GrowLife (PHOT) 10-K 28 Mar 18 2017 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2017	Mar. 28, 2018	Jun. 30, 2017
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, 2017
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			$ 14,662,328
Entity Common Stock, Shares Outstanding		2,913,559,657
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2,017

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	Dec. 31, 2017	Dec. 31, 2016
CURRENT ASSETS:
Cash and cash equivalents	$ 69,191	$ 103,070
Inventory, net	465,678	418,453
Deposits	24,308	11,163
Total Current Assets	559,177	532,686
EQUIPMENT, NET	302,689	1,890
TOTAL ASSETS	861,866	534,576
CURRENT LIABILITIES:
Accounts payable - trade	821,398	1,529,919
Accounts payable - related parties	0	10,952
Accrued expenses	133,988	132,656
Accrued expenses - related parties	37,776	19,605
Derivative liability	2,660,167	2,701,559
Current portion of convertible notes payable	3,015,021	2,798,800
Deferred revenue	10,000	47,995
Total current liabilities	6,678,350	7,241,486
COMMITMENTS AND CONTINGENCIES
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, no shares issued and outstanding, Series C Convertible Preferred stock - $0.0001 par value, 51 shares authorized, no shares and 51 shares issued and outstanding at 12/31/2017 and 12/31/2016, respectively	0	0
Common stock - $0.0001 par value, 6,000,000,000 shares authorized, 2,367,634,022 and 1,656,120,083 shares issued and outstanding at 12/31/2017 and 12/31/2016, respectively	236,752	165,600
Additional paid-in capital	123,678,069	117,537,822
Accumulated deficit	(129,731,305)	(124,410,332)
Total stockholders' deficit	(5,816,484)	(6,706,910)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	861,866	534,576
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, no shares issued and outstanding, Series C Convertible Preferred stock - $0.0001 par value, 51 shares authorized, no shares and 51 shares issued and outstanding at 12/31/2017 and 12/31/2016, respectively	0	0
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, no shares issued and outstanding, Series C Convertible Preferred stock - $0.0001 par value, 51 shares authorized, no shares and 51 shares issued and outstanding at 12/31/2017 and 12/31/2016, respectively	$ 0	$ 0

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2017	Dec. 31, 2016
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	6,000,000,000	6,000,000,000
Common Stock, Issued	2,367,634,022	1,656,120,083
Common Stock, Outstanding	2,367,634,022	1,656,120,083
Series B Preferred Stock
Preferred stock, par value	$ .0001	$ 0.0001
Preferred Stock, Authorized	150,000	150,000
Preferred Stock, Issued	0	0
Preferred stock, outstanding shares	0	0
Series C Preferred Stock
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred Stock, Authorized	51	51
Preferred Stock, Issued	0	51
Preferred stock, outstanding shares	0	51

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Income Statement [Abstract]
NET REVENUE	$ 2,452,104	$ 1,231,281
COST OF GOODS SOLD	2,180,603	1,275,580
GROSS PROFIT	271,501	(44,299)
GENERAL AND ADMINISTRATIVE EXPENSES	2,320,455	1,888,537
IMPAIRMENT OF LONG-LIVED ASSETS	0	876,056
OPERATING LOSS	(2,048,954)	(2,808,892)
OTHER INCOME (EXPENSE):
Change in fair value of derivative	496,306	(1,324,384)
Interest expense, net	(1,281,083)	(816,750)
Other income (expense)	15,577	144,882
Loss on debt conversions	(2,502,819)	(2,889,540)
Total other (expense)	(3,272,019)	(4,885,792)
(LOSS) BEFORE INCOME TAXES	(5,320,974)	(7,694,684)
Income taxes - current benefit	0	0
NET (LOSS)	$ (5,320,974)	$ (7,694,684)
Basic and diluted (loss) per share	$ 0	$ (0.01)
Weighted average shares of common stock outstanding- basic and diluted	2,044,521,389	1,197,565,907

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, 2015	$ 15	$ 0	$ 89,098	$ 0	$ 110,585,434	$ 116,715,648	$ (6,041,101)
Begining balance, shares at Dec. 31, 2015	150,000	51	891,116,496
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
Shares issued for debt conversion, amount			$ 6,487		542,052		548,539
Shares issued for debt conversion, shares			64,869,517
Shares issued for services rendered, amount			$ 1,000		75,000		76,000
Shares issued for services rendered, shares			10,000,000
Stock based compensation for stock options					29,251		29,251
Stock based compensation for warrants					187,292		187,292
Shares issued for convertible note and interest conversion, amount			$ 63,665		4,768,954		4,832,619
Shares issued for convertible note and interest conversion, shares			636,644,422
Cancellation of Series C Convertible Preferred Stock		(51)
Write-off of derivative liability to additional paid in capital					537,698		537,698
Series B Convertible Preferred Stock converted into convertible notes payable, amount							0
Shares issued for class action settlements, amount							0
Net loss						(5,320,974)	(5,320,974)
Ending balance at Dec. 31, 2017	$ 0	$ 0	$ 236,752	$ 0	$ 123,678,069	$ 129,731,306	$ (5,816,484)
Ending balance, shares at Dec. 31, 2017	0	0	2,367,634,022

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (5,320,974)	$ (7,694,684)
Adjustments to reconcile net loss to net cash (used in) operating activities:
Depreciation and amortization	1,890	8,437
Amortization of intangible assets	0	106,548
Stock based compensation	216,543	145,729
Common stock issued for services	76,000	285,200
Amortization of debt discount	419,666	514,668
Change in fair value of derivative liability	(496,306)	1,324,384
Accrued interest on convertible notes payable	203,697	120,824
Loss on debt conversions	2,502,819	2,889,540
Write-off of derivative liability to additional paid in capital	537,698	0
Impairment of long-lived assets	0	876,056
Changes in assets and liabilities:
Inventory	(47,225)	20,014
Deposits	13,145	(5,591)
Accounts payable	(170,934)	196,379
Accrued expenses	19,503	(22,791)
Deferred revenue	(37,995)	22,995
CASH (USED IN) OPERATING ACTIVITIES	(2,082,493)	(1,212,292)
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in purchased assets	(302,689)	0
NET CASH PROVIDED BY INVESTING ACTIVITIES:	(302,689)	0
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash provided from Convertible Promissory Note with Chicago Venture Partners, L.P.	3,860,344	1,255,000
Cash payoff to TCA Global Credit Master Fund, LP	(1,509,041)	0
NET CASH PROVIDED BY FINANCING ACTIVITIES	2,351,303	1,255,000
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(33,879)	42,708
CASH AND CASH EQUIVALENTS, beginning of period	103,070	60,362
CASH AND CASH EQUIVALENTS, end of period	69,191	103,070
Supplemental disclosures of cash flows information:
Cash paid for interest	0	0
Cash paid for income taxes	0	0
NON-CASH TRANSACTIONS
Shares issued for convertible note and interest conversion	2,329,800	2,423,729
Shares issued for debt conversion	0	64,000
Shares issued for class action settlements	0	2,000,000
Shares issued for mezzanine equity	0	300,000
Series B Convertible Preferred Stock converted into convertible notes payable	0	(1,500,000)
Series B Convertible Preferred Stock converted into convertible notes payable debt discount	0	315,669
Common stock issued for conversion of accounts payable	$ 548,539	$ 0

1. DESCRIPTION OF BUSINESS AND

1. DESCRIPTION OF BUSINESS AND ORGANIZATION	12 Months Ended
	Dec. 31, 2017
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 Kirkland, 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. On October 3, 2017, the Company closed the acquisition of 51% of the Purchased Assets from David Reichwein, a Pennsylvania resident, GIP International Ltd, a Hong Kong corporation and DPR International LLC, a Pennsylvania limited liability corporation. The Purchased Assets include intellectual property, copy rights and trademarks related to reflective tiles and flooring. The Company did not acquire business, customer list or employees. The Company acquired its 51% interest in the Purchased Assets for $400,000. The Company funded equipment and rent of an office lease. On February 16, 2018, the Company purchased the remaining 49% of the Purchased Assets in exchange for a one-time payment of $250,000. As of December 31, 2017, the Company had recorded investment in purchased assets of $302,689. On October 17, 2017, the Company informed by Alpine Securities Corporation (“Alpine”) that Alpine has demonstrated compliance with the Financial Industry Regulatory Authority (“FINRA”) Rule 6432 and Rule 15c2-11 under the Securities Exchange Act of 1934. As a result, Alpine may initiate an unpriced quotation for the Company’s common stock. The Company expects to file an amended application with the OTC Markets to list the Company’s common stock on the OTCQB once the minimum share price of $0.01 per share is achieved. The Company currently trades on the OTC Pink Sheet market. 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 the Company’s Form 15c2-11.

2. GOING CONCERN

2. GOING CONCERN	12 Months Ended
	Dec. 31, 2017
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 $5,320,974 and $7,694,684 for the years ended December 31, 2017 and 2016, respectively. Our net cash used in operating activities was $2,082,493 and $1,212,192 for the years ended December 31, 2017 and 2016, respectively. The Company anticipates that it will record losses from operations for the foreseeable future. As of December 31, 2017, our accumulated deficit was $129,731,305. 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, 2017 and 2016 filed with the SEC on March 28, 2018 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, 2017
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 - 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 Recent accounting pronouncements, other than those below, issued by the FASB, the AICPA and the SEC did not or are not believed by management to have a material effect on the Company’s present or future financial statements. Effective January 1, 2017, the Company adopted ASU 2015-11, Inventory: Simplifying the Measurement of Inventory, which affects reporting entities that measure inventory using either the first-in, first-out or average cost method. Specifically, the guidance requires that inventory be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable cost of completion, disposal, and transportation. This adoption did not have a material impact on the Company’s condensed consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business, to assist with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those years. Early adoption is permitted for transactions not reported in financial statements that have been issued or made available for issuance. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments, which reduces the diversity in practice on how certain transactions are classified in the statement of cash flows. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company is evaluating the effect of adopting this pronouncement. In February 2016, the FASB issued ASU 2016-02, Leases, which requires a lessee, in most leases, to initially recognize a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within with those years. Early adoption is permitted. The Company is evaluating the effect of adopting this pronouncement. In July 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815). In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718), Scope of Modification Accounting. In March 2016, the FASB issued Accounting Standards Update No. 2016-09 (ASU 2016-09), Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting

4. TRANSACTIONS WITH CANX USA,

4. TRANSACTIONS WITH CANX USA, LLC AND LOGIC WORKS LLC	12 Months Ended
	Dec. 31, 2017
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 nine (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, 2017.

5. INVENTORY

5. INVENTORY	12 Months Ended
	Dec. 31, 2017
Inventory Disclosure [Abstract]
INVENTORY	Inventory as of December 31, 2017 and 2016 consisted of the following: December 31, December 31, 2017 2016 Raw materials $ 110,000 $ - Finished goods 375,678 438,453 Inventory reserve (20,000 ) (20,000 ) Total $ 465,678 $ 418,453 Raw materials consist of supplies for the flooring product line. 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. PROPERTY AND EQUIPMENT

6. PROPERTY AND EQUIPMENT	12 Months Ended
	Dec. 31, 2017
Property, Plant and Equipment [Abstract]
PROPERTY AND EQUIPMENT	Property and equipment as of December 31, 2017 and 2016 consists of the following: December 31, December 31, 2017 2016 Machines and equipment $ 365,861 $ 63,172 Furniture and fixtures 49,787 49,787 Computer equipment 52,304 52,304 Leasehold improvements 56,965 56,965 Total property and equipment 524,917 222,228 Less accumulated depreciation and amortization (222,228 ) (220,338 ) Net property and equipment $ 302,689 $ 1,890 Fixed assets, net of accumulated depreciation, were $302,689 and $1,890 as of December 31, 2017 and 2016, respectively. Accumulated depreciation was $222,228 and $220,338 as of December 31, 2017 and 2016, respectively. Total depreciation expense was $1,890 and $8,437 for the years ended December 31, 2017 and 2016, respectively. All equipment is used for manufacturing, selling, general and administrative purposes and accordingly all depreciation is classified in cost of goods sold, selling, general and administrative expenses. The Company will begin depreciation on the purchased machine January 1, 2018 when significant operations begin. On October 3, 2017, the Company closed the acquisition of 51% of the Purchased Assets from David Reichwein, a Pennsylvania resident, GIP International Ltd, a Hong Kong corporation and DPR International LLC, a Pennsylvania limited liability corporation. The Purchased Assets include intellectual property, copy rights and trademarks related to reflective tiles and flooring. The Company did not acquire business, customer list or employees. The Company acquired its 51% interest in the Purchased Assets for $400,000. The Company funded equipment and rent of an office lease. On February 16, 2018, the Company purchased the remaining 49% of the Purchased Assets in exchange for a one-time payment of $250,000. As of December 31, 2017, the Company had recorded investment in purchased assets of $302,689.

7. CONVERTIBLE NOTES PAYABLE, N

7. CONVERTIBLE NOTES PAYABLE, NET	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
CONVERTIBLE NOTES PAYABLE, NET	Convertible notes payable as of December 31, 2017 consisted of the following: Balance Accrued Debt As of Principal Interest Discount December 31, 2017 6% Secured convertible note (2014) $ 39,251 $ 1,974 $ - $ 41,225 7% Convertible note ($850,000) 250,000 321,652 - 571,652 10% OID Convertible Promissory Note with Chicago Venture Partners, L.P. 2,980,199 120,492 (698,547 ) 2,402,144 $ 3,269,450 $ 444,118 $ (698,547 ) $ 3,015,021 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 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, have called 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, 2017 and 2016. 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. Logic Works funded $350,000. The funding provided for interest at 6% with a default interest of 24% per annum and required 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 nine (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 February 28, 2017, Logic Works converted principal and interest of $297,939 into 82,640,392 shares of our common stock at a per share conversion price of $0.004. As of December 31, 2017, the outstanding principal on this 6% convertible note was $39,251 and accrued interest was $1,974, which results in a total liability of $41,225. On February 28, 2017, Logic Works converted principal and interest of $291,044 into 82,640,392 shares of the Company’s common stock at a per share conversion price of $0.004. 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. 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. 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. 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 rate of interest was increased to 24% per annum. On October 1, 2015, the rate of interest increased to 24% compounded. The conversion price was $0.007 per share, subject to adjustment as provided in the Note. As of December 31, 2017, the outstanding principal on this 7% convertible note was $250,000 and accrued interest was $321,652, which results in a total liability of $571,652. Since the note is in default and the terms of settlement are no longer acceptable to the holder the Company has recognized the loss of $571,652 and reclassified the derivative liability related to the beneficial conversion to equity. 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”) As of December 31, 2016, the Company was 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 LLC converted TCA 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, 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 during the year ended December 31, 2016. 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. Funding from Chicago Venture Partners, L.P. (“Chicago Venture”) The Company has the following funding transactions with Chicago Venture: Securities Purchase Agreement with Chicago Venture Partners, L.P. 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. 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 February 1, 2017, the Company closed the transactions described below with 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”). The total amount of funding under the Chicago Venture Agreements is $1,105,000. 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 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. 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. Securities Purchase Agreement, Secured Promissory Notes and Security Agreement On August 11, 2017, the Company executed the following agreements with Chicago Venture: (i) Securities Purchase Agreement; (ii) Secured Promissory Notes; and (iii) Security Agreement (collectively the “Chicago Venture Agreements”). The Company entered into the Chicago Venture Agreements with the intent to acquire working capital to grow the Company’s business. 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. We agreed to reserve 200,000,000 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 August 11, 2018. The Debt carries an interest rate of ten percent (10%). The Debt is convertible, at Chicago Venture’s option, into our 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. Securities Purchase Agreement, Secured Promissory Notes and Security Agreement On December 22, 2017, the Company executed the following agreements with Chicago Venture: (i) Securities Purchase Agreement; (ii) Secured Promissory Notes; and (iii) Security Agreement (collectively the “Chicago Venture Agreements”). The Company entered into the Chicago Venture Agreements with the intent to acquire working capital to grow the Company’s businesses. The total amount of funding under the Chicago Venture Agreements is $1,105,000. 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 three times the number of shares based on the redemption value with a minimum of 50 million shares of its 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 December 21, 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 $0.015 per share subject to adjustment as provided for in the Secured Promissory Notes. The Company’s obligation to pay the Debt, or any portion thereof, is secured by all of the Company’s assets As of December 31, 2017, the outstanding principal balance due to Chicago Venture is $2,980,199, accrued interest was $120,492, net of the OID of $698,547, which results in a total amount of $2,402,144. The OID has been recorded as a discount to debt and $419,666 was amortized to interest expense during the nine months ended September 30, 2017. During the year ended December 31, 2017, Chicago Venture converted principal and accrued interest of $2,688,000 into 554,044,030 shares of the Company’s common stock at a per share conversion price of $0.0049. 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. The Company recognized $2,384,678 and $0 of loss on debt conversions during the years ended December 31, 2017 and 2016, respectively. 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.

8. DERIVATIVE LIABILITY

8. DERIVATIVE LIABILITY	12 Months Ended
	Dec. 31, 2017
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. If the conversion features of conventional convertible debt provide for a rate of conversion that is below market value, this feature is characterized as a beneficial conversion feature (BCF). A BCF is recorded by the Company as a debt discount pursuant to ASC Topic 470-20. Debt with Conversion and Other Options. In those circumstances, the convertible debt is recorded net of the discount related to the BCF and the Company amortizes the discount to interest expense over the life of the debt using the effective interest method. The debt is convertible at the lesser of 65% of the fair value of the Company’s common stock or $0.009 requiring the conversion feature to be bifurcated from the host debt contract and accounting for separately as a derivative, resulting in periodic revaluations. Derivative liability as of December 31, 2017 is as follows: Carrying Fair Value Measurements Using Inputs Amount at Financial Instruments Level 1 Level 2 Level 3 December 31, 2017 Liabilities: Derivative Instruments $ - $ 2,660,167 $ - $ 2,660,167 Total $ - $ 2,660,167 $ - $ 2,660,167 For the year ended December 31, 2017, the Company recorded non-cash income of $496,036 related to the “change in fair value of derivative” expense related to its 6%, 7% and 10% convertible notes. 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. 7% Convertible Notes 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. 6% Convertible Notes 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. 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 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 was 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 were 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 did 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 remained 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 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. 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. At inception, the Company valued the conversion feature of the Replacement Debentures as a derivative liability in the amount of $979,716 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.

9. RELATED PARTY TRANSACTIONS A

9. RELATED PARTY TRANSACTIONS AND CERTAIN RELATIONSHIPS	12 Months Ended
	Dec. 31, 2017
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS AND CERTAIN RELATIONSHIPS	Since January 1, 2016, 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 4, and Chicago Venture Partners, L.P. discussed in Note 7, 8, 10 and 14. Transactions with an Entity Controlled by Marco Hegyi 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, our Chief Executive Officer, 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, we 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 our common stock at an exercise price of $0.01 per share. In addition, Mr. Hegyi received Warrants to purchase up to 10,000,000 shares of our common stock 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, we issued 3,000,000 shares of its common stock to an entity affiliated with Mark E. Scott, Chief Financial Officer, pursuant to a conversion of debt for $30,000. The shares were valued at the fair market price of $0.01 per share. On October 21, 2016, Mr. Scott cancelled stock option grants totaling 12,000,000 shares of our common stock at $0.01 per share. Mr. Scott has 4,000,000 share stock option grants which are fully vested. On October 21, 2016, Mr. Scott converted $40,000 in deferred compensation into 4,000,000 shares of our common stock at $0.01 per share. The price per share was based on the thirty-day trailing average. On October 21, 2016, Mr. Scott was granted 6,000,000 shares of our common stock at $0.01 per share. The price per share was based on the thirty-day trailing average. On October 15, 2017, an entity controlled by Mr. Scott was granted an option to purchase 12,000,000 shares of common stock at an exercise price of $0.006 per share. The stock option grant vests quarterly over three years and is exercisable for 5 years. The stock option grant was valued at $18,000. Transactions with Michael E. Fasci On January 27, 2016, we issued 1,500,000 shares of its common stock to Michael Fasci, a member of the Board of Directors, for director services. The shares were valued at the fair market price of $0.01 per share. On May 25, 2016, we issued 2,500,000 shares of its common stock to Michael Fasci, a member of the Board of Directors, for director services. The shares were valued at the fair market price of $0.02 per share. On October 21, 2016, we entered into a Consulting Agreement with an entity controlled by Michael E. Fasci, a Director. Mr. Fasci is 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. On February 4, 2017, we issued 1,000,000 shares of our common stock to Michael E. Fasci pursuant to a service award for $15,000. The shares were valued at the fair market price of $0.015 per share. On April 27, 2017, we issued 1,000,000 shares of our common stock to Michael E. Fasci pursuant to a service award for $9,000. The shares were valued at the fair market price of $0.009 per share. On April 27, 2017, we issued 2,000,000 shares of our common stock to Michael E. Fasci pursuant to a consulting agreement for $18,000. The shares were valued at the fair market price of $0.009 per share. On November 2, 2017, we issued 2,000,000 shares of our common stock to Michael E. Fasci pursuant to a consulting agreement for $10,000. The shares were valued at the fair market price of $0.005 per share. Transactions with Katherine McLain Ms. Katherine McLain was appointed as a director on February 14, 2017. On June 28, 2017, we issued 1,000,000 shares of our common stock to Ms. McLain pursuant to a service award for $9,000. The shares were valued at the fair market price of $0.009 per share. On October 23, 2017, we issued 1,000,000 shares of our common stock to Ms. McLain pursuant to a service award for $5,000. The shares were valued at the fair market price of $0.005 per share. Transaction with Thom Kozik Mr. Kozik was appointed as a director on October 5, 2017. On October 23, 2017, we issued 2,000,000 shares of our common stock to Mr. Kozik pursuant to a service award for $10,000. The shares were valued at the fair market price of $0.005 per share. Transaction with Joseph Barnes On October 25, 2017, Mr. Barnes was granted an option to purchase 10,000,000 shares of common stock at an exercise price of $0.007 per share. The stock option grant vests quarterly over three years and is exercisable for 5 years. The stock option grant was valued at $24,000.

10. EQUITY

10. EQUITY	12 Months Ended
	Dec. 31, 2017
Equity [Abstract]
EQUITY	Authorized Capital Stock The Company has authorized 6,010,000,000 shares of capital stock, of which 6,000,000,000 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. On October 24, 2017 the Company filed a Certificate of Amendment of Certificate of Incorporation with the Secretary of State of the State of Delaware to increase the authorized shares of common stock from 3,000,000,000 to 6,000,000,000 shares. 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. Certificate of Elimination for Series B and C Preferred Stock On October 24, 2017, the Company filed a Certificate of Elimination with the Secretary of State of the State of Delaware to eliminate the Series B Convertible Preferred Stock and Series C Preferred Stock of the Company. None of the authorized shares of either the Series B or Series C Preferred Stock were outstanding. The Certificate of Elimination, effective upon filing, had the effect of eliminating from the Company's Certificate of Incorporation, as amended, all matters set forth in the Certificate of Designations of the Series B Convertible Preferred Stock and Series C Preferred Stock with respect to each respective series, which were both previously filed by the Company with the Secretary of State on October 22, 2015. Accordingly, the 150,000 shares of Series B Preferred Stock and 51 shares of Series C Preferred Stock previously reserved for issuance under their respective Certificates of Designation resumed their status as authorized but unissued shares of undesignated preferred stock of the Company upon filing of the Certificate of Elimination. 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, 2017, the Company had had the following sales of unregistered of equity securities to accredited investors unless otherwise indicated: On February 28, 2017, Logic Works converted principal and interest of $291,044 into 82,640,392 shares of the Company’s common stock at a per share conversion price of $0.004. During the year ended December 31, 2017, five vendors converted debt of $559,408 into 64,869,517 shares of the Company’s common stock at the fair market price of $0.0086 per share. During the year ended December 31, 2017, four directors were issued 10,000,000 shares of the Company’s common stock at the fair market price of $0.0076 per share for 2017 director services. During the year ended December 31, 2017, Chicago Venture converted principal and accrued interest of $2,688,000 into 554,044,030 shares of the Company’s common stock at a per share conversion price of $0.0049. 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. Warrants The Company did not issue any warrants during the year ended December 31, 2017. 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, 2017 is as follows: December 31, 2017 Weighted Average Exercise Shares Price Outstanding at beginning of period 595,000,000 $ 0.031 Issued - - 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, 2017 is presented below: December 31, 2017 Weighted Weighted Weighted Average Average Average Number of Remaining Exercise Shares Exercise Warrants Life Price Exerciseable Price 540,000,000 1.28 $ 0.033 540,000,000 $ 0.033 55,000,000 2.55 0.010 45,000,000 0.010 595,000,000 1.32 $ 0.031 585,000,000 $ 0.031 Warrants totaling 45,000,000 shares of common stock had an intrinsic value of $1,030,500 as of December 31, 2017.

11. STOCK OPTIONS

11. STOCK OPTIONS	12 Months Ended
	Dec. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
STOCK OPTIONS	Description of Stock Option Plan On October 23, 2017, the Company’s Shareholders authorized a Stock Incentive Plan whereby a maximum of 100,000,000 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. The Company has outstanding unexercised stock option grants totaling 56,000,000 shares as of December 31, 2017. The Company filed a registration statement on Form S-8 to register 100,000,000 shares of Company’s common stock related to the 2017 Stock Incentive Plan. 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, 2017, the Company had the following stock option activity: On June 28, 2017, the Company’s Compensation Committee granted four advisory committee members each an option to purchase 500,000 shares of the Company’s common stock under the Company’s 2011 Stock Incentive Plan at an exercise price of $0.009 per share, the fair market price on June 28, 2017. On October 1, 2017, Mr. Reichwein was granted an option to purchase 20,000,000 shares of our common stock under our 2011 Stock Incentive Plan at $0.006 per share. The shares vest as follows: i Ten million shares vested immediately; ii Ten million shares vest on a quarterly basis over two years beginning on the date of grant. The stock option grants are exercisable for 5 years and were valued at $20,000. On October 15, 2017, an entity controlled by Mr. Scott was granted an option to purchase 12,000,000 shares of common stock at an exercise price of $0.006 per share. The stock option grant vests quarterly over three years and is exercisable for 5 years. The stock option grant was valued at $18,000. On October 25, 2017, Mr. Barnes was granted an option to purchase 10,000,000 shares of common stock at an exercise price of $0.007 per share. The stock option grant vests quarterly over three years and is exercisable for 5 years. The stock option grant was valued at $24,000. 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. As of December 31, 2017, there are 56,000,000 options to purchase common stock at an average exercise price of $0.007 per share outstanding under the 2017 Stock Incentive Plan. The Company recorded $29,250 and $121,770 of compensation expense, net of related tax effects, relative to stock options for the years ended December 31, 2017 and 2016 in accordance with ASC 505. Net loss per share (basic and diluted) associated with this expense was approximately ($0.00). As of December 31, 2017, there is $64,151 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 4.06 years. Stock option activity for the years ended December 31, 2017 and 2016 is as follows: Weighted Average Options Exercise Price $ Outstanding as of December 31, 2015 29,020,000 $ 0.03 $ 811,000 Granted - - - Exercised - - - Forfeitures (17,010,000 ) (0.041 ) (690,500 ) Outstanding as of December 31, 2016 12,010,000 0.01 120,500 Granted 44,000,000 0.006 280,000 Exercised - - - Forfeitures (10,000 ) - (500 ) Outstanding as of December 31, 2017 56,000,000 $ 0.007 $ 400,000 The following table summarizes information about stock options outstanding and exercisable at December 31, 2017 Weighted Weighted Weighted Average Average Average Range of Number Remaining Life Exercise Price Number Exercise Price Exercise Prices Outstanding In Years Exerciseable Exerciseable Exerciseable $ 0.006 32,000,000 4.75 $ 0.006 12,500,000 $ 0.006 0.007 10,000,000 4.75 0.007 1,391,666 0.007 0.009 2,000,000 2.50 0.009 333,333 0.009 0.010 12,000,000 1.88 0.010 12,000,000 0.010 56,000,000 4.06 $ 0.007 26,225,000 $ 0.008 Stock option grants totaling 26,225,000 shares of common stock have an intrinsic value of $655,061 as of December 31, 2017.

12. COMMITMENTS, CONTINGENCIES

12. COMMITMENTS, CONTINGENCIES AND LEGAL PROCEEDINGS	12 Months Ended
	Dec. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS, CONTINGENCIES AND LEGAL PROCEEDINGS	Legal Proceedings From time to time, the Company may become subject to various legal proceedings that are incidental to the ordinary conduct of its business. Although the Company cannot accurately predict the amount of any liability that may ultimately arise with respect to any of these matters, it makes provision for potential liabilities when it deems them probable and reasonably estimable. These provisions are based on current information and may be adjusted from time to time according to developments. Sales, Payroll and Other Tax Liabilities As of December 31, 2017, we owe approximately $119,000 in sales tax. Other Legal Proceedings We may be sued for non-payment of lease payments at closed stores. We are subject to legal actions with various vendors. Operating Leases 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 $2,792 and increased 3.5% per year thereafter through the end of the lease. We terminated this lease agreement as of August 31, 2917. 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 $5,373 through May 1, 2020. We also agreed to a repayment schedule for past due rent and owes $45,175 as of December 31, 2017. We are past due on the repayment schedule by $45,175 as of December 31, 2017. We do not have an option to extend the lease after May 1, 2020. On May 31, 2017, the Company rented space at 5400 Carillon Point, Kirkland, Washington 98033 for $623 per month for our corporate office and use of space in the Regus network, including California. Our agreement expires May 31, 2018 and is expected to be renewed. On October 1, 2017, GrowLife Hydroponics, Inc. entered into a lease in Calgary, Canada. The monthly lease is approximately $1,997. The lease expires September 30, 2022. On December 19, 2017, GrowLife Innovations, Inc. entered into a lease in Grand Prairie, Texas dated October 9, 2017, for the manufacturing and distribution of its flooring products. The monthly lease is approximately $15,000. The lease expires December 15, 2018 and can be renewed. 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 2018 $ 319,962 2019 174,615 2020 61,668 2021 - 2022 - Beyond - Total $ 556,245 Employment and Consulting Agreements Employment Agreement with Marco Hegyi 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 was 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 is entitled to participate in all group employment benefits that are offered by the Company to its 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 agreed to 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 we (or its successor or the surviving entity) terminate 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. Chief Financial Officer Agreement with an Entity Controlled by Mark E. Scott On July 31, 2014, 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. Mr. Scott became a full time employee on November 1, 2017. 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 our Common Stock under our 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, we reduced the exercise price to $0.01 per share. The shares vested 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 our 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 (earned as of October 3, 2017). On October 15, 2017, an entity controlled by Mr. Scott was granted an option to purchase 12,000,000 shares of common stock at an exercise price of $0.006 per share. The option grant vests on a quarterly basis quarterly over three years. All options 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. Scott’s continuous status as consultant to the Company is terminated by us without Cause or Mr. Scott terminates his employment with us 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 our Stock Incentive Plan except for CANX USA, LLC, then 100% of the total number of shares shall immediately become vested. Mr. Scott is entitled to participate in all group employment benefits that are offered by us 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. 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 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 our 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 our 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 the Company engaged Mr. Barnes as its Senior Vice-President of Business Development from October 1, 2014 on an at will basis. On August 16, 2917, Mr. Joseph Barnes, Senior Vice-President of Business Development GrowLife Hydroponics, Inc, was promoted to President of GrowLife Hydroponics, Inc. 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. On August 16, 2017, Mr. Barnes was increased to $150,000 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, we amended the exercise price of the stock option grants for Mr. Barnes to $0.010 per share. On October 25, 2017, Mr. Barnes was granted an option to purchase 10,000,000 shares of common stock at an exercise price of $0.007 per share. The option grant vests on a quarterly basis over three years. All options 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 is to participate in all group employment benefits that are offered by us 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. Offer Letter with David Reichwein On October 1, 2017, the Company entered into an Offer Letter with David Reichwein pursuant to which the Company engaged Mr. Reichwein as its Vice-President of Research and Development on an at will basis. Per the terms of the Reichwein Agreement, Mr. Reichwein’s compensation is $150,000 on an annual basis. Starting on the first quarter 2018, Mr. Reichwein is eligible to earn a quarterly commission based on 10% of tile gross margin dollars. Mr. Reichwein was granted an option to purchase twenty million shares of our common stock under our 2011 Stock Incentive Plan at $0.006 per share. The shares vest as follows: i Ten million shares vested immediately; ii Ten million shares vest on a quarterly basis over two years beginning on the date of grant. 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. Reichwein’s continuous status as employee to the Company is terminated by us without Cause or Mr. Reichwein terminates his employment with us for Good Reason as defined in the Reichwein 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. Reichwein is to participate in all group employment benefits that are offered by the Company to its 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. Reichwein is entitled to fifteen days of vacation annually and has certain insurance and travel employment benefits. Mr. Reichwein may receive severance benefits and our obligation under a termination by the Company without Cause or Mr. Reichwein terminates his employment for Good Reason are discussed above. 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. The Agreement expired October 20, 2017.

13. INCOME TAXES

13. INCOME TAXES	12 Months Ended
	Dec. 31, 2017
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 $5,300,000 and $7,700,000 and for the years ended December 31, 2017 and 2016, respectively. The Company has net operating loss carryforwards of approximately $18,000,000, which expire in 2021-2031. 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 $7,100,000 was established as of December 31, 2017. 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, 2017, 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, 2017 and 2016 are as follows: 2017 2016 U.S. operations loss carry forward and state at statutory rate of 40% $ 7,154,699 $ 6,704,362 Less valuation allowance 7,154,699 (6,704,362 ) Net deferred tax assets - - Change in valuation allowance $ 7,154,699 $ (6,704,362 ) A reconciliation of the United States Federal Statutory rate to the Company’s effective tax rate for the years ended December 31, 2017 and 2016 is as follows: 2017 2016 Federal statutory rate -34.0 % -34.0 % State income tax rate -6.0 % -6.0 % Change in valuation allowance 40.0 % 40.0 % Effective tax rate 0.0 % 0.0 % The Company’s tax returns for 2012 to 2017 are open to review by the Internal Revenue Service.

14. SUBSEQUENT EVENTS

14. SUBSEQUENT EVENTS	12 Months Ended
	Dec. 31, 2017
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, 2017, the following material transactions occurred: Equity Issuances On February 7, 2018, the Company issued 7,660,274 shares to three directors. The shares were valued at the fair market price of $0.020 per share or $153,205. The shares were issued for annual director service to the Company. On February 12, 2018, the Company received a Notice of Conversion from Forglen LLC converting principal and interest of $321,945.00 owed under that certain 7% Convertible Note as amended June 19, 2014 into 127,000,000 shares of our common stock with a fair value of $2,235,200 On March 13, 2018, the Company, received a Notice of Conversion from Logic Works LLC converting principal and interest of $41,690 owed under that a 6% Convertible Note into 16,445,609 shares of our common stock with a fair value of $248,329. As of March 13, 2018, the outstanding balance on the Convertible Note was $0. During the three months ended March 31, 2018, Chicago Venture converted principal and interest of $1,877,668 into 333,821,634 shares of our common stock at a per share conversion price of $0.0055 with a fair value of $5,040,707. Securities Purchase Agreements with St. George Investments, LLC On February 9, 2018, the Company executed the following agreements with St. George Investments LLC, a Utah limited liability company (“St. George”): (i) Securities Purchase Agreement; and (ii) Warrant to Purchase Shares of Common Stock. The Company entered into the St. George Agreements with the intent to acquire working capital to grow the Company’s businesses. Pursuant to the St. George Agreements, the Company agreed to sell and to issue to St. George for an aggregate purchase price of $1,000,000: (a) 48,687,862 Shares of newly issued restricted Common Stock of the Company; and (b) the Warrant. St. George has paid the entire Purchase Price for the Securities. The Warrant is exercisable for a period of five (5) years from the Closing, for the purchase of up to 48,687,862 shares of the Company’s Common Stock at an exercise price of $0.05 per share of Common Stock. The Warrant is subject to a cashless exercise option at the election of St. George and other adjustments as detailed in the Warrant. On March 20, 2018, the Company entered into and closed on a Common Stock Purchase Agreement with St. George Investments, LLC, a Utah limited liability company. Pursuant to the St. George Agreements, the Company sold and agreed to issue to St. George 6,410, 256 shares of newly issued restricted Common Stock of the Company at a purchase price of $0.0156 per share. The Purchase Price was paid at Closing and the Shares shall be issued upon the satisfaction of the Share Delivery Conditions as set forth in the Agreement. The Shares purchased represents less than 0.3% of the Company’s current issued and outstanding common stock. First Addendum to Agreements with David Reichwein On February 16, 2018, the Company entered into an Addendum to amend the terms between the Company and David Reichwein. Pursuant to the First Addendum, the Company purchased the remaining 49% of the Purchased Assets in exchange for a one-time payment of $250,000 and the cancellation of Reichwein’s right to receive a 10% commission on certain sales of Free Fit products as was set forth in Reichwein’s employment agreement. In exchange for the cancellation of the commission in the employment agreement, Reichwein was granted the opportunity to earn up to two $100,000 cash bonuses and an aggregate common stock bonus of up to 7,500,000 shares if certain revenue and gross margin goals are met in 2018. Amendment 2 to Note with Forglen LLC On February 23, 2018, the Company, submitted a Notice of Prepayment to Forglen LLC to prepay the balance owed under that certain 7% Convertible Note as amended June 19, 2014 (the “Convertible Note”). In response to the Prepay Notice, Forglen submitted a Notice of Conversion on March 8, 2018 to convert the entire balance of the Note and all accrued interest. Upon negotiations between Forglen and the Company, the parties entered into a Second Amendment to the Note, dated March 12, 2018. Pursuant to the Amendment, the Note’s maturity date has been extended to December 31, 2019, and interest on the Note shall accrue at 7% per annum, compounding on the maturity date. As consideration for the Amendment, the Company rescinded its Prepay Notice and Forglen rescinded its Conversion Notice. Additionally, after review of the Note and accrued interest, the Parties agreed that as of March 12, 2018, the outstanding balance on the Note was $270,787. Installment Agreement with the City of Boulder, Colorado On March 12, 2017, the Company entered into an Installment Agreement with the City of Boulder, Colorado. This Agreement requires the Company to pay $5,000 per month over the next twenty four months or $119,217 for unpaid sales taxes.

3. SIGNIFICANT ACCOUNTING POL21

3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS (Policies)	12 Months Ended
	Dec. 31, 2017
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 nine 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, 2017 and 2016, respectively.
Property and Equipment	Property and equipment are stated at cost. Assets acquired held 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.
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 nine-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 nine 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, 2017 and 2016, 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, 2017, there are also (i) stock option grants outstanding for the purchase of 56,000,000 common shares at a $0.007 average exercise price; (ii) warrants for the purchase of 595 million common shares at a $0.031 average exercise price; and (iii) 241,766,075 million shares related to convertible debt that can be converted at $0.002535 per share. In addition, we have an unknown number of common shares to be issued under the Chicago Venture Partners, L.P. financing agreements. 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.
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 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	Recent accounting pronouncements, other than those below, issued by the FASB, the AICPA and the SEC did not or are not believed by management to have a material effect on the Company’s present or future financial statements. Effective January 1, 2017, the Company adopted ASU 2015-11, Inventory: Simplifying the Measurement of Inventory, which affects reporting entities that measure inventory using either the first-in, first-out or average cost method. Specifically, the guidance requires that inventory be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable cost of completion, disposal, and transportation. This adoption did not have a material impact on the Company’s condensed consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business, to assist with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those years. Early adoption is permitted for transactions not reported in financial statements that have been issued or made available for issuance. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments, which reduces the diversity in practice on how certain transactions are classified in the statement of cash flows. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company is evaluating the effect of adopting this pronouncement. In February 2016, the FASB issued ASU 2016-02, Leases, which requires a lessee, in most leases, to initially recognize a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within with those years. Early adoption is permitted. The Company is evaluating the effect of adopting this pronouncement. In July 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815). In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718), Scope of Modification Accounting. In March 2016, the FASB issued Accounting Standards Update No. 2016-09 (ASU 2016-09), Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting

5. INVENTORY (Tables)

5. INVENTORY (Tables)	12 Months Ended
	Dec. 31, 2017
Inventory Disclosure [Abstract]
Schedule of Inventory	December 31, December 31, 2017 2016 Raw materials $ 110,000 $ - Finished goods 375,678 438,453 Inventory reserve (20,000 ) (20,000 ) Total $ 465,678 $ 418,453

6. PROPERTY AND EQUIPMENT (Tabl

6. PROPERTY AND EQUIPMENT (Tables)	12 Months Ended
	Dec. 31, 2017
Property, Plant and Equipment [Abstract]
Summary of property and equipment	December 31, December 31, 2017 2016 Machines and equipment $ 365,861 $ 63,172 Furniture and fixtures 49,787 49,787 Computer equipment 52,304 52,304 Leasehold improvements 56,965 56,965 Total property and equipment 524,917 222,228 Less accumulated depreciation and amortization (222,228 ) (220,338 ) Net property and equipment $ 302,689 $ 1,890

7. CONVERTIBLE NOTES PAYABLE,24

7. CONVERTIBLE NOTES PAYABLE, NET (Tables)	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
Convertible notes summarized	Convertible notes payable as of December 31, 2017 consisted of the following: Balance Accrued Debt As of Principal Interest Discount December 31, 2017 6% Secured convertible note (2014) $ 39,251 $ 1,974 $ - $ 41,225 7% Convertible note ($850,000) 250,000 321,652 - 571,652 10% OID Convertible Promissory Note with Chicago Venture Partners, L.P. 2,980,199 120,492 (698,547 ) 2,402,144 $ 3,269,450 $ 444,118 $ (698,547 ) $ 3,015,021 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

8. DERIVATIVE LIABILITY (Tables

8. DERIVATIVE LIABILITY (Tables)	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
Fair Value of Derivative Liability	Derivative liability as of December 31, 2017 is as follows: Carrying Fair Value Measurements Using Inputs Amount at Financial Instruments Level 1 Level 2 Level 3 December 31, 2017 Liabilities: Derivative Instruments $ - $ 2,660,167 $ - $ 2,660,167 Total $ - $ 2,660,167 $ - $ 2,660,167 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

10. EQUITY (Tables)

10. EQUITY (Tables)	12 Months Ended
	Dec. 31, 2017
Equity [Abstract]
Shares for services	December 31, 2017 Weighted Average Exercise Shares Price Outstanding at beginning of period 595,000,000 $ 0.031 Issued - - Exercised - - Forfeited - - Expired - - Outstanding at end of period 595,000,000 $ 0.031 Exerciseable at end of period 595,000,000
Warrants	December 31, 2017 Weighted Weighted Weighted Average Average Average Number of Remaining Exercise Shares Exercise Warrants Life Price Exerciseable Price 540,000,000 1.28 $ 0.033 540,000,000 $ 0.033 55,000,000 2.55 0.010 45,000,000 0.010 595,000,000 1.32 $ 0.031 585,000,000 $ 0.031

11. STOCK OPTIONS (Tables)

11. STOCK OPTIONS (Tables)	12 Months Ended
	Dec. 31, 2017
Stock Options Tables
Stock options	Stock option activity for the years ended December 31, 2017 and 2016 is as follows: Weighted Average Options Exercise Price $ Outstanding as of December 31, 2015 29,020,000 $ 0.03 $ 811,000 Granted - - - Exercised - - - Forfeitures (17,010,000 ) (0.041 ) (690,500 ) Outstanding as of December 31, 2016 12,010,000 0.01 120,500 Granted 44,000,000 0.006 280,000 Exercised - - - Forfeitures (10,000 ) - (500 ) Outstanding as of December 31, 2017 56,000,000 $ 0.007 $ 400,000 The following table summarizes information about stock options outstanding and exercisable at December 31, 2017 Weighted Weighted Weighted Average Average Average Range of Number Remaining Life Exercise Price Number Exercise Price Exercise Prices Outstanding In Years Exerciseable Exerciseable Exerciseable $ 0.006 32,000,000 4.75 $ 0.006 12,500,000 $ 0.006 0.007 10,000,000 4.75 0.007 1,391,666 0.007 0.009 2,000,000 2.50 0.009 333,333 0.009 0.010 12,000,000 1.88 0.010 12,000,000 0.010 56,000,000 4.06 $ 0.007 26,225,000 $ 0.008

12. COMMITMENTS, CONTINGENCIE28

12. COMMITMENTS, CONTINGENCIES AND LEGAL PROCEEDINGS (Tables)	12 Months Ended
	Dec. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Schedule of Future minimum rental payments	Years Ended December 31, Total 2018 $ 319,962 2019 174,615 2020 61,668 2021 - 2022 - Beyond - Total $ 556,245

13. INCOME TAXES (Tables)

13. INCOME TAXES (Tables)	12 Months Ended
	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Deferred tax assets	2017 2016 U.S. operations loss carry forward and state at statutory rate of 40% $ 7,154,699 $ 6,704,362 Less valuation allowance 7,154,699 (6,704,362 ) Net deferred tax assets - - Change in valuation allowance $ 7,154,699 $ (6,704,362 )
Income tax reconciliation	2017 2016 Federal statutory rate -34.0 % -34.0 % State income tax rate -6.0 % -6.0 % Change in valuation allowance 40.0 % 40.0 % Effective tax rate 0.0 % 0.0 %

3. SIGNIFICANT ACCOUNTING POL30

3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS (Details Narrative) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Notes to Financial Statements
Accumulated deficit	$ (129,731,305)	$ (124,410,332)
Inventory reserve	$ 20,000	$ 20,000

5. INVENTORY (Details)

5. INVENTORY (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Notes to Financial Statements
Raw materials	$ 110,000	$ 0
Finished goods	375,678	438,453
Inventory reserve	(20,000)	(20,000)
Total inventory	$ 465,678	$ 418,453

6. PROPERTY AND EQUIPMENT (Deta

6. PROPERTY AND EQUIPMENT (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Property, Plant and Equipment [Abstract]
Machines and equipment	$ 365,861	$ 63,172
Furniture and fixtures	49,787	49,787
Computer equipment	52,304	52,304
Leasehold improvements	56,965	56,965
Total property and equipment	524,917	222,228
Less accumulated depreciation and amortization	(222,228)	(220,338)
Net property and equipment	$ 302,689	$ 1,890

7. CONVERTIBLE NOTES PAYABLE,33

7. CONVERTIBLE NOTES PAYABLE, NET (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
6% Secured convertible note (2014)
Principal amount due	$ 39,251	$ 330,295
Accrued Interest	1,974	3,692
Debt discount	0	0
Long-term convertible notes payable	41,225	333,987
7% Convertible Notes (850,000)
Principal amount due	250,000	250,000
Accrued Interest	321,652	164,137
Debt discount	0	0
Long-term convertible notes payable	571,652	414,137
Replacement debenture with TCA ($2,830,210)
Principal amount due	0	1,468,009
Accrued Interest	0	18,350
Debt discount	0	0
Long-term convertible notes payable	0	1,486,359
10% OID Convertible Promissory Note with Chicago Venture Partners, L.P.
Principal amount due	2,980,199	683,042
Accrued Interest	120,492	2,670
Debt discount	(698,547)	(121,395)
Long-term convertible notes payable	2,402,144	564,317
Total Long term convertible Debt Member
Principal amount due	3,269,450	2,731,346
Accrued Interest	444,118	188,849
Debt discount	(698,547)	(121,395)
Long-term convertible notes payable	$ 3,015,021	$ 2,798,800

7. DERIVATIVE LIABILITY (Detail

7. DERIVATIVE LIABILITY (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Derivative Instruments - Warrants	$ 2,660,167	$ 2,701,559
Derivative liability	2,660,167	2,701,559
Level 1
Derivative Instruments - Warrants	0	0
Derivative liability	0	0
Level 2
Derivative Instruments - Warrants	2,660,167	2,701,559
Derivative liability	2,660,167	2,701,559
Level 3
Derivative Instruments - Warrants	0	0
Derivative liability	$ 0	$ 0

10. EQUITY (Details)

10. EQUITY (Details) - Warrant [Member]	12 Months Ended
	Dec. 31, 2017$ / sharesshares
Shares
Outstanding-beginning of year (in shares)	595,000,000
Issued	0
Exercised	0
Forfeited	0
Expired	0
Outstanding at end of year	595,000,000
Exerciseable at end of year	585,000,000
Weighted Average Exercise Price
Outstanding-beginning | $ / shares	$ 0.031
Outstanding at end of year | $ / shares	$ 0.031

10. EQUITY - Price Range (Detai

10. EQUITY - Price Range (Details)	12 Months Ended
	Dec. 31, 2017$ / sharesshares
Price range 1
Outstanding at end of year | shares	540,000,000
Weighted average remaining life	1 year 3 months 11 days
Outstanding at end of year | $ / shares	$ 0.033
Exerciseable at end of year | shares	540,000,000
Weighted average exercise price exercisable | $ / shares	$ 0.033
Price range 2
Outstanding at end of year | shares	55,000,000
Weighted average remaining life	2 years 6 months 18 days
Outstanding at end of year | $ / shares	$ 0.010
Exerciseable at end of year | shares	45,000,000
Weighted average exercise price exercisable | $ / shares	$ 0.010
Warrant [Member]
Outstanding at end of year | shares	595,000,000
Weighted average remaining life	1 year 3 months 25 days
Outstanding at end of year | $ / shares	$ 0.031
Exerciseable at end of year | shares	585,000,000
Weighted average exercise price exercisable | $ / shares	$ 0.031

11. STOCK OPTIONS (Details)

11. STOCK OPTIONS (Details) - Options - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Shares
Outstanding-beginning of year (in shares)	12,010,000	29,020,000
Granted	44,000,000	0
Exercised	0	0
Forfeitures	(10,000)	(17,010,000)
Outstanding-end of year (in shares)	56,000,000	12,010,000
Weighted Average Exercise Price
Outstanding-beginning	$ 0.001	$ 0.028
Granted	0.006	0
Exercised	0	0
Forfeitures	0	(0.041)
Outstanding at end of year	$ 0.007	$ 0.001
Aggregate Intrinsic Value
Outstanding-beginning of year (in dollars)	$ 120,500	$ 811,000
Granted	280,000	0
Exercised	0	0
Forfeitures	(500)	(690,500)
Outstanding-end of year (in dollars)	$ 400,000	$ 120,500

11 STOCK OPTIONS - Price range

11 STOCK OPTIONS - Price range (Details)	12 Months Ended
	Dec. 31, 2017$ / sharesshares
Price 0.006
Outstanding-end of year (in shares) | shares	32,000,000
Weighted average remaining life in years	4 years 9 months
Outstanding at end of year | $ / shares	$ 0.006
Exerciseable at end of year | shares	12,500,000
Weighted average exercise price exercisable | $ / shares	$ 0.006
Price 0.007
Outstanding-end of year (in shares) | shares	10,000,000
Weighted average remaining life in years	4 years 9 months
Outstanding at end of year | $ / shares	$ 0.007
Exerciseable at end of year | shares	1,391,666
Weighted average exercise price exercisable | $ / shares	$ 0.007
Price 0.009
Outstanding-end of year (in shares) | shares	2,000,000
Weighted average remaining life in years	2 years 6 months
Outstanding at end of year | $ / shares	$ 0.009
Exerciseable at end of year | shares	333,333
Weighted average exercise price exercisable | $ / shares	$ 0.009
Price 0.01
Outstanding-end of year (in shares) | shares	12,000,000
Weighted average remaining life in years	1 year 10 months 17 days
Outstanding at end of year | $ / shares	$ 0.010
Exerciseable at end of year | shares	12,000,000
Weighted average exercise price exercisable | $ / shares	$ 0.010
Options
Outstanding-end of year (in shares) | shares	56,000,000
Weighted average remaining life in years	4 years 22 days
Outstanding at end of year | $ / shares	$ 0.007
Exerciseable at end of year | shares	26,225,000
Weighted average exercise price exercisable | $ / shares	$ 0.008

12. COMMITMENTS, CONTINGENCIE39

12. COMMITMENTS, CONTINGENCIES AND LEGAL PROCEEDINGS (Details)	Dec. 31, 2017USD ($)
Commitments And Contingencies Details
2,018	$ 319,962
2,019	174,615
2,020	61,668
2,021	0
2,022	0
Beyond	0
Total	$ 556,245

13. INCOME TAXES - Deferred tax

13. INCOME TAXES - Deferred tax asset (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Deferred tax assets:
U.S. operations loss carry forward and state at statutory rate of 40%	$ 7,154,699	$ 6,584,821
Less valuation allowance	(7,154,699)	(6,584,821)
Net deferred tax asset	0	0
Change in valuation allowance	$ (7,154,699)	$ (6,584,821)

13. INCOME TAX - Rate reconcili

13. INCOME TAX - Rate reconciliation (Details)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Income Tax Details
Federal statutory rate	(34.00%)	(34.00%)
State income tax rate	(6.00%)	(6.00%)
Change in valuation allowance	40.00%	40.00%
Total	0.00%	0.00%

13. INCOME TAXES (Details Narra

13. INCOME TAXES (Details Narrative)	12 Months Ended
	Dec. 31, 2017USD ($)
Income Taxes Details Narrative
Net operating loss carryforwards	$ 18,000,000
Net operating loss carryforwards expiration	The Company has net operating loss carryforwards of approximately $18,000,000, which expire in 2021-2031.