398,439 Finished goods inventory relates to product at the Company’s retail stores, which is product purchased from distributors, and in some cases directly from the manufacturer, and resold at our stores. The Company reviews its inventory on a periodic basis to identify products that are slow moving and/or obsolete, and if such products are identified, the Company records the appropriate inventory impairment charge at such time.

6. CONVERTIBLE NOTES PAYABLE, N

6. CONVERTIBLE NOTES PAYABLE, NET	12 Months Ended
	Dec. 31, 2016
Notes to Financial Statements
CONVERTIBLE NOTES PAYABLE, NET	Convertible notes payable as of December 31, 2016 consisted of the following: Balance Accrued Debt As of Principal Interest Discount December 31, 2016 6% Secured convertible note (2014) $ 330,295 $ 3,692 $ - $ 333,987 7% Convertible note ($850,000) 250,000 164,137 - 414,137 Replacement debenture with TCA ($2,830,210) 1,468,009 18,350 - 1,486,359 10% OID Convertible Promissory Note with Chicago Venture Partners, L.P. 683,042 2,670 (121,395 ) 564,317 $ 2,731,346 $ 188,849 $ (121,395 ) $ 2,798,800 Convertible notes payable as of December 31, 2015 consisted of the following: Balance Accrued Debt As of Principal Interest Discount December 31, 2015 6% Senior secured convertible notes (2012) $ 413,680 $ 172,494 $ - $ 586,174 6% Secured convertible note (2014) 350,000 30,641 (83,924 ) 296,717 7% Convertible note ($850,000) 250,000 104,137 - 354,137 7% Convertible note ($1,000,000) 250,000 134,469 - 384,469 18% Senior secured redeemable convertible debenture ($1,150,000) 1,150,000 68,510 (552,139 ) 666,371 $ 2,413,680 $ 510,251 $ (636,063 ) $ 2,287,868 Several of the Company’s convertible promissory notes remain outstanding beyond their respective maturity dates. This may trigger an event of default under the respective agreements. The Company is working with these noteholders to convert their notes into common stock and intends to resolve these outstanding issues as soon as practicable. As a result, the Company accrued interest on these notes at the default rates. Furthermore, as a result of being in default on these notes, the Holders could, at their sole discretion, call these notes. Although no such action has been taken by the Holders, the Company classified these notes as a current liability as of December 31, 2016 and 2015. 6% Senior Secured Convertible Notes Payable (2012) On September 28, 2012, the Company entered into an Amendment and Exchange Agreement with investors, including Sterling Scott, our then CEO. The Exchange Agreement provided for the issuance of new 6% Senior Secured Convertible Notes that replaced the 6% Senior Secured Convertible Notes that were previously issued during 2012. The 6% Notes accrued interest at the rate of 6% per annum and had a maturity date of April 15, 2015. No cash payments were required; however, accrued interest was due at maturity. In the event of a default the investors may declare the entire principal and accrued interest to be due and payable. Default interest accrued at the rate of 12% per annum. The 6% Notes were secured by substantially all of the assets of the Company and were convertible into common stock at the rate of $0.007 per share. The Company determined that the conversion feature was a beneficial conversion feature. As of September 10, 2014, the outstanding principal balance on Mr. Scott’s 6% convertible note was $413,680 and accrued interest were sold to two parties not related to us. On April 27, 2015, the Company entered into Amendment One of the Amended and Restated 6% Senior Secured Convertible Note, which increased the interest rate to 12% effective April 8, 2014 and extended the maturity to September 15, 2015. On July 9, 2015, the two investors each entered into Amendment Two of the Amended and Restated 6% Senior Secured Convertible Note which provide for an increase in the interest rate from 6% to 10% and the default interest rate from 12% to 20% on the 6% Senior Secured Convertible Notes for so long as the Company remains in technical default on said notes due to its delisting from its Primary Trading Market April 2014. The Company further agreed that said 20% default interest will be applied to the date of default on April 10, 2014 and continuing through the date of conversion. During the year ended December 31, 2015, the Company recorded interest expense of $26,964 and $20,486 of non-cash interest expense related to the amortization of the debt discount associated with these 6% convertible notes, respectively. As of December 31, 2015, the outstanding principal on these 6% convertible notes was $413,680, accrued interest was $172,494, and unamortized debt discount was $0, which results in a net amount of $586,174. During the year ended December 31, 2016, the Company recorded interest expense of $105,016 related to these 6% convertible notes. Two investors converted principal and interest of $413,680 and $67,418, respectively, into shares of the Company’s common stock at a per share conversion price of $0.007. As of December 31, 2016, the outstanding principal and interest on these 6% convertible notes was $0. 6% Secured Convertible Note and Secured Credit Facility (2014) The Company entered into a Secured Convertible Note and Secured Credit Facility dated June 25, 2014 with Logic Works whereby Logic Works agreed to provide up to $500,000 in funding. Each funding requires approval in advance by Logic Works, provided for interest at 6% with a default interest of 24% per annum and requires repayment by June 26, 2016. The Note is convertible into common stock of the Company at the lesser of $0.007 or (B) twenty percent (20%) of the average of the three (3) lowest daily VWAPs occurring during the twenty (20) consecutive Trading Days immediately preceding the applicable conversion date on which Logic Works elects to convert all or part of this 6% Convertible Note, subject to adjustment as provided in the Note. On July 10, 2014, the Company closed a Waiver and Modification Agreement, Amended and Restated Joint Venture Agreement, Secured Credit Facility and Secured Convertible Note with CANX, and Logic Works, a lender and shareholder of the Company. During the year ended December 31, 2015, the Company recorded interest expense of $21,000 and $177,384 of non-cash interest expense related to the amortization of the debt discount associated with these 6% convertible notes, respectively. As of December 31, 2015, the Company has borrowed $350,000 under the Secured Convertible Note and Secured Credit Facility, accrued interest was $30,641 and the unamortized debt discount was $83,924, which results in a net amount of $296,717. During the year ended December 31, 2016, the Company recorded interest expense of $20,837 and $83,924 of non-cash interest expense related to the amortization of the debt discount associated with this 6% convertible note, respectively. Logic Works converted interest of $47,386 into shares of the Company’s common stock at a per share conversion price of $0.0036. As of December 31, 2016, the Company has borrowed $330,295 under the Secured Convertible Note and Secured Credit Facility, accrued interest was $3,692 and the unamortized debt discount was $0, which results in a net amount of $333,987. 7% Convertible Notes Payable On October 11, 2013, the Company issued 7% Convertible Notes in the aggregate amount of $850,000 to investors, including $250,000 to Forglen LLC. The Note was due September 30, 2015. All other Notes were converted in 2014. On July 14, 2014, the Board of Directors approved a Settlement Agreement and Waiver of Default dated June 19, 2014 with Forglen related to the 7% Convertible Note. The Company cancelled the April 9, 2014 conversion as a result of the SEC suspension in the trading of the Company’s securities and Forglen has $250,000 of principal and interest outstanding on its note payable as of December 31, 2015 and September 30, 2016. The current annual rate of interest is 24% per annum. The conversion price was $0.007 per share. The Company determined that the conversion feature was a beneficial conversion feature. On December 20, 2013, the Company issued 7% Convertible Notes for $1,000,000, including $500,000 from Logic Works LLC. The principal balance due to Logic Works of $250,000 was due September 30, 2015. The current annual rate of interest is 24% per annum. The conversion price was $0.007 per share. The Company determined that the conversion feature was a beneficial conversion feature. During the year ended December 31, 2015, the Company recorded interest expense of $105,041 and $174,252 of non-cash interest expense related to the amortization of the debt discount associated with these 7% convertible notes, respectively. As of December 31, 2015, the outstanding principal on these 7% convertible notes was $500,000, accrued interest was $238,606, and unamortized debt discount was $0, which results in a net amount of $738,606. During the year ended December 31, 2016, the Company recorded interest expense of $0 related to these 7% convertible notes. Logic Works converted principal of $250,000 and interest of $75,149 and interest of into shares of the Company’s common stock at a per share conversion price of $0.004 to $0.007. As of December 31, 2016, the outstanding principal on these 7% convertible notes was $250,000, accrued interest was $164,137, and unamortized debt discount was $0, which results in a net amount of $414,137. Funding from TCA Global Credit Master Fund, LP (“TCA”) The First TCA SPA The Second TCA SPA Amendment to the First TCA SPA Issuance of Preferred Stock to TCA TCA’s Forbearance ● All unpaid debentures were modified as described in more detail below. ● Payments on the debentures shall be made by (i) debt purchase agreement(s) to be entered into by TCA, (ii) through proceeds raised from the transaction(s) with Chicago Venture; or (iii) by the Company directly. ● The due date of the debentures was extended to April 28, 2018. ● TCA agreed that it shall not enforce and shall forbear from pursuing enforcement of any existing defaults by us unless and until a future Company default occurs. In furtherance of TCA’s forbearance, effective as of May 4, 2016, the Company issued Second Replacement Debenture A in the principal amount of $150,000 and Second Replacement Debenture B in the principal amount of $2,681,210 (collectively, the “Second Replacement Debentures”). Per the First Amendment to the Amended and Restated Securities Purchase Agreement, the Second Replacement Debentures were combined, and apportioned into two separate replacement debentures. The Second Replacement Debentures were intended to act in substitution for and to supersede the debentures in their entirety. It was the intent of the Company and TCA that while the Second Replacement Debentures replace and supersede the debentures, in their entirety, they were not in payment or satisfaction of the debentures, but rather were the substitute of one evidence of debt for another without any intent to extinguish the old debt. As of September 30, 2016, the maximum number of shares subject to conversion under the Second Replacement Debentures is19,401,389. This is an approximation. The estimation of the maximum number of shares issuable upon the conversion of the Second Replacement Debentures was calculated using an estimated average price of $0.0036 per share. The Second Replacement Debentures contemplate TCA entering into debt purchase agreement(s) with third parties whereby TCA may, at its election, sever, split, divide or apportion the Second Replacement Debentures to accomplish the repayment of the balance owed to TCA by Company. The Second Replacement Debentures are convertible at 85% of the lowest daily volume weighted average price (“VWAP”) of the Company’s common stock during the five (5) business days immediately prior to a conversion date. In connection with the above agreements, the parties acknowledged and agreed that certain advisory fees previously paid to TCA as provided in the SPAs in the amount of $1,500.000 have been added and included within the principal balance of the Second Replacement Debentures. The advisory fees related to financial, merger and acquisition and regulatory services provided to the Company. The conversion price discount on the Second Replacement Debentures will not apply to the advisory fees added to the Second Replacement Debentures. TCA also agreed to surrender its Series B Preferred Stock in exchange for the $1,500,000 being added to the Second Replacement Debenture. As more particularly described below, the Company remains in debt to TCA for the principal amount of $1,500,000. The remaining $1,400,000 of principal debt was assigned to Old Main Capital, LLC (see discussion immediately below.) The Company intends to use the funds generated from the Chicago Venture transaction to fuel its business operations and business plans which, in turn, will presumably generate revenues sufficient to avoid another default in the remaining TCA obligations. If the Company is unable to raise sufficient funds through the Chicago Venture transaction and/or generate sales sufficient to service the remaining TCA debt then the Company will be unable to avoid another default. Failure to operate in accordance with the various agreements with TCA could result in the cancellation of these agreements, result in foreclosure on the Company’s assets in an event of default which would have a material adverse effect on our business, results of operations or financial condition. At the date of the TCA debt restructuring the remaining unamortized discount was expensed to interest in the amount of $482,112 and the Company recognized a loss on restructuring of $ 279,897. As of December 31, 2016, the Company is indebted to TCA under the First and Second Replacement Debentures in the amount of $1,468,009, accrued interest was $18,350 and the unamortized debt discount was $0, which results in a net amount of $1,486,359. During the year ended December 31. 2016, Old Main converted principal and accrued interest of $757,208 into 144,650,951 shares of our common stock at a per share conversion price of $0.0052. During the year ended December 31, 2016, Chicago Venture converted principal and accrued interest of $1,403,599 into 264,672,323 shares of our common stock at a per share conversion price of $0.0053. During the year ended December 31. 2016, the Company recorded the unamortized debt discount reversal of $750,339 related to the TCA financing as a reduction in additional paid in capital because TCA did not convert its debt but assigned its debentures to others. The Company has recorded a loss on these transactions in the amount of $2,889,540. The loss on debt conversions related to the conversion of our notes payable at prices below the market price. On January 10, 2017, Chicago Venture, at the Company’s instruction, remitted funds of $1,495,901 to TCA in order to satisfy all debts to TCA. On or around January 11, 2017, the Company was notified by TCA that $13,540 were due to TCA in order for TCA to release its security interest in the Company’s assets. On February 1, 2017, TCA notified the Company that all funds were received and TCA would release its security interest in Company’s assets. TCA has confirmed that it is paid in full and the Company is not aware of any other obligations that the Company has as to TCA. The funds received under the Chicago Venture Agreements and previous Chicago Venture Agreements were used to pay-off TCA. TCA Assignment of Debt to Old Main Capital, LLC On June 9, 2016, the Company closed a Debt Purchase Agreement and related agreements (the “Old Main Transaction Documents”) with TCA and Old Main Capital, LLC (“Old Main”) whereby TCA agreed to sell and Old Main agreed to purchase in multiple tranches $1,400,000 in senior secured convertible, redeemable debentures (the “Assigned Debt”) (the “Old Main Transaction”). The Assigned Debt was our debt incurred in the TCA financing transactions that closed in 2015. We were required to execute the Old Main Transaction Documents as the Company is the “borrower” on the Assigned Debt. Debt Purchase Agreement. Exchange Agreement. 10% Senior Convertible Promissory Note. At any time after June 9, 2016, and while the Note is still outstanding and at the sole option of Old Main, Old Main may convert all or any portion of the outstanding principal, accrued and unpaid interest redemption premium and any other sums due and payable hereunder or under any of the other Transaction Documents into shares of our Common Stock at a price equal to the lower of: (i) sixty-five percent (65%) of the lowest traded price of the Company’s Common Stock during the thirty (30) trading days prior to the Conversion Date; or (ii) sixty-five percent (65%) of the lowest traded price of the Common Stock in the thirty (30) Trading Days prior to the Closing Date. Option Agreement. On August 24, 2016, TCA terminated its Debt Purchase Agreement and related agreements with Old Main. The specific termination date is September 25, 2016, and Old Main had a right to purchase an additional $300,000 in debt from TCA. During the year ended December 31. 2016, Old Main converted principal and accrued interest of $757,208 into 144,650,951 shares of our common stock at a per share conversion price of $0.0052. Funding from Chicago Venture Partners, L.P. (“Chicago Venture”) Securities Purchase Agreement with Chicago Venture Partners, L.P. The Secured Investor Notes are payable (i) $50,000 upon filing of a Registration Statement on Form S-1; (ii) $100,000 upon effectiveness of the Registration Statement; and (iii) up to $200,000 per month over the 10 months following effectiveness at our sole discretion, subject to certain conditions. The Company filed the Registration Statement within forty-five (45) days of the Closing and agreed to register shares of our common stock for the benefit of Chicago Venture in exchange for the payments under the Secured Investor Notes. Chicago Venture has the option to convert the Note at 65% of the average of the three (3) lowest volume weighted average prices in the twenty (20) Trading Days immediately preceding the applicable conversion (the “Conversion Price”). However, in no event will the Conversion Price be less than $0.02 or greater than $0.09. In addition, beginning on the date that is the earlier of six (6) months or five (5) days after the Registration Statement becomes effective, and on the same day of each month thereafter, the Company will re-pay the Note in monthly installments in cash, or, subject to certain Equity Conditions, in the Company’s common stock at 65% of the average of the three (3) lowest volume weighted average prices in the twenty (20) Trading Days immediately preceding the applicable conversion (the “Installment Conversion Price”). As discussed above, once effective, the Company has the discretion to require Chicago Venture to sell to us up to $200,000 per month over the next 10 months on the above terms. The Company would then have the option to issue shares registered under this Registration Statement to Chicago Venture. Through this prospectus, the selling stockholder may offer to the public for resale shares of the Company’s common stock that we may issue to Chicago Venture pursuant to the Chicago Venture Note. For a period of no more than 36 months from the effective date of the Registration Statement, we may, from time to time, at the Company’s sole discretion, and subject to certain conditions that we must satisfy, draw down funds under the Chicago Venture Note. The Company’s ability to require Chicago Venture to fund the Chicago Venture Note is at its discretion, subject to certain limitations. Chicago Venture is obligated to fund if each of the following conditions are met; (i) the average and median daily dollar volumes of the Company’s common stock for the twenty (20) and sixty (60) trading days immediately preceding the funding date are greater than $100,000; (ii) the Company’s market capitalization on the funding date is greater than $17,000,000; (iii) the Company is not in default with respect to share delivery obligations under the note as of the funding date; and (iv) the Company is current in its reporting obligations. Chicago Venture’ obligations under the equity line are not transferable. The issuance of the Company’s common stock under the Chicago Venture Note will have no effect on the rights or privileges of existing holders of common stock except that the economic and voting interests of each stockholder will be diluted as a result of any such issuance. Although the number of shares of common stock that stockholders presently own will not decrease, these shares will represent a smaller percentage of the Company’s total shares that will be outstanding after any issuances of shares of common stock to Chicago Venture. If the Company’s draw down amounts under the Chicago Venture Note when the Company’s share price is decreasing, the Company will need to issue more shares to repay the same amount than if the Company’s stock price was higher. Such issuances will have a dilutive effect and may further decrease our stock price. There is no guarantee that the Company will be able to meet the foregoing conditions or any other conditions under the Securities Purchase Agreement and/or Chicago Venture Note or that the Company will be able to draw down any portion of the amounts available under the Securities Purchase Agreement and/or Chicago Venture Note. However, the Company does believe there is a strong likelihood, as long as we can meet the various conditions to funding, that the Company will receive the full amount of funding under the equity line of credit. Given the Company’s financial challenges and the competitive nature of our business, the Company also believes it will need the full amount of funding under the equity line of credit in order to fully realize the business plans. A portion of the funds received from Chicago Venture will be used to pay off TCA, a previous equity financing partner and a portion will be invested in our business. Specifically, the Company anticipates that approximately $1,400,000 is expected to be used to pay TCA and the remaining funds, if any, will be used for general business purposes such as marketing, product development, expansion and administrative costs. The Company is not aware of any relationship between TCA and Chicago Venture. The Company has had no previous transactions with Chicago Venture or any of Chicago Venture’s affiliates. The Company cannot predict whether the Chicago Venture transaction will have either a positive or negative impact on our stock price. However, in addition to the fact that each Chicago Venture conversion, when and if it occurs, has a dilutive effect on the Company’s stock price, that should Chicago Venture convert large portions of the debt into registered shares and then sells those shares on the market, that the Company’s stock price could be depressed. As of December 31, 2016, the outstanding balance due to Chicago Venture is $683,042, accrued interest was $2,670, net of the OID of $121,395, which results in a net amount of $564,317. The OID has been recorded as a discount to debt and will be amortized over the life of the loan. During the year ended December 31. 2016, Chicago Venture converted principal and accrued interest of $1,403,599 into 264,672,323 shares of our common stock at a per share conversion price of $0.0053. On January 10, 2017, Chicago Venture, at the Company’s instruction, remitted funds of $1,495,901 to TCA in order to satisfy all debts to TCA. On or around January 11, 2017, the Company was notified by TCA that $13,540 were due to TCA in order for TCA to release its security interest in the Company’s assets. On February 1, 2017, TCA notified the Company that all funds were received and TCA would release its security interest in Company’s assets. TCA has confirmed that it is paid in full and the Company is not aware of any other obligations that the Company has as to TCA. The funds received under the Chicago Venture Agreements and previous Chicago Venture Agreements were used to pay-off TCA. Debt Purchase Agreement and First Amendment to Debt Purchase Agreement and Note Assignment Agreement On August 24, 2016, TCA closed an Assignment of Note Agreement and related agreements with Chicago Venture. The referenced agreements relate to the assignment of Company debt, in the form of debentures, by TCA to Chicago Venture. The Company was a party to the agreements between TCA and Chicago Venture because the Company is the “borrower” under the TCA held debentures. Exchange Agreement, Convertible Promissory Note and related Agreements with Chicago Venture According to the Exchange Agreement, the debt is to be assigned in tranches, with the first tranche of debt assigned from TCA to Chicago Venture being $128,000 which is represented by an Initial Exchange Note as defined in the Exchange Agreement.

7. DERIVATIVE LIABILITY

7. DERIVATIVE LIABILITY	12 Months Ended
	Dec. 31, 2016
Notes to Financial Statements
DERIVATIVE LIABILITY	In April 2008, the FASB issued a pronouncement that provides guidance on determining what types of instruments or embedded features in an instrument held by a reporting entity can be considered indexed to its own stock for the purpose of evaluating the first criteria of the scope exception in the pronouncement on accounting for derivatives. This pronouncement was effective for financial statements issued for fiscal years beginning after December 15, 2008. The adoption of these requirements can affect the accounting for warrants and many convertible instruments with provisions that protect holders from a decline in the stock price (or “down-round” provisions). For example, warrants or conversion features with such provisions are no longer recorded in equity. Down-round provisions reduce the exercise price of a warrant or convertible instrument if a company either issues equity shares for a price that is lower than the exercise price of those instruments or issues new warrants or convertible instruments that have a lower exercise price. Derivative liability as of December 31, 2016 is as follows: Carrying Fair Value Measurements Using Inputs Amount at Financial Instruments Level 1 Level 2 Level 3 December 31, 2016 Liabilities: Derivative Instruments $ - $ 2,701,559 $ - $ 2,701,559 Total $ - $ 2,701,559 $ - $ 2,701,559 For the year ended December 31, 2016, the Company recorded non-cash income of $1,324,384 related to the “change in fair value of derivative” expense related to its 6%, 7% and 18% convertible notes Derivative liability as of December 31, 2015 is as follows: Carrying Fair Value Measurements Using Inputs Amount at Financial Instruments Level 1 Level 2 Level 3 December 31, 2015 Liabilities: Derivative Instruments $ - $ 1,377,175 $ - $ 1,377,175 Total $ - $ 1,377,175 $ - $ 1,377,175 For the year ended December 31, 2015, the Company recorded non-cash income of $723,740 related to the “change in fair value of derivative” expense related to its 6%, 7% and 18% convertible notes. The risk-free rate of return reflects the interest rate for the United States Treasury Note with similar time-to-maturity to that of the warrants. 7% Convertible Notes As of December 31, 2015, the Company had outstanding 7% convertible notes for $500,000 that the Company determined had an embedded derivative liability due to the “reset” clause associated with the note’s conversion price. The Company valued the derivative liability of these notes at $105,515 using the Black-Scholes-Merton option pricing model, which approximates the Monte Carlo and other binomial valuation techniques, with the following assumptions (i) dividend yield of 0%; (ii) expected volatility of 133.2%; (iii) risk free rate of .001%, (iv) stock price of $.005, (v) per share conversion price of $0.007, and (vi) expected term of .25 years, as the Company estimated that these notes would be converted by March 31, 2016. As of December 31, 2016, the Company had outstanding 7% convertible notes with a remaining balance of $250,000 that the Company determined had an embedded derivative liability due to the “reset” clause associated with the note’s conversion price. The Company valued the derivative liability of these notes at $1,495,495 using the Black-Scholes-Merton option pricing model, which approximates the Monte Carlo and other binomial valuation techniques, with the following assumptions (i) dividend yield of 0%; (ii) expected volatility of 160.0%; (iii) risk free rate of .001%, (iv) stock price of $0.017, (v) per share conversion price of $0.0036, and (vi) expected term of .25 years, as the Company estimates that the balance of these notes will be converted by March 31, 2017. 6% Convertible Notes As of December 31, 2015, the Company had outstanding unsecured 6% convertible notes for $350,000 that the Company determined were a derivative liability due to the “reset” clause associated with the note’s conversion price. The Company valued the derivative liability of these notes at $54,377 using the Black-Scholes-Merton option pricing model. which approximates the Monte Carlo and other binomial valuation techniques, with the following assumptions (i) dividend yield of 0%; (ii) expected volatility of 133.2%; (iii) risk free rate of 0.34%, (iv) stock price of $0.005, (v) per share conversion price of $0.007, and (vi) expected term of .56 years. As of December 31, 2016, the Company had outstanding unsecured 6% convertible notes for $330,295 that the Company determined had an embedded derivative liability due to the “reset” clause associated with the note’s conversion price. The Company valued the derivative liability of these notes at $1,206,064 using the Black-Scholes-Merton option pricing model, which approximates the Monte Carlo and other binomial valuation techniques, with the following assumptions (i) dividend yield of 0%; (ii) expected volatility of 160.0%; (iii) risk free rate of .001%, (iv) stock price of $0.017, (v) per share conversion price of $0.0036, and (vi) expected term of .25 years, as the Company estimates that these notes will be converted by March 31, 2017. Funding from TCA Global Credit Master Fund, LP (“TCA”). The First TCA SPA The Second TCA SPA Amendment to the First TCA SPA Issuance of Preferred Stock to TCA TCA’s Forbearance ● All unpaid debentures were modified as described in more detail below. ● Payments on the debentures shall be made by (i) debt purchase agreement(s) to be entered into by TCA, (ii) through proceeds raised from the transaction(s) with Chicago Venture; or (iii) by the Company directly. ● The due date of the debentures was extended to April 28, 2018. ● TCA agreed that it shall not enforce and shall forbear from pursuing enforcement of any existing defaults by us unless and until a future Company default occurs. In furtherance of TCA’s forbearance, effective as of May 4, 2016, the Company issued Second Replacement Debenture A in the principal amount of $150,000 and Second Replacement Debenture B in the principal amount of $2,681,210 (collectively, the “Second Replacement Debentures”). Per the First Amendment to Amended and Restated Securities Purchase Agreement, the Second Replacement Debentures were combined, and apportioned into two separate replacement debentures. The Second Replacement Debentures were intended to act in substitution for and to supersede the debentures in their entirety. It was the intent of the Company and TCA that while the Second Replacement Debentures replace and supersede the debentures, in their entirety, they were not in payment or satisfaction of the debentures, but rather were the substitute of one evidence of debt for another without any intent to extinguish the old debt. As of September 30, 2016, the maximum number of shares subject to conversion under the Second Replacement Debentures is 19,401,389. This is an approximation. The estimation of the maximum number of shares issuable upon the conversion of the Second Replacement Debentures was calculated using an estimated average price of $.0036 per share. The Second Replacement Debentures contemplate TCA entering into debt purchase agreement(s) with third parties whereby TCA may, at its election, sever, split, divide or apportion the Second Replacement Debentures to accomplish the repayment of the balance owed to TCA by Company. The Second Replacement Debentures are convertible at 85% of the lowest daily volume weighted average price (“VWAP”) of the Company’s common stock during the five (5) business days immediately prior to a conversion date. In connection with the above agreements, the parties acknowledged and agreed that certain advisory fees previously paid to TCA as provided in the SPAs in the amount of $1,500,000 have been added and included within the principal balance of the Second Replacement Debentures. The advisory fees related too financial, merger and acquisition and regulatory services provided to the Company. The conversion price discount on the Second Replacement Debentures will not apply to the advisory fees added to the Second Replacement Debentures. TCA also agreed to surrender its Series B Preferred Stock in exchange for the $1,500,000 being added to the Second Replacement Debenture. As more particularly described below, the Company’s remain in debt to TCA for the principal amount of $1,500,000. The remaining $1,400,000 of principal debt was assigned to Old Main Capital, LLC (see discussion immediately below.) The Company intends to use the funds generated from the Chicago Venture transaction to fuel its business operations and business plans which, in turn, will presumably generate revenues sufficient to avoid another default in the remaining TCA obligations. If the Company is unable to raise sufficient funds through the Chicago Venture transaction and/or generate sales sufficient to service the remaining TCA debt then the Company will be unable to avoid another default. Failure to operate in accordance with the various agreements with TCA could result in the cancellation of these agreements, result in foreclosure on the Company’s assets in an event of default which would have a material adverse effect on our business, results of operations or financial condition. On July 9, 2015, the Company valued the conversion feature as a derivative liability of this senior secured convertible redeemable debenture at $888,134 and discounted debt by $700,000 and recorded interest expense of $188,134. The Company valued the derivative liability of this debenture at $888,134 using the Black-Scholes-Merton option pricing model. which approximates the Monte Carlo and other binomial valuation techniques, with the following assumptions (i) dividend yield of 0%; (ii) expected volatility of 160.0%; (iii) risk free rate of 0.25%, (iv) stock price of $0.02, (v) per share conversion price of $0.011, and (vi) expected term of 1.0 years. At the inception of the Replacement Debentures, the embedded derivative liability was remeasured at fair value and the Company recorded a net gain of $420,822, using the Black-Scholes-Merton option pricing model which approximates the Monte Carlo and other binomial valuation techniques, with the following assumptions (i) dividend yield of 0%; (ii) expected volatility of 150.0%; (iii) risk free rate of 0.001%, (iv) stock price of $0.015, (v) per share conversion price of $0.013, and (vi) expected term of 1.0 year. At inception, the Company valued the conversion feature of the Replacement Debentures as a derivative liability in the amount of $979,716 using the Black-Scholes-Merton option pricing model. which approximates the Monte Carlo and other binomial valuation techniques, with the following assumptions (i) dividend yield of 0%; (ii) expected volatility of 150.0%; (iii) risk free rate of .52%, (iv) stock price of $.015, (v) per share conversion price of $0.013, and (vi) expected term of 1.0 years, as the Company estimated that the Replacement Debentures will be converted by September 30, 2017. The amount was recorded as a discount to debt and will be amortized over the life of the debentures. As of December 31, 2016, the Company remaining debt was below $1,500,000 and does not include a derivative liability.

8. RELATED PARTY TRANSACTIONS A

8. RELATED PARTY TRANSACTIONS AND CERTAIN RELATIONSHIPS	12 Months Ended
	Dec. 31, 2016
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS AND CERTAIN RELATIONSHIPS	Since January 1, 2015, the Company engaged in the following reportable transactions with our directors, executive officers, holders of more than 5% of our voting securities, and affiliates or immediately family members of our directors, executive officers and holders of more than 5% of our voting securities. Certain Relationships Please see the transactions with CANX, LLC and Logic Works in Note 5, TCA Global Credit Master Fund LP and Chicago Venture Partners, L.P. discussed in Note 4, 6, 7 and 13. Transactions with an Entity Controlled by Marco Hegyi An entity controlled by Mr. Hegyi received a warrant to purchase up to twenty five million shares of our common stock at an exercise price of $0.08 per share was reduced to $0.01 per share on December 18, 2015. On April 15, 2016, the Company issued 1,000,000 shares of its common stock to an entity affiliated with Marco Hegyi, our Chief Executive Officer, pursuant to a conversion of debt for $20,000. The shares were valued at the fair market price of $0.02 per share. On October 12, 2016, the Company issued 4,000,000 shares of its common stock to an entity affiliated with Marco Hegyi, pursuant to a conversion of debt for $40,000. The shares were valued at the fair market price of $0.01 per share. On October 21, 2016, the Company entered into Agreement with Marco Hegyi pursuant to which the Company engaged Mr. Hegyi as its Chief Executive Officer through October 20, 2018. Mr. Hegyi’s previous Employment Agreement was dated December 4, 2013 and which is set to expire on December 4, 2016. Mr. Hegyi received a Warrant to purchase up to 10,000,000 shares of common stock of the Company at an exercise price of $0.01 per share. In addition, Mr. Hegyi received Warrants to purchase up to 10,000,000 shares of common stock of the Company at an exercise price of $0.01 per share which vest on October 21, 2017 and 2018. The Warrants are exercisable for 5 years. Transactions with an Entity Controlled by Mark E. Scott An entity controlled by Mr. Scott received an option to purchase sixteen million shares of our common stock at an exercise price of $0.07 per share was reduced to $0.01 per share on December 18, 2015. Two million shares vested on August 17, 2015 with the Company’s resolution of the class action lawsuits. An additional two million share stock option vest on April 18, 2016 upon the Company securing a market maker with an approved 15c2-11 resulting in the Company’s relisting on OTCBB. On January 4, 2016, the Company issued 3,000,000 shares of its common stock to an entity affiliated with Mark E. Scott, our Chief Financial Officer, pursuant to a conversion of accrued consulting fees and expenses for $30,000. The shares were valued at the fair market price of $0.01 per share. On October 21, 2016, an entity affiliated with Mr. Scott converted $40,000 in accrued consulting fees and expenses into 4,000,000 shares of the Company’s common stock at $0.01 per share. The price per share was based on the thirty-day trailing average. On October 21, 2016, an entity affiliated with Mr. Scott was granted 6,000,000 shares of the Company’s common stock at $0.01 per share. The price per share was based on the thirty-day trailing average. On October 21, 2016, an entity affiliated with Mr. Scott cancelled stock option grants totaling 12,000,000 shares of the Company’s common stock at $0.01 per share. Transactions with Michael E. Fasci On January 27, 2016, the Company issued 1,500,000 shares of its common stock to Michael E. Fasci, a Board Director, pursuant to a service award for $15,000. The shares were valued at the fair market price of $0.01 per share. On May 25, 2016, the Company issued 2,500,000 shares of its common stock to Michael E. Fasci pursuant to a service award for $50,000. The shares were valued at the fair market price of $0.02 per share. On October 21, 2016, the Company entered into a Consulting Agreement with an entity controlled by Michael E. Fasci. Mr. Fasci agreed to provide services related to lender management, financing and acquisitions. Mr. Fasci’s compensation is 2,000,000 shares of our common stock valued at $0.01 per share and to be issued on April 21, 2017 and October 21, 2017.

9. EQUITY

9. EQUITY	12 Months Ended
	Dec. 31, 2016
Equity [Abstract]
EQUITY	Authorized Capital Stock The Company has authorized 3,010,000,000 shares of capital stock, of which 3,000,000,000 are shares of voting common stock, par value $0.0001 per share, and 10,000,000 are shares of preferred stock, par value $0.0001 per share. Non-Voting Preferred Stock Under the terms of our articles of incorporation, the Company’s board of directors is authorized to issue shares of non-voting preferred stock in one or more series without stockholder approval. The Company’s board of directors has the discretion to determine the rights, preferences, privileges and restrictions, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of non-voting preferred stock. The purpose of authorizing the Company’s board of directors to issue non-voting preferred stock and determine the Company’s rights and preferences is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of non-voting preferred stock, while providing flexibility in connection with possible acquisitions, future financings and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or could discourage a third party from seeking to acquire, a majority of our outstanding voting stock. Other than the Series B and C Preferred Stock discussed below, there are no shares of non-voting preferred stock presently outstanding and we have no present plans to issue any shares of preferred stock. Series B Preferred Stock Designation In connection with the Amended and Restated Securities Purchase Agreement, the Board of Directors, on October 21, 2015, approved the authorization of a Series B Preferred Stock as provided in our Certificate of Incorporation, as amended. The Series B Preferred Stock has authorized 150,000 shares with a stated value equal to $10.00 per share. Dividends payable to other classes of stock are restricted until repayment of the aggregate value of Series B Preferred Stock. Upon the Company’s liquidation or dissolution, Series B Preferred Stock has no priority or preference with respect to distributions of any assets by the Company. The Series B Preferred Stock is convertible into common stock by dividing the stated value of the shares being converted by 100% of the average of the five lowest closing bid prices for the common stock during the ten consecutive trading days immediately preceding the conversion date as quoted by Bloomberg, LP. TCA was issued 150,000 shares of Series B Preferred Stock. However, in no event will Purchaser be entitled to hold in excess of 4.99% of the outstanding shares of common stock of the Company. In connection with the First Amendment to Amended and Restated Securities Purchase Agreement, TCA surrendered the Series B Preferred Stock. Series C Preferred Stock Designation In connection with the Amended and Restated Securities Purchase Agreement, the Board of Directors, on October 21, 2015, approved the authorization of a Series C Preferred Stock as provided in the Company’s Certificate of Incorporation, as amended, and the issuance of 51 shares of Series C Preferred Stock. These shares only have voting rights in the event of a default by us under the Amended and Restated Transaction Documents. The Series C Preferred Stock is cancelled with the repayment of the TCA debt. The Series C Preferred Stock Designation authorizes 51 shares of Series C Preferred Stock. Series C Preferred Stock is not entitled to dividend or liquidation rights and is not convertible into our common stock. In the event of a default under the Amended and Restated Transaction Documents, each share of Series C Preferred Stock shall have voting votes equal to 0.019607 multiplied by the total issued and outstanding common stock and preferred stock eligible to vote divided by .49 minus the numerator. For example, if the total issued and outstanding common stock eligible to vote is 5,000,000, the voting rights of one share of Series C Preferred Stock shall be equal to 102,036 (e.g. ((0.019607 x 5,000,000/0.49) – (0.019607 x 5,000,000) = 102,036). In the event of a default under the Amended and Restated TCA Transaction Documents, TCA can exercise voting control over our common stock. In connection with the closing of the Chicago Venture transactions which closed on February 1, 2017, TCA surrendered the Series C Preferred Stock. Common Stock Unless otherwise indicated, all of the following sales or issuances of Company securities were conducted under the exemption from registration as provided under Section 4(2) of the Securities Act of 1933 (and also qualified for exemption under 4(5), formerly 4(6) of the Securities Act of 1933, except as noted below). All of the shares issued were issued in transactions not involving a public offering, are considered to be restricted stock as defined in Rule 144 promulgated under the Securities Act of 1933 and stock certificates issued with respect thereto bear legends to that effect. The Company has compensated consultants and service providers with restricted common stock during the development of our business and when our capital resources were not adequate to provide payment in cash. During the year ended December 31, 2016, the Company had had the following sales of unregistered of equity securities to accredited investors unless otherwise indicated: On January 4, 2016, the Company issued 3,000,000 shares of its common stock to an entity affiliated with Mark E. Scott, our Chief Financial Officer, pursuant to a conversion of accrued consulting fees and expenses for $30,000. The shares were valued at the fair market price of $0.01 per share. On October 21, 2016, an entity affiliated with Mr. Scott converted $40,000 in accrued consulting fees and expenses into 4,000,000 shares of the Company’s common stock at $0.01 per share. The price per share was based on the thirty-day trailing average. On October 21, 2016, an entity affiliated with Mr. Scott was granted 6,000,000 shares of the Company’s common stock at $0.01 per share. The price per share was based on the thirty-day trailing average. On October 21, 2016, an entity affiliated with Mr. Scott cancelled stock option grants totaling 12,000,000 shares of the Company’s common stock at $0.01 per share. On January 27, 2016, the Company issued 1,500,000 shares of its common stock to Michael E. Fasci, a Board Director, pursuant to a service award for $15,000. The shares were valued at the fair market price of $0.01 per share. On May 25, 2016, the Company issued 2,500,000 shares of its common stock to Michael E. Fasci pursuant to a service award for $50,000. The shares were valued at the fair market price of $0.02 per share. In consideration for advisory services provided by TCA to the Company, the Company issued 15,000,000 shares of Common Stock during the year ending December 31, 2015. As the common stock was conditionally redeemable, the Company recorded the common stock as mezzanine equity in the accompanying consolidated balance sheet as of December 31, 2015. As of September 30, 2016, the shares are no longer conditionally redeemable and were recorded as issued and outstanding common stock. The Company issued $2 million in common stock or 115,141,048 shares of our common stock on April 6, 2016 pursuant to the settlement of the Consolidated Class Action and Derivative Action lawsuits alleging violations of federal securities laws that were filed against the Company in United States District Court, Central District of California. The Company accrued $2,000,000 as loss on class action lawsuits and contingent liabilities during the year ending December 31, 2015. On April 15, 2016, the Company issued 1,000,000 shares of its common stock to an entity affiliated with Marco Hegyi, our Chief Executive Officer, pursuant to a conversion of debt for $20,000. The shares were valued at the fair market price of $0.02 per share. On October 12, 2016, the Company issued 4,000,000 shares of its common stock to an entity affiliated with Marco Hegyi, pursuant to a conversion of debt for $40,000. The shares were valued at the fair market price of $0.01 per share. On July 13, 2016, the Company issued 6,000,000 shares of common stock pursuant to Settlement Agreement and Release with Mr. Robert Hunt, a former executive, which were valued at the fair market price of $0.010 per share. On October 21, 2016, the Company issued 5,020,000 shares to two former directors and a supplier (unaccredited) for services provided. The Company valued the 5,020,000 shares at $0.01 per share or $50,200. During the year ended December 31. 2016, the Company issued 6,400,000 shares of its common stock to two service providers (one unaccredited) pursuant to conversions of debt totaling $64,000. The shares were valued at the fair market price of $0.010 per share. During the year ended December 31. 2016, Holders of the Company’s Convertible Notes Payables, converted principal and accrued interest of $1,080,247 into 186,119,285 shares of the Company’s common stock at a per share conversion price of $0.006. During the year ended December 31. 2016, Old Main converted principal and accrued interest of $757,208 into 144,650,951 shares of our common stock at a per share conversion price of $0.0052. During the year ended December 31. 2016, Chicago Venture converted principal and accrued interest of $1,403,599 into 264,672,323 shares of our common stock at a per share conversion price of $0.0053. During the year ended December 31, 2015, the Company had had the following sales of unregistered sales of equity securities: On June 16, 2015, the Company issued 7,772,725 shares of its common stock to a supplier pursuant a conversion of debt for $171,000. The shares were valued at the fair market price of $0.022 per share. On December 18, 2015, the Company issued 2,000,000 shares to two if its former independent Board Directors. The Company valued the 4,000,000 shares at $0.01 per share or $40,000. Warrants The Company issued the following warrants during the year ended December 31, 2016. On October 21, 2016, Mr. Hegyi received a Warrant to purchase up to 10,000,000 shares of common stock of the Company at an exercise price of $0.01 per share. In addition, Mr. Hegyi received Warrants to purchase up to 10,000,000 shares of common stock of the Company at an exercise price of $0.01 per share which vest on October 21, 2017 and 2018. The Warrants are exercisable for 5 years. The warrants were valued at $390,000 and the Company recorded $23,958 of compensation expense for the warrants that had vested at December 31, 2016. A summary of the warrants issued as of December 31, 2016 is as follows: December 31, 2016 Weighted Average Exercise Shares Price Outstanding at beginning of period 565,000,000 $ 0.032 Issued 30,000,000 0.010 Exercised - - Forfeited - - Expired - - Outstanding at end of period 595,000,000 $ 0.031 Exerciseable at end of period 595,000,000 A summary of the status of the warrants outstanding as of December 31, 2016 is presented below: December 31, 2016 Weighted Weighted Weighted Average Average Average Number of Remaining Exercise Shares Exercise Warrants Life Price Exerciseable Price 540,000,000 2.31 $ 0.033 540,000,000 $ 0.033 55,000,000 3.54 0.010 35,000,000 0.010 595,000,000 2.34 $ 0.031 575,000,000 $ 0.032 Warrants totaling 35,000,000 shares of common stock had an intrinsic value of $245,000 as of December 31, 2016.

10. STOCK OPTIONS

10. STOCK OPTIONS	12 Months Ended
	Dec. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
STOCK OPTIONS	Description of Stock Option Plan In fiscal year 2011, the Company authorized a Stock Incentive Plan whereby a maximum of 18,870,184 shares of the Company’s common stock could be granted in the form of Non-Qualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, and Other Stock-Based Awards. On April 18, 2013, the Company’s Board of Directors voted to increase to 35,000,000 the maximum allowable shares of the Company’s common stock allocated to the 2011 Stock Incentive Plan. The Company has outstanding unexercised stock option grants totaling 12,010,000 shares as of December 31, 2016. All grants are non-qualified as the plan was not approved by the shareholders within one year of its adoption. Determining Fair Value under ASC 505 The Company records compensation expense associated with stock options and other equity-based compensation using the Black-Scholes-Merton option valuation model for estimating fair value of stock options granted under our plan. The Company amortizes the fair value of stock options on a ratable basis over the requisite service periods, which are generally the vesting periods. The expected life of awards granted represents the period of time that they are expected to be outstanding. The Company estimates the volatility of our common stock based on the historical volatility of its own common stock over the most recent period corresponding with the estimated expected life of the award. The Company bases the risk-free interest rate used in the Black Scholes-Merton option valuation model on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term equal to the expected life of the award. The Company has not paid any cash dividends on our common stock and does not anticipate paying any cash dividends in the foreseeable future. Consequently, the Company uses an expected dividend yield of zero in the Black-Scholes-Merton option valuation model and adjusts share-based compensation for changes to the estimate of expected equity award forfeitures based on actual forfeiture experience. The effect of adjusting the forfeiture rate is recognized in the period the forfeiture estimate is changed. Stock Option Activity During the year ended December 31, 2016, the Company had the following stock option activity: An entity controlled by Mr. Scott had a two million share stock option that was previously issued vest on April 18, 2016 upon the Company securing a market maker with an approved 15c2-11 resulting in the Company’s relisting on OTCBB. An employee resigned January 13, 2016 and an option to purchase five million shares of the Company’s common stock under the Company’s 2011 Stock Incentive Plan expired on April 13, 2016. An employee forfeited a stock grant for 10,000 shares of the Company’s common stock during the nine months ended September 30, 2016. On October 12, 2016, the Company amended the exercise price of the stock option grants for Mr. Barnes to $0.010 per share. On October 21, 2016, Mr. Scott cancelled stock option grants totaling 12,000,000 shares of the Company’s common stock at $0.01 per share. Mr. Scott has an additional 2,000,000 share stock option grant which continues to vest monthly over 36 months and a 2,000,000 share stock option grant which vests upon the achievement of certain performance goals related to acquisitions. During the year ended December 31, 2015, the Company had the following stock option activity: Mr. Adam Edwards resigned July 11, 2015 and an option to purchase four million five hundred thousand shares of the Company’s common stock under the Company’s 2011 Stock Incentive Plan at $0.05 per shares expired on October 10, 2015. Ms. Tina Qunell resigned July 2, 2015 and an option to purchase seven million shares of the Company’s common stock under the Company’s 2011 Stock Incentive Plan at $0.05 per share expired on October 1, 2015. Resigned employees forfeited options to purchase 200,000 shares of the Company’s common stock under the Company’s 2011 Stock Incentive Plan at $0.05 per share expired during the year ended December 31, 2015. As of December 31, 2016, there are 12,010,000 options to purchase common stock at an average exercise price of $0.010 per share outstanding under the 2011 Stock Incentive Plan. The Company recorded $121,770 and $175,661 of compensation expense, net of related tax effects, relative to stock options for the years ended December 31, 2016 and 2015 in accordance with ASC 505. Net loss per share (basic and diluted) associated with this expense was approximately ($0.00). As of December 31, 2016, there is $22,631 of total unrecognized costs related to employee granted stock options that are not vested. These costs are expected to be recognized over a period of approximately 2.88 years. Stock option activity for the years ended December 31, 2016 and 2015 is as follows: Weighted Average Options Exercise Price $ Outstanding as of December 31, 2014 40,720,000 $ 0.058 $ 2,356,000 Granted - - (960,000 ) Exercised - - - Forfeitures (11,700,000 ) (0.050 ) (585,000 ) Outstanding as of December 31, 2015 29,020,000 0.028 811,000 Granted - - - Exercised - - - Forfeitures (17,010,000 ) (0.041 ) (690,500 ) Outstanding as of December 31, 2016 12,010,000 $ 0.010 $ 120,500 The following table summarizes information about stock options outstanding and exercisable at December 31, 2016: Weighted Weighted Weighted Average Average Average Range of Number Remaining Life Exercise Price Number Exercise Price Exercise Prices Outstanding In Years Exerciseable Exerciseable Exerciseable $ 0.05 10,000 3.11 $ 0.050 6,667 $ 0.050 0.01 12,000,000 2.88 0.010 8,277,778 0.010 12,010,000 2.88 $ 0.010 8,284,444 $ 4 0.010 Stock option grants totaling 12,010,000 shares of common stock have an intrinsic value of $84,070 as of December 31, 2016.

11. COMMITMENTS, CONTINGENCIES

11. COMMITMENTS, CONTINGENCIES AND LEGAL PROCEEDINGS	12 Months Ended
	Dec. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS, CONTINGENCIES AND LEGAL PROCEEDINGS	Legal Proceedings The Company is involved in the disputes and legal proceedings described below. In addition, as a public company, the Company is also potentially susceptible to litigation, such as claims asserting violations of securities laws. Any such claims, with or without merit, if not resolved, could be time-consuming and result in costly litigation. The Company accrues any contingent liabilities that are likely. Class Actions Alleging Violations of Federal Securities Laws Beginning on April 18, 2014, three class action lawsuits alleging violations of federal securities laws were filed against the Company in United States District Court, Central District of California (the “Court”). On May 15, 2014 and August 4, 2014, respectively two shareholder derivative lawsuits were filed against the Company with the Court (the “Derivative Actions”). On October 20, 2014, AmTrust North America, our insurer, filed a lawsuit contesting insurance coverage on the above legal proceedings. The Company accrued $2,000,000 as settlement of the Consolidated Class Action and Derivative Action lawsuits alleging violations of federal securities laws that were filed against the Company during the year ending December 31, 2015. The Company issued $2 million in common stock or 115,141,048 shares of the Company’s common stock on April 6, 2016 pursuant to the settlement of the Consolidated Class Action and Derivative Action lawsuits alleging violations of federal securities laws that were filed against the Company in United States District Court, Central District of California. Sales, Payroll and Other Tax Liabilities As of December 31, 2016, the Company owes approximately $128,989 in sales tax. Potential Convertible Note Defaults Several of the Company’s convertible promissory notes remain outstanding beyond their respective maturity dates. This may trigger an event of default under the respective agreements. The Company is working with these noteholders to convert their notes into common stock and intends to resolve these outstanding issues as soon as practicable. Other Legal Proceedings The Company been sued for non-payment of lease payments at closed stores in Boulder, Colorado and Plaistow, New Hampshire. The Company is currently subject to legal actions with various vendors. It is possible that additional lawsuits may be filed and served on the Company. Operating Leases On December 7, 2016, the Company entered into entered into a Consent to Judgement and Settlement Agreement related to its retail hydroponics store located in Portland, Maine. This Agreement provides for a monthly lease payment of $4,668 through May 2, 2017. If the Company is in compliance with the Settlement Agreement, it can can extend the lease from May 2, 2017 to May 1, 2020 at the monthly lease payment of $5,373. The Company also agreed to a repayment schedule for past due rent of $70,013. The Company does not have an option to extend the lease after May 1, 2020. On October 21, 2013, the Company entered into a lease agreement for retail space for its hydroponics store in Avon (Vail), Colorado. The lease expires on September 30, 2018. Monthly rent for year one of the lease is $2,606 and increases 3.5% per year thereafter through the end of the lease. The Company does not have an option to extend the lease. On May 31, 2016, the Company rented space at 5400 Carillon Point, Kirkland, Washington 98033 for $1,539 per month for its corporate office. The Company’s agreement expires May 31, 2017 and can be extended. The aggregate future minimum lease payments under operating leases, to the extent the leases have early cancellation options and excluding escalation charges, are as follows: Years Ended December 31, Total 2017 $ 115,205 2018 15,579 2019 0 2020 0 2021 - Beyond - Total $ 130,784 Employment and Consulting Agreements Employment Agreement with Marco Hegyi On October 21, 2016, the Company entered into an Employment Agreement with Marco Hegyi pursuant to which the Company engaged Mr. Hegyi as its Chief Executive Officer through October 20, 2018. Mr. Hegyi’s previous Employment Agreement was dated December 4, 2013 and which is set to expire on December 4, 2016. Mr. Hegyi’s annual compensation is $250,000. Mr. Hegyi is also entitled to receive an annual bonus equal to four percent (4%) of the Company’s EBITDA for that year. The annual bonus shall be paid no later than 31 days following the end of each calendar year. Mr. Hegyi received a Warrant to purchase up to 10,000,000 shares of common stock of the Company at an exercise price of $0.01 per share. In addition, Mr. Hegyi received Warrants to purchase up to 10,000,000 shares of common stock of the Company at an exercise price of $0.01 per share which vest on October 21, 2017 and 2018. The Warrants are exercisable for 5 years. Mr. Hegyi will be entitled to participate in all group employment benefits that are offered by the Company to the Company’s senior executives and management employees from time to time, subject to the terms and conditions of such benefit plans, including any eligibility requirements. In addition, the Company will purchase and maintain during the Term an insurance policy on Mr. Hegyi’s life in the amount of $2,000,000 payable to Mr. Hegyi’s named heirs or estate as the beneficiary. If the Company terminates Mr. Hegyi’s employment at any time prior to the expiration of the Term without Cause, as defined in the Employment Agreement, or if Mr. Hegyi terminates his employment at any time for “Good Reason” or due to a “Disability”, Mr. Hegyi will be entitled to receive (i) his Base Salary amount through the end of the Term; and (ii) his Annual Bonus amount for each year during the remainder of the Term. If there has been a “Change in Control” and the Company (or its successor or the surviving entity) terminates Mr. Hegyi’s employment without Cause as part of or in connection with such Change in Control (including any such termination occurring within one (1) month prior to the effective date of such Change in Control), then in addition to the benefits set forth above, Mr. Hegyi will be entitled to (i) an increase of $300,000 in his annual base salary amount (or an additional $25,000 per month) through the end of the Term; plus (ii) a gross-up in the annual base salary amount each year to account for and to offset any tax that may be due by Mr. Hegyi on any payments received or to be received by Mr. Hegyi under this Agreement that would result in a “parachute payment” as described in Section 280G of the Internal Revenue Code of 1986, as amended. If the Company (or its successor or the surviving entity) terminates Mr. Hegyi’s employment without Cause within twelve (12) months after the effective date of any Change in Control, or if Mr. Hegyi terminates his employment for Good Reason within twelve (12) months after the effective date of any Change in Control, then in addition to the benefits set forth above, Mr. Hegyi will be entitled to (i) an increase of $300,000 in his annual base salary amount (or an additional $25,000 per month), which increased annual base salary amount shall be paid for the remainder of the Term or for two (2) years following the Change in Control, whichever is longer; (ii) a gross-up in the annual base salary amount each year to account for and to offset any tax that may be due by Mr. Hegyi on any payments received or to be received by Mr. Hegyi under this Letter Agreement that would result in a “parachute payment” as described in Section 280G of the Internal Revenue Code of 1986, as amended; (iii) payment of Mr. Hegyi’s annual bonus amount as set forth above for each year during the remainder of the Term or for two (2) years following the Change in Control, whichever is longer; and (iv) health insurance coverage provided for and paid by the Company for the remainder of the Term or for two (2) years following the Change in Control, whichever is longer. Consulting Chief Financial Officer Agreement with an Entity Controlled by Mark E. Scott On July 31, 2014, the Company entered into a Consulting Chief Financial Officer Letter with an entity controlled by Mark E. Scott pursuant to which the Company engaged Mr. Scott as its Consulting CFO from July 1, 2014 through September 30, 2014, and continuing thereafter until either party provides sixty day notice to terminate the Letter or Mr. Scott enters into a full-time employment agreement. Per the terms of the Scott Agreement, Mr. Scott’s compensation is $150,000 on an annual basis for the first year of the Scott Agreement. Mr. Scott is also entitled to receive an annual bonus equal to two percent of the Company’s EBITDA for that year. The Company’s Board of Directors granted Mr. Scott an option to purchase sixteen million shares of the Company’s Common Stock under the Company’s 2011 Stock Incentive Plan at an exercise price of $0.07 per share, the fair market price on July 31, 2014. On December 18, 2015, the Company reduced the exercise price to $0.01 per share. The shares vest as follows: i Two million shares vest immediately upon securing a market maker with an approved 15c2-11 resulting in the Company’s relisting on OTCBB (earned as of February 18, 2016); ii Two million shares vest immediately upon the successful approval and effectiveness of the Company’s S-1 (not earned as of December 31, 2016); iii Two million shares vest immediately upon the Company’s resolution of the class action lawsuits (earned as of August 17, 2015); and, iv Ten million shares will vest on a monthly basis over a period of three years beginning on the July 1, 2014. On October 21, 2016, Mr. Scott cancelled stock option grants totaling 12,000,000 shares of the Company’s common stock at $0.01 per share. Mr. Scott has an additional 2,000,000 share stock option grant which continues to vest monthly over 36 months and a 2,000,000 share stock option grant which vests upon the achievement of certain performance goals related to acquisitions. All options will have a five-year life and allow for a cashless exercise. The stock option grant is subject to the terms and conditions of the Company’s Stock Incentive Plan, including vesting requirements. In the event that Mr. Scott’s continuous status as consultant to the Company is terminated by the Company without Cause or Mr. Scott terminates his employment with the Company for Good Reason as defined in the Scott Agreement, in either case upon or within twelve months after a Change in Control as defined in the Company’s Stock Incentive Plan except for CANX USA, LLC, then 100% of the total number of shares shall immediately become vested. Mr. Scott will be entitled to participate in all group employment benefits that are offered by the Company to the Company’s senior executives and management employees from time to time, subject to the terms and conditions of such benefit plans, including any eligibility requirements. In addition, the Company is required to purchase and maintain an insurance policy on Mr. Scott’s life in the amount of $2,000,000 payable to Mr. Scott’s named heirs or estate as the beneficiary. Finally, Mr. Scott is entitled to twenty days of vacation annually and also has certain insurance and travel employment benefits. If, prior to the expiration of the Term, the Company terminates Mr. Scott’s employment for Cause, or if Mr. Scott voluntarily terminates his employment without Good Reason, or if Mr. Scott’s employment is terminated by reason of his death, then all of the Company’s obligations hereunder shall cease immediately, and Mr. Scott will not be entitled to any further compensation beyond any pro-rated base salary due and bonus amounts earned through the effective date of termination. Mr. Scott will also be reimbursed for any expenses incurred prior to the date of termination for which he was not previously reimbursed. Mr. Scott may receive severance benefits and the Company’s obligation under a termination by the Company without Cause or Mr. Scott terminates his employment for Good Reason are discussed above. Promotion Letter with Joseph Barnes On October 10, 2014, the Company entered into a Promotion Letter with Joseph Barnes which was effective October 1, 2014 pursuant to which we engaged Mr. Barnes as its Senior Vice-President of Business Development from October 1, 2014 on an at will basis. This Promotion Letter supersedes and canceled the Manager Services Agreement with Mr. Barnes dated August 1, 2013. Per the terms of the Barnes Agreement, Mr. Barnes’s compensation is $90,000 on an annual basis. On January 1, 2016, Mr. Barnes salary was increased to $120,000 per year. Mr. Barnes received a bonus of $6,500 and is also entitled to receive a quarterly bonus based on growth of our growth margin dollars. No quarterly bonuses were earned under this Promotion Letter. Mr. Barnes was granted an option to purchase eight million shares of our common stock under our 2011 Stock Incentive Plan at $0.050 per share. The shares vest as follows: i Two million shares vested immediately; iv Six million shares vest on a monthly basis over a period of three years beginning on the date of grant. On October 12, 2016, the Company amended the exercise price of the stock option grants for Mr. Barnes to $0.010 per share. All options will have a five-year life and allow for a cashless exercise. The stock option grant is subject to the terms and conditions of our Stock Incentive Plan, including vesting requirements. In the event that Mr. Barnes’s continuous status as employee to us is terminated by us without Cause or Mr. Barnes terminates his employment with us for Good Reason as defined in the Barnes Agreement, in either case upon or within twelve months after a Change in Control as defined in our Stock Incentive, then 100% of the total number of shares shall immediately become vested. Mr. Barnes was entitled to participate in all group employment benefits that are offered by the Company to our senior executives and management employees from time to time, subject to the terms and conditions of such benefit plans, including any eligibility requirements. Finally, Mr. Barnes is entitled to fifteen days of vacation annually and has certain insurance and travel employment benefits. Mr. Barnes may receive severance benefits and our obligation under a termination by the Company without Cause or Mr. Barnes terminates his employment for Good Reason are discussed above. Investment Banking Letter with D. Weckstein and Co. Inc. On August 27, 2014, the Company issued 5,000,000 shares of its common stock to D. Weckstein and Co., Inc. pursuant to an Investment Banking Letter. The shares were valued at the fair market price of $0.08 per share. Consulting Agreement with an Entity Controlled by Michael E. Fasci On October 21, 2016, the Company entered into a Consulting Agreement with an entity controlled by Michael E. Fasci. Mr. Fasci agreed to provide services related to lender management, financing and acquisitions. Mr. Fasci’s compensation is 2,000,000 shares of our common stock valued at $0.01 per share and to be issued on April 21, 2017 and October 21, 2017.

12. INCOME TAXES

12. INCOME TAXES	12 Months Ended
	Dec. 31, 2016
Income Tax Disclosure [Abstract]
INCOME TAXES	The Company has incurred losses since inception, which have generated net operating loss carryforwards. The net operating loss carryforwards arise from United States sources. Pretax losses arising from United States operations were approximately $6,500,000 and $5,800,000 and for the years ended December 31, 2016 and 2015, respectively. The Company has net operating loss carryforwards of approximately $16,000,000, which expire in 2022-2032. Because it is not more likely than not that sufficient tax earnings will be generated to utilize the net operating loss carryforwards, a corresponding valuation allowance of approximately $6,600,000 was established as of December 31, 2016. Additionally, under the Tax Reform Act of 1986, the amounts of, and benefits from, net operating losses may be limited in certain circumstances, including a change in control. Section 382 of the Internal Revenue Code generally imposes an annual limitation on the amount of net operating loss carryforwards that may be used to offset taxable income when a corporation has undergone significant changes in its stock ownership. There can be no assurance that the Company will be able to utilize any net operating loss carryforwards in the future. For the year ended December 31, 2016, the Company’s effective tax rate differs from the federal statutory rate principally due to net operating losses, warrants issued for services, change in fair value of derivative and debt discount. The principal components of the Company’s deferred tax assets at December 31, 2016 and 2015 are as follows: 2016 2015 2014 2013 U.S. operations loss carry forward and state at statutory rate of 40% $ 6,584,821 $ 5,852,421 $ 5,038,976 $ 3,612,736 Less valuation allowance (6,584,821 ) (5,852,421 ) (5,038,976 ) (3,612,736 ) Net deferred tax assets - - - - Change in valuation allowance $ (6,584,821 ) $ (5,852,421 ) $ (5,038,976 ) $ (3,612,736 ) A reconciliation of the United States Federal Statutory rate to the Company’s effective tax rate for the years ended December 31, 2016 and 2015is as follows: 2016 2015 2014 2013 Federal statutory rate -34.0 % -34.0 % -34.0 % -34.0 % State income tax rate -6.0 % -6.0 % -6.0 % -6.0 % Change in valuation allowance 40.0 % 40.0 % 40.0 % 40.0 % Effective tax rate 0.0 % 0.0 % 0.0 % 0.0 % The Company’s tax returns for 2011 to 2015 are open to review by the Internal Revenue Service.

13. SUBSEQUENT EVENTS

13. SUBSEQUENT EVENTS	12 Months Ended
	Dec. 31, 2016
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	The Company evaluates subsequent events, for the purpose of adjustment or disclosure, up through the date the financial statements are available. Subsequent to December 31, 2016, the following material transactions occurred: Equity Issuances On January 2, 2017, Brighton Capital LLC converted debt of $127,148 into 15,893,500 shares of our common stock at a per share conversion price of $0.008. During the three months ended March 31, 2017, Chicago Venture converted principal and interest of $1,253,000 into 190,189,197 shares of our common stock at a per share conversion price of $0.007. On February 28, 2017, Logic Works converted principal and interest of $291,044 into 82,640,392 shares of our common stock at a per share conversion price of $.004. Transactions with Chicago Venture Partners, L.P. (‘Chicago Venture”) and TCA Global Credit Master Fund, LP (“TCA”) On February 1, 2017, the Company closed the transactions described below with Chicago Venture Partners, L.P. (“Chicago Venture”). Securities Purchase Agreement, Secured Promissory Notes, Membership Interest Pledge Agreement and Security Agreement On January 9, 2017, the Company executed the following agreements with Chicago Venture: (i) Securities Purchase Agreement; (ii) Secured Promissory Notes; (iii) Membership Interest Pledge Agreement; and (iv) Security Agreement (collectively the “Chicago Venture Agreements”). The Company entered into the Chicago Venture Agreements with the intent of paying its debt, in full, to TCA Global Credit Master Fund, LP (“TCA”), which included any TCA affiliates. The total amount of funding under the Chicago Venture Agreements is $1,105,000.00 (the “Debt”). Each Convertible Promissory Note carries an original issue discount of $100,000 and a transaction expense amount of $5,000, for total debt of $1,105,000. The Company agreed to reserve 500,000,000 of its shares of common stock for issuance upon conversion of the Debt, if that occurs in the future. If not converted sooner, the Debt is due on or before January 9, 2018. The Debt carries an interest rate of ten percent (10%). The Debt is convertible, at Chicago Venture’s option, into the Company’s common stock at $0.009 per share subject to adjustment as provided for in the Secured Promissory Notes attached hereto and incorporated herein by this reference. As of the date of this report on Form 8-K, Chicago Venture has funded the entire amount of the Debt. Chicago Venture’s obligation to fund the Debt was secured by Chicago Venture’s 60% interest in Typenex Medical, LLC, an Illinois corporation, as provided for in the Membership Pledge Agreement attached hereto and incorporated herein by this reference. The Company’s obligation to pay the Debt, or any portion thereof, is secured by all of the Company’s assets as described in Schedule A to the Security Agreement attached hereto and incorporated herein by this reference. Payment of All TCA Obligations On January 10, 2017, Chicago Venture, at the Company’s instruction, remitted funds of $1,495,901 to TCA in order to satisfy all debts to TCA. On or around January 11, 2017, the Company was notified by TCA that $13,540 were due to TCA in order for TCA to release its security interest in the Company’s assets. On February 1, 2017, TCA notified the Company that all funds were received and TCA would release its security interest in Company’s assets. TCA has confirmed that it is paid in full and the Company is not aware of any other obligations that the Company has as to TCA. The funds received under the Chicago Venture Agreements and previous Chicago Venture Agreements were used to pay-off TCA. Director Appointments On February 14, 2017, the board appointed Katherine McClain and Mark E. Scott, our consulting Chief Financial Officer, to the Board of Directors. I mpairment of Goodwill and Intangible Assets On March 10, 2017, the Audit Committee reviewed the GrowLife Hydroponics, Inc. operations and based on the capital intensive nature of the business and operating results, determined that the goodwill value of $739,000 and intangible assets of $137,056 were impaired as of December 31, 2016. The Company recorded an impairment of goodwill and intangible assets associated with GrowLife Hydroponics, Inc. of $876,056 during the three months December 31, 2016. Dissolution of Certain Non-Operating Subsidiaries The Company determined that certain wholly-owned subsidiaries were unnecessary for the ongoing operations of the Company’s business and elected to dissolve these entities and/or surrender their foreign status in certain jurisdictions for the purpose of reducing unnecessary compliance costs. The Company is dissolving SG Technologies Corp., a Nevada corporation, and is surrendering its qualification to do business in California due to the fact that the Company no longer operates any business under this wholly-owned subsidiary. The Company is dissolving Phototron, Inc. and GrowLife Productions, Inc., all California corporations, due to the fact that the Company no longer operates any business under these wholly-owned subsidiaries. The Company is dissolving Business Bloom, Inc., a California corporation, and is withdrawing its foreign entity status in Colorado due to the fact that the Company no longer operates any business under this wholly-owned subsidiary. The Company is surrendering its qualification to do business in California for GrowLife Productions, Inc. due to the fact that the Company no longer operates any business under this wholly-owned subsidiary. Potential Convertible Note Defaults Several of the Company’s convertible promissory notes remain outstanding beyond their respective maturity dates. This may trigger an event of default under the respective agreements. The Company is working with these noteholders to convert their notes into common stock and intends to resolve these outstanding issues as soon as practicable.

3. SIGNIFICANT ACCOUNTING POL20

3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS (Policies)	12 Months Ended
	Dec. 31, 2016
Accounting Policies [Abstract]
Basis of Presentation	The accompanying unaudited consolidated financial statements include the accounts of the Company. Intercompany accounts and transactions have been eliminated. The preparation of these unaudited consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”).
Principles of Consolidation	The consolidated financial statements include the accounts of the Company and its wholly owned and majority-owned subsidiaries. Inter-Company items and transactions have been eliminated in consolidation.
Cash and Cash Equivalents	The Company classifies highly liquid temporary investments with an original maturity of three months or less when purchased as cash equivalents. The Company maintains cash balances at various financial institutions. Balances at US banks are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risk for cash on deposit.
Accounts Receivable and Revenue	Revenue is recognized on the sale of a product when the product is shipped, which is when the risk of loss transfers to our customers, the fee is fixed and determinable, and collection of the sale is reasonably assured. A product is not shipped without an order from the customer and the completion of credit acceptance procedures. The majority of our sales are cash or credit card; however, we occasionally extend terms to our customers. Accounts receivable are reviewed periodically for collectability.
Inventories	Inventories are recorded on a first in first out basis. Inventory consists of raw materials, purchased finished goods and components held for resale. Inventory is valued at the lower of cost or market. The reserve for inventory was $20,000 as of December 31, 2016 and 2015, respectively.
Property and Equipment	Property and equipment are stated at cost. Assets acquired under capital leases are initially recorded at the lower of the present value of the minimum lease payments discounted at the implicit interest rate or the fair value of the asset. Major improvements and betterments are capitalized. Maintenance and repairs are expensed as incurred. Depreciation is computed using the straight-line method over an estimated useful life of five years. Assets acquired under capital lease are depreciated over the lesser of the useful life or the lease term. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the consolidated statements of operations.
Goodwill and Intangible Assets	The Company evaluates the carrying value of goodwill, intangible assets, and long-lived assets during the fourth quarter of each year and between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. Such circumstances could include, but are not limited to (1) a significant adverse change in legal factors or in business climate, (2) unanticipated competition, (3) an adverse action or assessment by a regulator, (4) continued losses from operations, (5) continued negative cash flows from operations, and (6) the suspension of trading of the Company’s securities. When evaluating whether goodwill is impaired, the Company compares the fair value of the reporting unit to which the goodwill is assigned to the reporting unit’s carrying amount, including goodwill. The fair value of the reporting unit is estimated using a combination of the income, or discounted cash flows, approach and the market approach, which utilizes comparable companies’ data. If the carrying amount of a reporting unit exceeds its fair value, then the amount of the impairment loss must be measured. The impairment loss would be calculated by comparing the implied fair value of reporting unit goodwill to its carrying amount. In calculating the implied fair value of reporting unit goodwill, the fair value of the reporting unit is allocated to all of the other assets and liabilities of that unit based on their fair values. The excess of the fair value of a reporting unit over the amount assigned to its other assets and liabilities is the implied fair value of goodwill. The Company amortizes the cost of other intangible assets over their estimated useful lives, which range up to ten years, unless such lives are deemed indefinite. Intangible assets with indefinite lives are tested in the fourth quarter of each fiscal year for impairment, or more often if indicators warrant. On March 10, 2017, the Audit Committee reviewed the GrowLife Hydroponics, Inc. operations and based on the capital intensive nature of the business and operating results determined that the goodwill value of $739,000 and intangible assets of $137,056 were impaired as of December 31, 2016. The Company recorded an impairment of goodwill and intangible assets associated with GrowLife Hydroponics, Inc. of $876,056 as general and administrative expenses during the three months ended December 31, 2016.
Long Lived Assets	The Company reviews its long-lived assets for impairment annually or when changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Long-lived assets under certain circumstances are reported at the lower of carrying amount or fair value. Assets to be disposed of and assets not expected to provide any future service potential to the Company are recorded at the lower of carrying amount or fair value (less the projected cost associated with selling the asset). To the extent carrying values exceed fair values, an impairment loss is recognized in operating results.
Fair Value Measurements and Financial Instruments	ASC Topic 820 defines fair value, establishes a framework for measuring fair value, establishes a three-level valuation hierarchy for disclosure of fair value measurement and enhances disclosure requirements for fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows: Level 1 - Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 - Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The carrying value of cash, accounts receivable, investment in a related party, accounts payables, accrued expenses, due to related party, notes payable, and convertible notes approximates their fair values due to their short-term maturities.
Derivative Financial Instruments	The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. For stock-based derivative financial instruments, the Company uses a weighted average Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within twelve months of the balance sheet date.
Sales Returns	We allow customers to return defective products when they meet certain established criteria as outlined in our sales terms and conditions. It is our practice to regularly review and revise, when deemed necessary, our estimates of sales returns, which are based primarily on actual historical return rates. We record estimated sales returns as reductions to sales, cost of goods sold, and accounts receivable and an increase to inventory. Returned products which are recorded as inventory are valued based upon the amount we expect to realize upon its subsequent disposition. As of December 31, 2016 and December 31, 2015, there was no reserve for sales returns, which are minimal based upon our historical experience.
Stock Based Compensation	The Company has share-based compensation plans under which employees, consultants, suppliers and directors may be granted restricted stock, as well as options and warrants to purchase shares of Company common stock at the fair market value at the time of grant. Stock-based compensation cost to employees is measured by the Company at the grant date, based on the fair value of the award, over the requisite service period under ASC 718. For options issued to employees, the Company recognizes stock compensation costs utilizing the fair value methodology over the related period of benefit. Grants of stock to non-employees and other parties are accounted for in accordance with the ASC 505.
Net (Loss) Per Share	Under the provisions of ASC 260, “Earnings per Share,” basic loss per common share is computed by dividing net loss available to common shareholders by the weighted average number of shares of common stock outstanding for the periods presented. Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that would then share in the income of the Company, subject to anti-dilution limitations. The common stock equivalents have not been included as they are anti-dilutive. As of December 31, 2016, there are also (i) stock option grants outstanding for the purchase of 12,010,000 common shares at a $0.010 average strike price; (ii) warrants for the purchase of 595 million common shares at a $0.031 average exercise price; and (iii) 207,812,222 shares related to convertible debt that can be converted at $0.0036 per share. In addition, we have an unknown number of common shares to be issued under the TCA Global Credit Master Fund LP and Chicago Venture Partners, L.P. financing agreements. As of December 31, 2015, there are also (i) stock option grants outstanding for the purchase of 29.0 million common shares at a $0.028 average strike price; (ii) warrants for the purchase of 565.0 million common shares at a $0.032 average exercise price; (iii) 243.6 million shares related to convertible debt that can be converted at $0.007 per share; and (iv) 6.0 million shares that may be issued to a former executive related to a severance agreement. We issued $2 million in common stock or 115,141,048 shares of our common stock pursuant to the settlement of the Consolidated Class Action and Derivative Action lawsuits alleging violations of federal securities laws that were filed against the Company in United States District Court, Central District of California.
Dividend Policy	The Company has never paid any cash dividends and intends, for the foreseeable future, to retain any future earnings for the development of our business. Our future dividend policy will be determined by the board of directors on the basis of various factors, including our results of operations, financial condition, capital requirements and investment opportunities.
Use of Estimates	In preparing these unaudited interim consolidated financial statements in conformity with GAAP, management is required to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions included in our consolidated financial statements relate to the valuation of long-lived assets, estimates of sales returns, inventory reserves and accruals for potential liabilities, and valuation assumptions related to derivative liability, equity instruments and share based compensation.
Recent Accounting Pronouncements	A variety of proposed or otherwise potential accounting standards are currently under study by standard setting organizations and various regulatory agencies. Due to the tentative and preliminary nature of those proposed standards, management has not determined whether implementation of such proposed standards would be material to the Company’s consolidated financial statements. In May 2014, as part of its ongoing efforts to assist in the convergence of GAAP and International Financial Reporting Standards, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, which is a new standard related to revenue recognition. Under the new standard, recognition of revenue occurs when a customer obtains control of promised services or goods in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts. The standard must be adopted using either a full retrospective approach for all periods presented in the period of adoption or a modified retrospective approach. In July 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers - Deferral of the Effective Date, which defers the implementation of this new standard to be effective for fiscal years beginning after December 15, 2017. Early adoption is permitted effective January 1, 2017. In March 2016, the FASB issued ASU 2016-08, Principal versus Agent Considerations, which clarifies the implementation guidance on principal versus agent considerations in the new revenue recognition standard pursuant to ASU 2014-09. In April 2016, the FASB issued ASU 2016-10, Identifying Performance Obligations and Licensing, and in May 2016, the FASB issued ASU 2016-12, Narrow-Scope Improvements and Practical Expedients, which amend certain aspects of the new revenue recognition standard pursuant to ASU 2014-09. The Company currently evaluating which transition approach we will utilize and the impact of adopting this accounting standard on the Company’s financial statements. In August 2014, the FASB issued ASU 2014-15, Disclosures of Uncertainties About an Entity’s Ability to Continue as a Going Concern. The new standard provides guidance around management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company does not expect that this guidance will have a material impact on its financial position, results of operations or cash flows. In January 2015, the FASB issued ASU 2015-01, Income Statement—Extraordinary and Unusual Items. The objective of this Update is to simplify the income statement presentation requirements in Subtopic 225-20 by eliminating the concept of extraordinary items. Extraordinary items are events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence. Eliminating the extraordinary classification simplifies income statement presentation by altogether removing the concept of extraordinary items from consideration. This Accounting Standards Update is the final version of Proposed Accounting Standards Update 2014-220—Income Statement—Extraordinary Items (Subtopic 225-20), which has been deleted. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. the Company’s does not expect this update to have a material impact on financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”). The standard amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 will be effective beginning in the first quarter of 2019. Early adoption of ASU 2016-02 is permitted. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is currently evaluating the impact of adopting ASU 2016-02 on the Company’s financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. This ASU makes targeted amendments to the accounting for employee share-based payments. This guidance is to be applied using various transition methods such as full retrospective, modified retrospective, and prospective based on the criteria for the specific amendments as outlined in the guidance. The guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2016. Early adoption is permitted, as long as all of the amendments are adopted in the same period. The Company is currently evaluating the impact of adopting ASU 2016-09 on the Company’s financial statements. In June 2016, the FASB issued Accounting Standards Update ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The standard significantly changes how entities will measure credit losses for most financial assets and certain other instruments that aren’t measured at fair value through net income. The standard will replace today’s “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. For available-for-sale debt securities, entities will be required to record allowances rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. This ASU is effective for annual periods beginning after December 15, 2019, and interim periods therein. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods therein. This ASU is not expected to have a material impact on the Company’s financial statements. In August 2016, the FASB issued Accounting Standards Update ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. Stakeholders indicated that there is diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows, and other Topics. This Accounting Standards Update addresses the following eight specific cash flow issues: Debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (COLIs) (including bank-owned life insurance policies (BOLIs)); distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. The amendments in this Update apply to all entities, including both business entities and not-for-profit entities that are required to present a statement of cash flows under Topic 230.This Update is the final version of Proposed Accounting Standards Update EITF-15F—Statement of Cash Flows—Classification of Certain Cash Receipts and Cash Payments (Topic 230), which has been deleted. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted as all of the amendments are adopted in the same period. This ASU is not expected to have a material impact on the Company’s financial statements.

5. INVENTORY (Tables)

5. INVENTORY (Tables)	12 Months Ended
	Dec. 31, 2016
Inventory Disclosure [Abstract]
Schedule of Inventory	December 31, 2016 2015 Finished goods $ 438,453 $ 418,439 Inventory reserve (20,000 ) (20,000 ) Total $ 418,453 $ 398,439

6. CONVERTIBLE NOTES PAYABLE,22

6. CONVERTIBLE NOTES PAYABLE, NET (Tables)	12 Months Ended
	Dec. 31, 2016
Notes to Financial Statements
Convertible notes summarized	Convertible notes payable as of December 31, 2016 consisted of the following: Balance Accrued Debt As of Principal Interest Discount December 31, 2016 6% Secured convertible note (2014) $ 330,295 $ 3,692 $ - $ 333,987 7% Convertible note ($850,000) 250,000 164,137 - 414,137 Replacement debenture with TCA ($2,830,210) 1,468,009 18,350 - 1,486,359 10% OID Convertible Promissory Note with Chicago Venture Partners, L.P. 683,042 2,670 (121,395 ) 564,317 $ 2,731,346 $ 188,849 $ (121,395 ) $ 2,798,800 Convertible notes payable as of December 31, 2015 consisted of the following: Balance Accrued Debt As of Principal Interest Discount December 31, 2015 6% Senior secured convertible notes (2012) $ 413,680 $ 172,494 $ - $ 586,174 6% Secured convertible note (2014) 350,000 30,641 (83,924 ) 296,717 7% Convertible note ($850,000) 250,000 104,137 - 354,137 7% Convertible note ($1,000,000) 250,000 134,469 - 384,469 18% Senior secured redeemable convertible debenture ($1,150,000) 1,150,000 68,510 (552,139 ) 666,371 $ 2,413,680 $ 510,251 $ (636,063 ) $ 2,287,868

7. DERIVATIVE LIABILITY (Tables

7. DERIVATIVE LIABILITY (Tables)	12 Months Ended
	Dec. 31, 2016
Notes to Financial Statements
Fair Value of Derivative Liability	Derivative liability as of December 31, 2016 is as follows: Carrying Fair Value Measurements Using Inputs Amount at Financial Instruments Level 1 Level 2 Level 3 December 31, 2016 Liabilities: Derivative Instruments $ - $ 2,701,559 $ - $ 2,701,559 Total $ - $ 2,701,559 $ - $ 2,701,559 Derivative liability as of December 31, 2015 is as follows: Carrying Fair Value Measurements Using Inputs Amount at Financial Instruments Level 1 Level 2 Level 3 December 31, 2015 Liabilities: Derivative Instruments $ - $ 1,377,175 $ - $ 1,377,175 Total $ - $ 1,377,175 $ - $ 1,377,175

9. EQUITY (Tables)

9. EQUITY (Tables)	12 Months Ended
	Dec. 31, 2016
Equity [Abstract]
Shares for services	December 31, 2016 Weighted Average Exercise Shares Price Outstanding at beginning of period 565,000,000 $ 0.032 Issued 30,000,000 0.010 Exercised - - Forfeited - - Expired - - Outstanding at end of period 595,000,000 $ 0.031 Exerciseable at end of period 595,000,000
Warrants	December 31, 2016 Weighted Weighted Weighted Average Average Average Number of Remaining Exercise Shares Exercise Warrants Life Price Exerciseable Price 540,000,000 2.31 $ 0.033 540,000,000 $ 0.033 55,000,000 3.54 0.010 35,000,000 0.010 595,000,000 2.34 $ 0.031 575,000,000 $ 0.032

10. STOCK OPTIONS (Tables)

10. STOCK OPTIONS (Tables)	12 Months Ended
	Dec. 31, 2016
Stock Options Tables
Stock options	Weighted Average Options Exercise Price $ Outstanding as of December 31, 2014 40,720,000 $ 0.058 $ 2,356,000 Granted - - (960,000 ) Exercised - - - Forfeitures (11,700,000 ) (0.050 ) (585,000 ) Outstanding as of December 31, 2015 29,020,000 0.028 811,000 Granted - - - Exercised - - - Forfeitures (17,010,000 ) (0.041 ) (690,500 ) Outstanding as of December 31, 2016 12,010,000 $ 0.010 $ 120,500 Weighted Weighted Weighted Average Average Average Range of Number Remaining Life Exercise Price Number Exercise Price Exercise Prices Outstanding In Years Exerciseable Exerciseable Exerciseable $ 0.05 10,000 3.11 $ 0.050 6,667 $ 0.050 0.01 12,000,000 2.88 0.010 8,277,778 0.010 12,010,000 2.88 $ 0.010 8,284,444 $ 4 0.010

11. COMMITMENTS, CONTINGENCIE26

11. COMMITMENTS, CONTINGENCIES AND LEGAL PROCEEDINGS (Tables)	12 Months Ended
	Dec. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
Schedule of Future minimum rental payments	Years Ended December 31, Total 2017 $ 115,205 2018 15,579 2019 0 2020 0 2021 - Beyond - Total $ 130,784

12. INCOME TAXES (Tables)

12. INCOME TAXES (Tables)	12 Months Ended
	Dec. 31, 2016
Income Tax Disclosure [Abstract]
Deferred tax assets	2016 2015 2014 2013 U.S. operations loss carry forward and state at statutory rate of 40% $ 6,584,821 $ 5,852,421 $ 5,038,976 $ 3,612,736 Less valuation allowance (6,584,821 ) (5,852,421 ) (5,038,976 ) (3,612,736 ) Net deferred tax assets - - - - Change in valuation allowance $ (6,584,821 ) $ (5,852,421 ) $ (5,038,976 ) $ (3,612,736 )
Income tax reconciliation	2016 2015 2014 2013 Federal statutory rate -34.0 % -34.0 % -34.0 % -34.0 % State income tax rate -6.0 % -6.0 % -6.0 % -6.0 % Change in valuation allowance 40.0 % 40.0 % 40.0 % 40.0 % Effective tax rate 0.0 % 0.0 % 0.0 % 0.0 %

3. SIGNIFICANT ACCOUNTING POL28

3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2016
Accumulated deficit	$ (116,715,648)	$ (124,410,332)
Shipping and handling revenue	95,455
Advertising costs	637
Inventory reserve	$ 20,000	$ 20,000

5. INVENTORY (Details)

5. INVENTORY (Details) - USD ($)	Dec. 31, 2016	Dec. 31, 2015
Notes to Financial Statements
Finished goods	$ 438,453	$ 418,439
Inventory reserve	(20,000)	(20,000)
Total inventory	$ 418,453	$ 398,439

6. CONVERTIBLE NOTES PAYABLE,30

6. CONVERTIBLE NOTES PAYABLE, NET (Details) - USD ($)	Dec. 31, 2016	Dec. 31, 2015
Long-term convertible notes payable	$ 0	$ 0
6% Secured convertible note (2014)
Principal amount due	330,295	350,000
Accrued Interest	3,692	30,641
Debt discount	0	(83,924)
Long-term convertible notes payable	333,987	296,717
7% Convertible Notes (850,000)
Principal amount due	250,000	250,000
Accrued Interest	164,137	104,137
Debt discount	0	0
Long-term convertible notes payable	414,137	354,137
Replacement debenture with TCA ($2,830,210)
Principal amount due	1,468,009
Accrued Interest	18,350
Debt discount	0
Long-term convertible notes payable	1,486,359
10% OID Convertible Promissory Note with Chicago Venture Partners, L.P.
Principal amount due	683,042
Accrued Interest	2,670
Debt discount	(121,395)
Long-term convertible notes payable	564,317
Total Long term convertible Debt Member
Principal amount due	2,731,346	2,413,680
Accrued Interest	188,849	510,251
Debt discount	(121,395)	(636,063)
Long-term convertible notes payable	$ 2,798,800	2,287,868
6% Senior Secured Convertible Notes
Principal amount due		413,680
Accrued Interest		172,494
Debt discount		0
Long-term convertible notes payable		586,174
7% Convertible Notes (1,000,000)
Principal amount due		250,000
Accrued Interest		134,469
Debt discount		0
Long-term convertible notes payable		384,469
18% Senior secured redeemable convertible debenture ($1,050,000)
Principal amount due		1,150,000
Accrued Interest		68,510
Debt discount		(552,139)
Long-term convertible notes payable		$ 666,371

7. DERIVATIVE LIABILITY (Detail

7. DERIVATIVE LIABILITY (Details) - USD ($)	Dec. 31, 2016	Dec. 31, 2015
Derivative Instruments - Warrants	$ 2,701,559	$ 1,377,175
Derivative liability	2,701,559	1,377,175
Level 1
Derivative Instruments - Warrants	0	0
Derivative liability	0	0
Level 2
Derivative Instruments - Warrants	2,701,559	1,377,175
Derivative liability	2,701,559	1,377,175
Level 3
Derivative Instruments - Warrants	0	0
Derivative liability	$ 0	$ 0

9. EQUITY (Details)

9. EQUITY (Details) - Warrant [Member]	12 Months Ended
	Dec. 31, 2016$ / sharesshares
Shares
Outstanding-beginning of year (in shares)	565,000,000
Issued	30,000,000
Exercised	0
Forfeited	0
Expired	0
Outstanding at end of year	595,000,000
Exerciseable at end of year	595,000,000
Weighted Average Exercise Price
Outstanding-beginning | $ / shares	$ 0.032
Issued | $ / shares	0.010
Exercised | $ / shares	0
Forfeited | $ / shares	0
Expired | $ / shares	0
Outstanding at end of year | $ / shares	$ 0.031

9. EQUITY - Price Range (Detail

9. EQUITY - Price Range (Details)	12 Months Ended
	Dec. 31, 2016$ / sharesshares
Price range 1
Outstanding at end of year | shares	540,000,000
Weighted average remaining life	2 years 3 months 22 days
Outstanding at end of year	$ 0.033
Exerciseable at end of year | shares	540,000,000
Weighted average exercise price exercisable	$ 0.033
Price range 2
Weighted average remaining life	3 years 6 months 14 days
Outstanding at end of year	$ 0.01
Exerciseable at end of year | shares	35,000,000
Weighted average exercise price exercisable	$ 0.01
Warrant [Member]
Outstanding at end of year | shares	595,000,000
Weighted average remaining life	2 years 4 months 2 days
Outstanding at end of year	$ 0.031
Exerciseable at end of year | shares	595,000,000
Weighted average exercise price exercisable	$ 0.032

10. STOCK OPTIONS (Details)

10. STOCK OPTIONS (Details) - Options - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Shares
Outstanding-beginning of year (in shares)	29,020,000	40,720,000
Granted	0	0
Exercised	0	0
Forfeitures	(17,010,000)	(11,700,000)
Outstanding-end of year (in shares)	12,010,000	29,020,000
Weighted Average Exercise Price
Outstanding-beginning	$ 0.028	$ 0.058
Granted	0	0
Exercised	0	0
Forfeitures	(0.041)	(0.050)
Outstanding at end of year	$ 0.010	$ 0.028
Aggregate Intrinsic Value
Outstanding-beginning of year (in dollars)	$ 811,000	$ 2,356,000
Granted	0	(960,000)
Exercised	0	0
Forfeitures	(690,500)	(585,000)
Outstanding-end of year (in dollars)	$ 120,500	$ 811,000

10. STOCK OPTIONS - Price range

10. STOCK OPTIONS - Price range (Details)	12 Months Ended
	Dec. 31, 2016$ / sharesshares
Price 0.05
Outstanding-end of year (in shares) | shares	10,000
Weighted average remaining life in years	3 years 1 month 10 days
Outstanding at end of year | $ / shares	$ 0.050
Exerciseable at end of year | shares	6,667
Weighted average exercise price exercisable | $ / shares	$ 0.050
Price 0.01
Outstanding-end of year (in shares) | shares	12,000,000
Weighted average remaining life in years	2 years 10 months 17 days
Outstanding at end of year | $ / shares	$ 0.010
Exerciseable at end of year | shares	8,277,778
Weighted average exercise price exercisable | $ / shares	$ 0.010
Options
Outstanding-end of year (in shares) | shares	12,010,000
Weighted average remaining life in years	2 years 10 months 17 days
Outstanding at end of year | $ / shares	$ 0.010
Exerciseable at end of year | shares	8,284,444
Weighted average exercise price exercisable | $ / shares	$ 0.010

11. COMMITMENTS, CONTINGENCIE36

11. COMMITMENTS, CONTINGENCIES AND LEGAL PROCEEDINGS (Details)	Dec. 31, 2016USD ($)
Commitments And Contingencies Details
2,017	$ 115,205
2,018	15,579
2,019	0
2,020	0
2,021
Beyond
Total	$ 130,784

12. INCOME TAXES - Deferred tax

12. INCOME TAXES - Deferred tax asset (Details) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Deferred tax assets:
U.S. operations loss carry forward and state at statutory rate of 40%	$ 6,584,821	$ 5,852,421	$ 5,038,976	$ 3,612,736
Less valuation allowance	(6,584,821)	(5,852,421)	(5,038,976)	(3,612,736)
Net deferred tax asset	0	0	0	0
Change in valuation allowance	$ (6,584,821)	$ (5,852,421)	$ (5,038,976)	$ (3,612,736)

12. INCOME TAX - Rate reconcili

12. INCOME TAX - Rate reconciliation (Details)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Income Tax Details
Federal statutory rate	(34.00%)	(34.00%)	(34.00%)	(34.00%)
State income tax rate	(6.00%)	(6.00%)	(6.00%)	(6.00%)
Change in valuation allowance	40.00%	40.00%	40.00%	40.00%
Total	0.00%	0.00%	0.00%	0.00%

12. INCOME TAXES (Details Narra

12. INCOME TAXES (Details Narrative)	12 Months Ended
	Dec. 31, 2016USD ($)
Income Taxes Details Narrative
Net operating loss carryforwards	$ 16,000,000
Net operating loss carryforwards expiration	2022 to 2032