Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Apr. 14, 2014 | Jun. 30, 2013 | |
Document And Entity Information | ' | ' | ' |
Entity Registrant Name | 'EAST COAST DIVERSIFIED CORP | ' | ' |
Entity Central Index Key | '0001256540 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' | ' |
Is Entity a Voluntary Filer? | 'No | ' | ' |
Is Entity's Reporting Status Current? | 'Yes | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 8,273,257,071 | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Entity public float | ' | ' | $65,337 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
ASSETS | ' | ' |
Cash | $241 | $0 |
Accounts receivable, net | 41 | 200,040 |
Inventory | 251,576 | 108,777 |
Prepaid license fees | 200,000 | 200,000 |
Prepaid expenses | 13,945 | 15,818 |
Assets attributable to disputed subsidiary | 107,271 | 107,271 |
Total current assets | 573,074 | 631,906 |
Property and equipment, net | 3,540 | 7,401 |
Other assets | ' | ' |
Prepaid license fees | 37,500 | 87,500 |
Security deposits | 20,000 | 20,000 |
Total other assets | 57,500 | 107,500 |
Total assets | 634,114 | 746,807 |
Current liabilities | ' | ' |
Bank overdraft | 1,889 | 6,028 |
Loans payable, current | 680,795 | 404,761 |
Loans payable - related party, current | 601,348 | 539,909 |
Due to related party | 10,120 | 64,673 |
Accounts payable and accrued expenses | 628,970 | 508,940 |
Accrued payroll and related liabilities | 2,371,656 | 1,938,279 |
Liabilities attributable to disputed subsidiary | 11,116 | 11,116 |
Total current liabilities | 4,305,894 | 3,473,706 |
Other liabilities | ' | ' |
Loans payable - related parties, non-current | 72,349 | 0 |
Total liabilities | 4,378,243 | 3,473,706 |
Contingent acquisition liabilities | 1,081,850 | 1,104,973 |
Amounts payable in common stock | 121,225 | 294,955 |
Derivative liability | 65,275 | 158,822 |
Common stock, $0.001 par value, 5,900,000,000 and 5,900,000,000 shares authorized, 2,221,746,925 and 7,198,321 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively | 2,221,747 | 7,198 |
Additional paid-in capital | 14,949,524 | 15,930,510 |
Preferred stock issuable | 119,000 | 0 |
Common stock issuable | 4,500 | 0 |
Preferred stock subscriptions receivable | -1,113,498 | -1,155,998 |
Accumulated deficit | -21,096,462 | -18,812,108 |
Total East Coast Diversified stockholders' deficit | -4,629,700 | -3,927,034 |
Noncontrolling interest | -382,779 | -358,615 |
Total stockholders' deficit | -5,012,479 | -4,285,649 |
Total liabilities and stockholders' deficit | 634,114 | 746,807 |
Series A Preferred Stock [Member] | ' | ' |
Other liabilities | ' | ' |
Preferred stock | 285,487 | 103,362 |
Series B Preferred Stock [Member] | ' | ' |
Other liabilities | ' | ' |
Preferred stock | $2 | $2 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Preferred stock par value | $0.00 | $0.00 |
Common stock par value | $0.00 | $0.00 |
Common stock shares authorized | 5,900,000,000 | 5,900,000,000 |
Common stock shares issued | 2,221,746,925 | 7,198,321 |
Common stock shares oustanding | 2,221,746,925 | 7,198,321 |
Series A Preferred Stock [Member] | ' | ' |
Preferred stock shares authorized | 400,000,000 | 400,000,000 |
Preferred stock shares issued | 285,487,091 | 103,361,855 |
Preferred stock shares outstanding | 285,487,091 | 103,361,855 |
Series B Preferred Stock [Member] | ' | ' |
Preferred stock shares issued | 5 | 5 |
Preferred stock shares outstanding | 5 | 5 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Revenues: | ' | ' |
Product sales | $157,370 | $528,397 |
Consulting and development | 0 | 151,920 |
User fees | 22,901 | 35,669 |
Total revenues | 180,271 | 715,986 |
Product sales | 102,432 | 334,537 |
Consulting and development | 0 | 0 |
User fees | 24,993 | 62,648 |
Selling, general and administative expense | 1,939,762 | 3,290,204 |
Total operating expenses | 2,067,187 | 3,687,389 |
Loss from operations | -1,886,916 | -2,971,403 |
Other income (expense) | ' | ' |
Other income | 0 | 37,616 |
Interest expense | -571,150 | -903,737 |
Gain on settlement of debt | 0 | 141,141 |
Loss on conversion of debt | 0 | -575,263 |
Change in derivative liability | 154,277 | -12,099 |
Loss on disposal of fixed assets | -4,729 | 0 |
Total other income (expense) | -421,602 | -1,312,342 |
Net loss | -2,308,518 | -4,283,745 |
Net loss attributable to noncontrolling interests | 24,164 | 99,809 |
Net loss from non-disputed operations | -2,284,354 | -4,183,936 |
Net income (loss) from disputed subsidiary | 0 | -1,565,577 |
Net loss attributable to East Coast Diversified Corporation | ($2,284,354) | ($5,749,513) |
Net loss per share - basic and diluted | $0 | ($2.44) |
Weighted average number of shares outsanding during the period - basic and diluted (in Shares) | 639,331,737 | 2,353,269 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Consolidated Statements Of Cash Flows | ' | ' |
Net loss | ($2,284,354) | ($5,749,513) |
Noncontrolling interests | -24,164 | -99,809 |
Depreciation and amortization | 3,861 | 15,977 |
Provision for doubtful accounts | 0 | 604,735 |
Amortization of intangibles of disputed subsidiary | 0 | 114,750 |
Issuance of loan payable for consulting services | 78,922 | 105,000 |
Stock issued for services and compensation | 12,900 | 252,205 |
Amortization of prepaid license fee | 50,000 | 50,000 |
Amortization of payment redemption premium as interest | 0 | 12,076 |
Gain on recovery of redemption premiums | 0 | -28,975 |
Gain on settlement of loans payable | 0 | -38,646 |
Gain on settlement of accounts payable | 0 | -102,495 |
Loss on conversion of debt | 0 | 575,263 |
Change in derivative liability | -154,277 | 12,099 |
Impairment of intangible assets of disputed subsidiary | 0 | 624,750 |
Impairment of goodwill of disputed subsidiary | 0 | 742,107 |
Accretion of beneficial conversion feature on convertible notes payable as interest | 486,696 | 794,135 |
Accretion of stock discounts to comvertible notes payable as interest | 0 | 2,160 |
Interest accrued on loans payable | 81,208 | 126,284 |
Assets attributable to disputed subsidiary | 0 | -2,527 |
Liabilities attributable to disputed subsidiary | 0 | -13,884 |
Accounts receivable, net | 199,999 | -575,204 |
Inventory | -142,799 | -75,254 |
Prepaid expenses | 1,873 | -14,818 |
Security deposits | 0 | -15,479 |
Escrow deposits | 0 | 3,462 |
Bank overdraft, net | -4,139 | -10,647 |
Due to related party | -54,553 | -85,327 |
Accounts payable and accrued expenses | 120,030 | 741,791 |
Accrued payroll and related liabilities | 723,878 | 546,327 |
Net cash used in operating activities | -904,919 | -1,489,457 |
Net cash used in investing activities | 0 | 0 |
Proceeds from issuance of common stock | 32,000 | 56,000 |
Proceeds from common stock subscriptions | 4,500 | 0 |
Repurchase of common stock | -5,000 | 0 |
Proceeds from issuance of preferred stock | 184,000 | 197,900 |
Proceeds from preferred stock subscription | 161,500 | 344,002 |
Repurchase of preferred stock | -5,000 | 0 |
Proceeds from loans payable | 281,000 | 851,711 |
Proceeds from loans payable - related party | 257,160 | 56,500 |
Repayments of loans payable | -5,000 | -12,600 |
Repayments of loans payable - related party | 0 | -5,000 |
Net cash from financing activities | 905,160 | 1,488,513 |
Net increase (decrease) in cash | 241 | -944 |
Cash at beginning of period | 0 | 944 |
Cash at end of period | 241 | 0 |
Cash paid for interest | 3,246 | 2,576 |
Cash paid for taxes | 0 | 0 |
Non-cash investing and financing activities: | ' | ' |
Issuance of 1,975,718,232 and 3,693,754 shares of common stock in conversion of loans payable, respectively | 257,267 | 875,433 |
Issuance of 1,000,000 shares of series A preferred stock in conversion of loans payable | 0 | 57,000 |
Issuance of 28,833,333 and 18,842,898 shares of series A preferred stock in conversion of loans payable - related party, respectively | 140,000 | 157,500 |
Payment redemption premiums on convertible notes payable | 0 | 10,000 |
Loans and accounts payable converted to Amounts payable in common stock | 0 | 1,068,345 |
Issuance of 101,300,000 and 1,610,400 shares of common stock in settlement of loans and accounts payable converted to Amounts payable in common stock, respectively | 113,000 | 1,201,930 |
Issuance of 4,324,515 shares of Series A preferred stock to related parties in conversion of 172,981 shares of common stock | 0 | 86,490 |
Issuance of 372,000 shares of Series A preferred stock to third parties in conversion of 14,880 shares of common stock | 0 | 7,440 |
Issuance of 3,000 shares of series B preferred stock under stock subscription | 0 | 1,500,000 |
Beneficial conversion feature of convertible notes payable | 372,897 | 924,007 |
Discount for stock issued in connection with issuance of note payable | 0 | 2,160 |
Issuance of 15,000 shares of common stock in conversion of accrued salaries | 0 | 630 |
Issuance of 100,833,333 and 47,491,497 shares of series A preferred stock in conversion of accrued salaries, respectively | 290,500 | 325,000 |
Prepaid license fee accrued as due to related party | 0 | 150,000 |
Reduction of acquisition liabilities due to conversion of 39,050 shares of Series A preferred stock to 6,219,000 shares of common stock | $23,124 | $0 |
Consolidated_Statements_of_Cas1
Consolidated Statements of Cash Flows (Parenthetical) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Consolidated Statements Of Cash Flows Parenthetical | ' | ' |
Issuance of common stock in conversion of loans payable | 1,975,718,232 | 3,693,754 |
Issuance of shares of series A preferred stock in conversion of loans payable | ' | 1,000,000 |
Issuance of shares of series A preferred stock in conversion of loans payable - related party | 28,833,333 | 18,842,898 |
Issuance of shares of common stock in settlement of loans and accounts payable converted to Amounts payable in common stock | 101,300,000 | 1,610,400 |
Issuance of shares of Series A preferred stock to related parties in conversion of shares of common stock | 0 | 4,324,515 |
Issuance of shares of Series A preferred stock to third parties in conversion of shares of common stock | ' | 372,000 |
Issuance of shares of series B preferred stock under stock subscription | ' | 3,000 |
Issuance of shares of common stock in conversion of accrued salaries | ' | 15,000 |
Issuance of shares of series A preferred stock in conversion of accrued salaries | 100,833,333 | 47,491,497 |
Reduction of acquisition liabilities due to conversion of shares of Series A preferred stock | 39,050 | ' |
Reduction of acquisition liabilities due to conversion of shares of common stock | 6,219,000 | ' |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders Equity / Deficit (USD $) | Preferred Stock | SeriesBMember | Common Stock [Member] | Additional Paid-In Capital | Preferred stock issuable | Common stock issuable | Stock Subscription Receivable | Retained Earnings | Noncontrolling Interest | Total |
Balance at Dec. 31, 2011 | $21,028 | ' | $580 | $10,469,699 | $0 | $0 | ' | ($13,062,595) | ($258,806) | ($2,830,094) |
Balance (in Shares) at Dec. 31, 2011 | 10,513,813 | ' | 579,791 | ' | ' | ' | ' | ' | ' | ' |
Common shares issued for cash | ' | ' | 834 | 55,166 | ' | ' | ' | ' | ' | ' |
Common shares issued for cash (in Shares) | ' | ' | 833,833 | ' | ' | ' | ' | ' | ' | ' |
Preferred shares issued for cash | 21,256 | ' | ' | 176,644 | ' | ' | ' | ' | ' | 197,900 |
Preferred shares issued for cash (in Shares) | 21,256,384 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred shares issued for conversion of loans payable - related party | 18,843 | ' | ' | 138,657 | ' | ' | ' | ' | ' | 157,500 |
Preferred shares issued for conversion of loans payable - related party (in Shares) | 18,842,898 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common shares issued for conversion of loans payable | ' | ' | 3,693 | 871,740 | ' | ' | ' | ' | ' | 875,433 |
Common shares issued for conversion of loans payable (in Shares) | ' | ' | 3,693,754 | ' | ' | ' | ' | ' | ' | ' |
Value of beneficial conversion feature of convertible notes payable | ' | ' | ' | 924,007 | ' | ' | ' | ' | ' | 924,007 |
Common shares issued for services | ' | ' | 30 | 82,175 | ' | ' | ' | ' | ' | 82,205 |
Common shares issued for services (in Shares) | ' | ' | 29,638 | ' | ' | ' | ' | ' | ' | ' |
Preferred shares issued for services | 608 | ' | ' | 169,392 | ' | ' | ' | ' | ' | 170,000 |
Preferred shares issued for services (in Shares) | 607,487 | 613 | ' | ' | ' | ' | ' | ' | ' | ' |
Change in par value of preferred stock | -10,514 | ' | ' | 10,514 | ' | ' | ' | ' | ' | ' |
Preferred shares subscribed | ' | 2 | ' | 1,499,998 | ' | ' | -1,500,000 | ' | ' | ' |
Preferred shares subscribed (in Shares) | ' | 1,500 | ' | ' | ' | ' | ' | ' | ' | ' |
Stock subscriptions paid in cash | ' | ' | ' | ' | ' | ' | 344,002 | 344,002 | ' | ' |
Preferred shares issued for conversion of loans payable | 1,000 | ' | ' | 56,000 | ' | ' | ' | ' | ' | 57,000 |
Preferred shares issued for conversion of loans payable (Shares) | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common shares issued for conversion of accrued salaries | ' | ' | 15 | 615 | ' | ' | ' | ' | ' | 630 |
Common shares issued for conversion of accrued salaries (Shares) | ' | ' | 15,000 | ' | ' | ' | ' | ' | ' | ' |
Preferred shares issued for conversion of accrued salaries | 47,491 | ' | ' | 277,509 | ' | ' | ' | ' | ' | 325,000 |
Preferred shares issued for conversion of accrued salaries (Shares) | 47,491,497 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common shares issued in extinguishment of loans payable and account payable | ' | ' | 1,611 | 1,200,319 | ' | ' | ' | ' | ' | 1,201,930 |
Common shares issued in extinguishment of loans payable and account payable (in Shares) | ' | ' | 1,610,400 | ' | ' | ' | ' | ' | ' | ' |
Common shares issued in conjunction with loans payable | ' | ' | 1 | 2,159 | ' | ' | ' | ' | ' | 2,160 |
Common shares issued in conjunction with loans payable (in Shares) | ' | ' | 1,200 | ' | ' | ' | ' | ' | ' | ' |
Conversion of common stock to preferred stock by related parties | 4,325 | ' | -173 | -4,152 | ' | ' | ' | ' | ' | ' |
Conversion of common stock to preferred stock by related parties (in Shares) | 4,324,515 | ' | -172,981 | ' | ' | ' | ' | ' | ' | ' |
Conversion of common stock to preferred stock by third parties | 372 | ' | -15 | -357 | ' | ' | ' | ' | ' | ' |
Conversion of common stock to preferred stock by third parties (in Shares) | 372,000 | ' | -14,880 | ' | ' | ' | ' | ' | ' | ' |
Conversion of preferred stock to common stock by third parties | -1,047 | ' | 622 | 425 | ' | ' | ' | ' | ' | ' |
Conversion of preferred stock to common stock by third parties (in Shares) | -1,046,739 | 56 | 622,566 | ' | ' | ' | ' | ' | ' | ' |
Net loss | ' | ' | ' | ' | ' | ' | ' | -5,749,513 | -99,809 | -5,849,322 |
Balance at Dec. 31, 2012 | 103,362 | 2 | 7,198 | 15,930,510 | 0 | 0 | -1,155,998 | -18,812,108 | -358,615 | -4,285,649 |
Balance (in Shares) at Dec. 31, 2012 | 103,361,855 | 2,169 | 7,198,321 | ' | ' | ' | ' | ' | ' | ' |
Common shares issued for cash | ' | ' | 130,000 | -98,000 | ' | ' | ' | ' | ' | 32,000 |
Common shares issued for cash (in Shares) | ' | ' | 130,000,000 | ' | ' | ' | ' | ' | ' | ' |
Preferred shares issued for cash | 54,209 | ' | ' | 129,791 | ' | ' | ' | ' | ' | 184,000 |
Preferred shares issued for cash (in Shares) | 54,208,334 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common shares issued for conversion of loans payable - related party | ' | ' | 1,975,718 | -1,718,451 | ' | ' | ' | ' | ' | 257,267 |
Common shares issued for conversion of loans payable - related party (in Shares) | ' | ' | 1,975,718,232 | ' | ' | ' | ' | ' | ' | ' |
Common shares issued for conversion of loans payable (in Shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,219,000 |
Value of beneficial conversion feature of convertible notes payable | ' | ' | ' | 372,897 | ' | ' | ' | ' | ' | 372,897 |
Common shares issued for services | ' | ' | 1,319 | 11,581 | ' | ' | ' | ' | ' | 12,900 |
Common shares issued for services (in Shares) | ' | ' | 1,319,444 | ' | ' | ' | ' | ' | ' | ' |
Stock subscriptions paid in cash | ' | ' | ' | ' | ' | ' | 42,500 | ' | ' | 42,500 |
Preferred shares issued for conversion of loans payable | 28,333 | ' | ' | 111,667 | ' | ' | ' | ' | ' | 140,000 |
Preferred shares issued for conversion of loans payable (Shares) | 28,333,333 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred shares issued for conversion of accrued salaries | 100,833 | ' | ' | 189,667 | ' | ' | ' | ' | ' | 290,500 |
Preferred shares issued for conversion of accrued salaries (Shares) | 100,833,333 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion of common stock to preferred stock by third parties | 164 | ' | -6 | -158 | ' | ' | ' | ' | ' | ' |
Conversion of common stock to preferred stock by third parties (in Shares) | 164,286 | ' | -6,572 | ' | ' | ' | ' | ' | ' | ' |
Conversion of preferred stock to common stock by third parties | -39 | ' | 6,219 | 16,944 | ' | ' | ' | ' | ' | 23,124 |
Conversion of preferred stock to common stock by third parties (in Shares) | -39,050 | ' | 6,219,000 | ' | ' | ' | ' | ' | ' | ' |
Common shares repurchased and cancelled, shares | ' | ' | -1,500 | ' | ' | ' | ' | ' | ' | ' |
Common shares repurchased and cancelled, amount | ' | ' | -1 | -4,999 | ' | ' | ' | ' | ' | -5,000 |
Preferred shares issuable for cash | ' | ' | ' | ' | 119,000 | ' | ' | ' | ' | 119,000 |
Preferred shares repurchased and cancelled, amount | -1,375 | ' | ' | -3,625 | ' | ' | ' | ' | ' | -5,000 |
Preferred shares repurchased and cancelled, shares | -1,375,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common shares issuable for cash | ' | ' | ' | ' | ' | 4,500 | ' | ' | ' | 4,500 |
Common shares issued for conversion of amounts due in common stock, amount | ' | ' | 101,300 | 11,700 | ' | ' | ' | ' | ' | 113,000 |
Common shares issued for conversion of amounts due in common stock, shares | ' | ' | 101,300,000 | ' | ' | ' | ' | ' | ' | ' |
Net loss | ' | ' | ' | ' | ' | ' | ' | -2,284,354 | -24,164 | -2,308,518 |
Balance at Dec. 31, 2013 | $285,487 | $2 | $2,221,747 | $14,949,524 | $119,000 | $4,500 | ($1,113,498) | ($21,096,462) | ($382,779) | ($5,012,479) |
Balance (in Shares) at Dec. 31, 2013 | 285,487,091 | 2,169 | 2,221,746,925 | ' | ' | ' | ' | ' | ' | ' |
1_Nature_of_Business_Presentat
1. Nature of Business, Presentation, and Going Concern | 12 Months Ended |
Dec. 31, 2013 | |
Nature Of Business Presentation And Going Concern | ' |
1. Nature of Business, Presentation, and Going Concern | ' |
Organization | |
EarthSearch Communications International, Inc. (“EarthSearch”) was founded in November 2003 as a Georgia corporation. The company subsequently re-incorporated in Delaware on July 8, 2005. | |
On December 18, 2009, East Coast Diversified Corporation's (“ECDC” or the “Company”) former principal stockholders, Frank Rovito, Aaron Goldstein and Green Energy Partners, LLC (collectively the “Sellers”), entered into a Securities Purchase Agreement (the "Purchase Agreement") with Kayode Aladesuyi (the “Buyer”), pursuant to which the Sellers beneficial owners of an aggregate of 6,997,150 shares of the Company's common stock (the “Sellers' Shares”), agreed to sell and transfer the Sellers' Shares to the Buyer for an aggregate of Three Hundred Thousand Dollars ($300,000.00). The Purchase Agreement also provided that the Company would enter into a share exchange agreement with EarthSearch. | |
On January 15, 2010, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with EarthSearch, pursuant to which the Company agreed to issue 35,000,000 shares of the Company's restricted common stock to the shareholders of EarthSearch. On April 2, 2010, EarthSearch consummated all obligations under the Share Exchange Agreement. In accordance with the terms and provisions of the Share Exchange Agreement, the Company acquired 93.49% of the issued and outstanding common stock of EarthSearch. As a result of the Purchase Agreement and Share Exchange Agreement, our principal business became the business of EarthSearch. The Board of Directors of the Company (the “Board”) passed a resolution electing the new members of the Board and appointing new management of the Company and effectively resigning as their last order of business. | |
The Share Exchange was accounted for us as an acquisition and recapitalization. EarthSearch is the acquirer for accounting purposes and, consequently, the assets and liabilities and the historical operations that are reflected in the consolidated financial statements herein are those of EarthSearch. The accumulated deficit of EarthSearch was also carried forward after the acquisition. | |
On December 31, 2011, the Company acquired 1,800,000 additional shares of EarthSearch from a non-controlling shareholder in exchange for 439,024 shares of the Company's common stock. As of December 31, 2011, the Company owns 94.66% of the issued and outstanding stock of EarthSearch. | |
On October 23, 2011, the Company entered into a Share Exchange Agreement (the “RP Share Exchange Agreement”) with Rogue Paper, Inc., a California corporation (“Rogue Paper”), and shareholders of Rogue Paper (the “Rogue Paper Holders”). Rogue Paper is headquartered in San Francisco, California and is a developer of mobile and branded applications for major media enterprises. The Company acquired fifty-one percent (51%) of the issued and outstanding common stock of Rogue Paper in exchange for 2,500,000 shares of the Company’s Series A convertible preferred stock (the “Series A Preferred”). | |
Pursuant to the RP Share Exchange Agreement, no sooner than twelve months from the Effective Date, the Series A Preferred shares shall be convertible, at the option of the holder of such shares, into an aggregate of fifty million shares of the Company’s common stock, par value $0.001 per share. Beginning sixth months from the Effective Date, both the Company and holders of the Series A Preferred shares shall have the option to redeem any portion of such holders’ Series A Preferred shares, for cash, at a price of sixty cents ($0.60) per share. Additionally, commencing twenty-four (24) months from the Effective Date, the holders of the remaining, unsold shares of Rogue Paper common stock may require the Company to redeem such shares, for cash, at a price of three cents ($0.03) per share. During the fourth quarter of 2012, the management of Rogue Paper effectively shut-down operations, denied the Company access to financial records, refused to participate in shareholder or management meetings and all members of Rogue Paper management resigned January 25, 2013. No legal action has been taken by either Rogue Paper or the Company. As financial records have not been available since September 30, 2012, the Company has treated the balance sheets and results of operations of Rogue Paper as a discontinued operation. | |
On January, 12, 2012, StudentConnect Inc., a Georgia corporation, was formed as a subsidiary of the Company. | |
On July, 4, 2012, WetWinds Inc., a Georgia corporation, was formed as a subsidiary of the Company. | |
Nature of Operations | |
The Company is a holding company for several subsidiaries offering products and services in several areas of technology. EarthSearch Communications is a Logistics and Asset Management Company. The Company has created an integration of Radio Frequency Identification Technology (“RFID”) and GPS technology and is an international provider of supply chain management solutions offering real-time visibility in the supply chain with integrated RFID/GPS and other telemetry products. These solutions help businesses worldwide to increase asset management, provide safety and security, increase productivity, and deliver real-time visibility of the supply chain through automation. | |
StudentConnect provides school transportation technology that would allow parents to receive real time notification about the status of their children. The company utilizes wireless communication between GPS and RFID to provide these services. The product is provided to schools and parents at zero cost. The Company’s business model allows it to charge business advertisers who sponsor alerts and messages to parents receiving the messages. | |
Wetwinds launched Vir2o, its social media platform, on April 5, 2012, and has commenced marketing of the platform to users globally. The Company offers users a Community Newsfeed, messaging module, Profile Wall and private rooms to share content with friends and families. Each user will have their own private photo, music, movie, game ecommerce rooms. Users can privately or publicly share content in these rooms with their friends and family. We also provide the interactive “JoinMe” technology that allows users and friends to engage in meaningful social activities online. All of our revenue from Vir2o will be advertisement driven. | |
Rogue Paper, Inc. (“Rogue Paper”), the Company’s majority owned subsidiary, offered second screen technology to media organizations and businesses. During the fourth quarter of 2012, the management of Rogue Paper effectively shut-down operations, denied the Company access to financial records, refused to participate in shareholder or management meetings and all members of Rogue Paper management resigned January 25, 2013. No legal action has been taken by either Rogue Paper or the Company. As current financial records are not available since September 30, 2012, the Company has treated the balance sheets and results of operations of Rogue Paper in the same manner as a discontinued operation. | |
Basis of Presentation | |
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the Securities and Exchange Commission (“SEC”). | |
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. As reflected in the accompanying consolidated financial statements, the Company had an accumulated deficit of $21,096,462 at December 31, 2013, a net loss and net cash used in operations of $2,284,354 and $904,919, respectively, for the year ended December 31, 2013. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. | |
The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan, generate revenues, and continue to raise additional investment capital. No assurance can be given that the Company will be successful in these efforts. | |
The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Management believes that actions presently being taken to obtain additional funding and implement its strategic plans will afford the Company the opportunity to continue as a going concern. |
2_Summary_of_Significant_Accou
2. Summary of Significant Accounting Policies | 12 Months Ended | ||
Dec. 31, 2013 | |||
Accounting Policies [Abstract] | ' | ||
2. Summary of Significant Accounting Policies | ' | ||
Use of Estimates | |||
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates in the accompanying consolidated financial statements include the amortization period for intangible assets, impairment valuation of intangible assets, depreciable lives of the website and property and equipment, valuation of share-based payments and the valuation allowance on deferred tax assets. Actual results could differ from those estimates and would impact future results of operations and cash flows. | |||
Principles of Consolidation | |||
The consolidated financial statements include the accounts of East Coast Diversified Corporation and its majority-owned subsidiary, EarthSearch Communications International, Inc., and its wholly-owned subsidiaries StudentConnect Inc. and WetWinds Inc. Due to the dispute with the management of Rogue Paper, the balances and results of operations of Rogue Paper, Inc. as of and for the nine months ended September 30, 2012 are presented in the consolidated financial statements in the manner of a discontinued operation as of and for the years ended December 31, 2013 and 2012. All significant inter-company balances and transactions have been eliminated in consolidation. | |||
Cash and Cash Equivalents | |||
The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At December 31, 2013 and 2011, respectively, the Company had no cash equivalents. | |||
Concentration of Credit Risk | |||
The Company grants unsecured credit to commercial and governmental customers in the United States and abroad. Accounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts. As of December 31, 2012, two customers account for 79% of the total accounts receivable. | |||
The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance based on historical write-off experience, customer specific facts and economic conditions. Bad debt expense was $3,296 and $604,735 for the years ended December 31, 2013 and 2012, respectively. At December 31, 2013 and 2012, the allowance for doubtful accounts was $nil and $604,735, respectively. | |||
Outstanding account balances are reviewed individually for collectability. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance sheet credit exposure to its customers. | |||
Inventories | |||
Inventories are stated at the lower of cost or market (“LCM”). The Company uses the first-in-first-out (“FIFO”) method of valuing inventory. Inventory consists primarily of finished goods and accessories for resale. | |||
Property and Equipment | |||
Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation of property and equipment is computed by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful lives ranging from 5 years to 7 years. Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statements of operations. Leasehold improvements are amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever is shorter. | |||
Depreciation expense was $3,861 and $6,704 for the years ended December 31, 2013 and 2012, respectively. | |||
Goodwill and other intangible assets | |||
Goodwill represents the excess of acquisition consideration paid over the fair value of identifiable net tangible and identifiable intangible assets acquired. Goodwill and other indefinite-lived intangible assets are not amortized, but are reviewed for impairment at least annually, in the fourth quarter, or earlier upon the occurrence of certain triggering events. | |||
Goodwill is allocated among and evaluated for impairment at the reporting unit level. Management evaluates goodwill for impairment using a two-step process provided by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350, Intangibles — Goodwill and Other. The first step is to compare the fair value of each of our reporting units to their respective book values, including goodwill. If the fair value of a reporting unit exceeds its book value, reporting unit goodwill is not considered impaired and the second step of the impairment test is not required. If the book value of a reporting unit exceeds its fair value, the second step of the impairment test is performed to measure the amount of impairment loss, if any. The second step of the impairment test compares the implied fair value of the reporting unit’s goodwill with the book value of that goodwill. If the book value of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. Intangible assets with determinable useful lives are amortized using the straight-line method over the expected life of the assets. | |||
Amortization of intangible assets was $nil and $114,750 for the years ended December 31, 2013 and 2012, respectively. Due to the dispute with Rogue Paper, the Company has deemed that the unamortized balance of the intangible assets as of September 30, 2012 of $624,750 and the goodwill of $742,107 have been fully impaired and charged to expense as of December 31, 2012. | |||
Impairment or Disposal of Long-Lived Assets | |||
The Company accounts for the impairment or disposal of long-lived assets according to ASC 360 “Property, Plant and Equipment”. ASC 360 clarifies the accounting for the impairment of long-lived assets and for long-lived assets to be disposed of, including the disposal of business segments and major lines of business. Long-lived assets are reviewed when facts and circumstances indicate that the carrying value of the asset may not be recoverable. When necessary, impaired assets are written down to estimate fair value based on the best information available. Estimated fair value is generally based on either appraised value or measured by discounting estimated future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such estimates. | |||
Research and Development Costs | |||
The Company accounts for research and development costs in accordance with ASC 730 “Research and Development”. ASC 730 requires that research and development costs be charged to expense when incurred. Research and development costs charged to expense were $580,119 and $378,383 for the years ended December 31, 2013 and 2012, respectively. | |||
Prior to the adoption of ASC 730, costs incurred internally in researching and developing computer software products were charged to expense until technological feasibility has been established for the product. Once technological feasibility is established, all software costs are capitalized until the product is available for general release to customers. Judgment is required in determining when technological feasibility of a product is established. We have determined that technological feasibility for our software products is reached after all high-risk development issues have been resolved through coding and testing Generally, this occurs shortly before products which will utilize the software are released to manufacturing which occurred in January 2007. The amortization of these costs is included in general and administrative expense over the estimated life of the software, which is estimated to be 3 years. | |||
The Company capitalized no research and development costs during the years ended December 31, 2013 and 2012, respectively. The Company recorded amortization expense of $nil and $9,273 for the years ended December 31, 2013 and 2012, respectively. | |||
Fair Value of Financial Instruments | |||
FASB ASC 820, Fair Value Measurements and Disclosures, establishes a framework for measuring fair value and expands disclosures about fair value measurements. FASB ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820 states that a fair value measurement should be determined based on the assumptions the market participants would use in pricing the asset or liability. In addition, FASB ASC 820 specifies a hierarchy of valuation techniques based on whether the types of valuation information (“inputs”) are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. | |||
The three broad levels defined by FASB ASC 820 hierarchy are as follows: | |||
Level 1 – quoted prices for identical assets or liabilities in active markets. | |||
Level 2 – pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. | |||
Level 3 – valuations derived from methods in which one or more significant inputs or significant value drivers are unobservable in the markets. | |||
These financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment to estimation. Valuations based on unobservable inputs are highly subjective and require significant judgments. Changes in such judgments could have a material impact on fair value estimates. In addition, since estimates are as of a specific point in time, they are susceptible to material near-term changes. Changes in economic conditions may also dramatically affect the estimated fair values. | |||
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2012. The respective carrying value of certain financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accounts receivable, inventory, accounts payable and accrued expenses and accrued compensation. The fair value of the Company’s loans payable is estimated based on current rates that would be available for debt of similar terms which is not significantly different from its stated value. | |||
Revenue Recognition | |||
The Company generates revenue through three processes: (1) Sale of its RFID/GPS products, (2) Fees for consulting services provided to its customers, and (3) Service Fees for the use of its advanced web based asset management platform. | |||
· | Revenue for RFID/GPS products is recognized when shipments are made to customers. The Company recognizes a sale when the product has been shipped and risk of loss has passed to the customer. | ||
· | Revenue for consulting services is recognized when the services have been performed. | ||
· | Revenue for service fees is recognized ratably over the term of the use agreement. | ||
Stock-Based Compensation | |||
The Company accounts for Employee Stock-Based Compensation under ASC 718 “Compensation – Stock Compensation”, which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 is a revision to SFAS No. 123, “Accounting for Stock-Based Compensation”, and supersedes Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees”, and its related implementation guidance. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized. The Company has not granted any stock options as of December 31, 2013. | |||
The Company accounts for stock-based compensation awards to non-employees in accordance with ASC 505-50 “Equity-Based Payments to Non-Employees” (“ASC 505-50”). Under ASC 505-50, the Company determines the fair value of the warrants or stock-based compensation awards granted as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Any stock options issued to non-employees are recorded in expense and additional paid-in capital in shareholders' equity/(deficit) over the applicable service periods using variable accounting through the vesting dates based on the fair value of the options at the end of each period. | |||
Income Taxes | |||
Income taxes are accounted for under the liability method of accounting for income taxes. Under the liability method, future tax liabilities and assets are recognized for the estimated future tax consequences attributable to differences between the amounts reported in the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Future tax assets and liabilities are measured using enacted or substantially enacted income tax rates expected to apply when the asset is realized or the liability settled. The effect of a change in income tax rates on future income tax liabilities and assets is recognized in income in the period that the change occurs. Future income tax assets are recognized to the extent that they are considered more likely than not to be realized. | |||
The Financial Accounting Standards Board (FASB) has issued ASC 740 “Income Taxes” (formerly, Financial Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” – An Interpretation of FASB Statement No. 109 (FIN 48)). ASC 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with prior literature FASB Statement No. 109, Accounting for Income Taxes. This standard requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. | |||
As a result of the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by FASB ASC 740 and concluded that the tax position of the Company has not met the more-likely-than-not threshold as of December 31, 2013. | |||
Basic and Diluted Loss Per Share | |||
The Company computes income (loss) per share in accordance with ASC 260, “Earnings per Share”, which requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the statement of operations. Basic EPS is computed by dividing income (loss) available to common shareholders by the weighted average number of shares outstanding during the period. Diluted EPS gives effect to all dilutive potential shares of common stock outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. | |||
As of December 31, 2013 and 2012, there were $532,958 and $364,459, respectively, of convertible notes payable which are convertible at various conversion rates and 285,487,091 shares of convertible preferred stock which are convertible into 5,709,741,820 common shares. However, these potentially dilutive shares are considered to be anti-dilutive and are therefore not included in the calculation of net loss per share. | |||
Segment Information | |||
In accordance with the provisions of ASC 280-10, “Disclosures about Segments of an Enterprise and Related Information”, the Company is required to report financial and descriptive information about its reportable operating segments. The Company operates in only one operating segment as of December 31, 2013 |
3_Recent_Accounting_Pronouncem
3. Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2013 | |
Accounting Changes and Error Corrections [Abstract] | ' |
3. Recent Accounting Pronouncements | ' |
In February 2013, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2013-04,”Liabilities (Topic 405)”, which provides guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements. The guidance requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. The guidance also requires an entity to disclose the nature and amount of the obligation as well as other information about those obligations. ASU 2013-04 is effective for fiscal years beginning after December 15, 2013. We do not believe the adoption of ASU 2013-04 will have a material effect on the Company’s financial statements. | |
In February 2013, the FASB issued ASU 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” ASU 2013-02 requires disclosure of the amounts reclassified out of each component of accumulated other comprehensive income and into net earnings during the reporting period and is effective for reporting periods beginning after December 15, 2012. We do not believe the adoption of ASU 2013−02 will have a material impact on the measurement of net earnings or other comprehensive income. | |
In December 2011, the FASB issued ASU 2011-11, “Disclosures about Offsetting Assets and Liabilities” and in January 2013, the FASB issued ASU 2013-01, “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities”. ASU 2011-11, as clarified, enhances disclosures surrounding offsetting (netting) assets and liabilities. The clarified standard applies to derivatives, repurchase agreements and securities lending transactions and requires companies to disclose gross and net information about financial instruments and derivatives eligible for offset and to disclose financial instruments and derivatives subject to master netting arrangements in financial statements. The clarified standard did not have a material effect on our financial position or results of operations. | |
In October 2012, the FASB issued ASU 2012-04, “Technical Corrections and Improvements” in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update is effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 did not have a material impact on our financial position or results of operations. | |
Management does not believe any recently issued but not yet effective accounting pronouncements, if adopted, would have a material effect on the Company’s present or future financial statements. |
4_Disputed_Subsidiary
4. Disputed Subsidiary | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Disputed Subsidiary | ' | ||||||
4. Disputed Subsidiary | ' | ||||||
During the fourth quarter of 2012, the management of Rogue Paper effectively shut-down operations, denied the Company access to financial records, refused to participate in shareholder or management meetings and all members of Rogue management resigned January 25, 2013. No legal action has been taken by either Rogue Paper or the Company. As current financial records are not available since September 30, 2012, the Company has treated the balance sheets and results of operations of Rogue Paper as of and for the nine months ended September 30, 2012 in the same manner as a discontinued operation. | |||||||
The following table shows the results of Rogue Paper included in the income (loss) from disputed subsidiary: | |||||||
Year Ended December 31, | |||||||
2013 | 2012 | ||||||
Revenue | $ | – | $ | 322,000 | |||
Operating expenses: | |||||||
Cost of revenue | – | 135,221 | |||||
Selling, general and administrative expenses | – | 270,793 | |||||
Amortization of intangible assets | – | 114,750 | |||||
Total operating expenses | – | 520,764 | |||||
Income (loss) from disputed subsidiary | – | (198,764 | ) | ||||
Other expenses: | |||||||
Other income | – | (44 | ) | ||||
Impairment of intangible assets | – | 624,750 | |||||
Impairment of goodwill | – | 742,107 | |||||
Net income (loss) from loss from disputed subsidiary | $ | – | $ | (1,565,577 | ) | ||
The major classes of assets and liabilities of disputed subsidiary on the balance sheet are as follows: | |||||||
December 31, | |||||||
2013 | 2012 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash | $ | 70,951 | $ | 70,951 | |||
Accounts receivable | 27,480 | 27,480 | |||||
Prepaid expenses | 1,000 | 1,000 | |||||
Total current assets | 99,431 | 99,431 | |||||
Property and equipment, net | 7,840 | 7,840 | |||||
Total assets of discontinued operations | $ | 107,271 | $ | 107,271 | |||
LIABILITIES | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 11,116 | $ | 11,116 | |||
Total liabilities of discontinued operations | $ | 11,116 | $ | 11,116 |
5_Loans_Payable
5. Loans Payable | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Loans Payable [Abstract] | ' | ||||||
5. Loans Payable | ' | ||||||
Loans payable at December 31, 2013 and 2012 consisted of the following: | |||||||
December 31, | December 31, | ||||||
2013 | 2012 | ||||||
Unsecured $30,000 convertible note payable to Hanover Holdings I, LLC, which bears interest at 12% per annum and was due October 17, 2012. During the year ended December 31, 2012, $28,000 of the note balance was converted to common stock. During the year ended December 31, 2013, the remaining $2,000 of the note was converted to common stock. Accrued interest is equal to $2.905 and $2,750 at December 31, 2013 and 2012, respectively. | $ | 2,905 | $ | 4,750 | |||
On February 17, 2012, Panache Capital, LLC entered into an agreement to purchase $50,000 of the note payable to Azfar Haque. The Company exchanged the original note to Mr. Haque with a new note to Pananche which bears interest at 10% per annum and was due February 17, 2013. During the year ended December 31, 2012, $44,348 of the note was converted to common stock. Accrued interest is equal to $1,396 and $786 at December 31, 2013 and 2012, respectively. This note is in default at December 31, 2013. | 7,048 | 6,438 | |||||
Unsecured $70,000 convertible note payable to Hanover Holdings I, LLC, which bears interest at 12% per annum and due was October 24 2013. The note is discounted for its unamortized beneficial conversion feature of $-0- and $27,575 at December 31, 2013 and 2012, respectively. Accrued interest is equal to $16,244 and $7,309 at December 31, 2013 and 2012, respectively. This note is in default at December 31, 2013. | 86,244 | 49,734 | |||||
Unsecured $16,000 convertible note payable to Hanover Holdings I, LLC, which bears interest at 12% per annum and was due May 3, 2013. The note is discounted for its unamortized beneficial conversion feature of $-0- and $4,492 at December 31, 2013 and 2012. Accrued interest is equal to $3,317 and $1,297 at December 31, 2013 and 2012, respectively. This note is in default at December 31, 2013. | 19,317 | 12,805 | |||||
Unsecured $10,000 convertible note payable to Hanover Holdings I, LLC, which bears interest at 12% per annum and was due January 3, 2013. The note is discounted for its unamortized beneficial conversion feature of $-0- and $535 at December 31, 2013 and 2012, respectively. During the year ended December 31, 2013, the note balance of $10,952. including accrued interest, was converted to common stock. Accrued interest is equal to $766 at December 31, 2012. | – | 10,231 | |||||
Unsecured $3,000 convertible note payable to Hanover Holdings I, LLC, which bears interest at 12% per annum and was due January 21, 2013. During the year ended December 31, 2013, the note, including accrued interest of $1,770, was converted to common stock. Accrued interest is equal to $13 at December 31, 2012. | – | 3,013 | |||||
Unsecured $12,000 convertible note payable to Hanover Holdings I, LLC, which bears interest at 12% per annum and was due February 5, 2013. During the year ended December 31, 2013, $6,210 of the note was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $-0- and $1,433 at December 31, 2013 and 2012, respectively. Accrued interest is equal to $1,970 and $839 at December 31, 2013 and 2012, respectively. This note is in default at December 31, 2013. | 7,760 | 11,406 | |||||
December 31, | December 31, | ||||||
2013 | 2012 | ||||||
Unsecured $32,500 convertible note payable to Asher Enterprises, Inc., which bears interest at 8% per annum and was due February 25, 2012. During the year ended December 31, 2012, $12,000 of the note was converted to common stock. During the year ended December 31, 2013, the remaining $21,800 was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $3,092 at December 31, 2012. Accrued interest is equal to $1,600 at December 31, 2012. | – | 19,008 | |||||
Unsecured $5,500 convertible note payable to Hanover Holdings I, LLC, which bears interest at 12% per annum and was due March 6, 2013. During the year ended December 31, 2013, the note balance of $6,050 was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $1,099 at December 31, 2012. Accrued interest is equal to $328 at December 31, 2012. | – | 4,729 | |||||
Unsecured $42,500 convertible note payable to Asher Enterprises, Inc., which bears interest at 8% per annum and was due April 19, 2013. During the year ended December 31, 2013, the entire balance of the note in the amount of $44,200 was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $13,379 at December 31, 2012. Accrued interest is equal to $1,579 at December 31, 2012. | – | 30,700 | |||||
Unsecured $15,000 convertible note payable to Hanover Holdings I, LLC, which bears interest at 12% per annum and was due March 26, 2013. The note is discounted for its unamortized beneficial conversion feature of $-0- and $3,484 at December 31, 2013 and 2012, respectively. Accrued interest is equal to $2,663 and $794 at December 31, 2013 and 2012, respectively. This note is in default at December 31, 2013. | 17,663 | 12,310 | |||||
On November 2, 2011, the Company entered into a Unsecured Convertible Promissory Note Agreement with Bulldog Insurance for up to $250,000, which bears interest at 8% per annum. On August 3, 2012, the Company received $18,350, which was due March 31, 2013. The draw on the note is discounted for its unamortized beneficial conversion feature of $2,741 at December 31, 2012. During the year ended December 31, 2012, $516 of the note was purchased by StarCity Capital, LLC. During the year ended December 31, 2013, the note balance of $19,168 was purchased by Tangiers Investment Group, LLC. Accrued interest is equal to $381 at December 31, 2012. | – | 15,474 | |||||
On November 2, 2011, the Company entered into a Unsecured Convertible Promissory Note Agreement with Bulldog Insurance for up to $250,000, which bears interest at 8% per annum. On August 20, 2012, the Company received $10,000, which was due March 31, 2013. The draw on the note is discounted for its unamortized beneficial conversion feature of $1,514 at December 31, 2012. During the year ended December 31, 2013, the note balance of $10,300 was purchased by SGI Group, LLC. Accrued interest is equal to $183 at December 31, 2012. | – | 8,669 | |||||
December 31, | December 31, | ||||||
2013 | 2012 | ||||||
On November 2, 2011, the Company entered into a Unsecured Convertible Promissory Note Agreement with Bulldog Insurance for up to $250,000, which bears interest at 8% per annum. On August 27, 2012, the Company received $40,000, which was due March 31, 2013. The draw on the note is discounted for its unamortized beneficial conversion feature of $7,143 at December 31, 2012. During the year ended December 31, 2013, the note balance of $40,000 was purchased by WHC Capital, LLC. Accrued interest is equal to $699 at December 31, 2012. | – | 33,556 | |||||
Unsecured $10,000 convertible note payable to Southridge Partners II LP, which bears interest at 5% per annum and was due March 31, 2013. During the year ended December 31, 2013, the note, including accrued interest of $399, was converted to common stock. | – | 8,097 | |||||
On November 2, 2011, the Company entered into a Unsecured Convertible Promissory Note Agreement with Bulldog Insurance for up to $250,000, which bears interest at 8% per annum. On September 5, 2012, the Company received $4,100, which was due March 31, 2013. The draw on the note is discounted for its unamortized beneficial conversion feature of $891 at December 31, 2012. During the year ended December 31, 2013, the note balance of $4,264 was purchased by Tangiers Investment Group, LLC. Accrued interest is equal to $66 at December 31, 2012. | – | 3,275 | |||||
Unsecured $40,000 convertible note payable to Southridge Partners II LP, which bears interest at 5% per annum and was due March 31, 2013. The note is discounted for its unamortized beneficial conversion feature of $-0- and $6,154 at December 31, 2013 and 2012, respectively. Accrued interest is equal to $4,191 and $925 at December 31, 2013 and 2012, respectively. This note is in default at December 31, 2013. | 44,191 | 34,771 | |||||
Unsecured $15,000 note payable to SC Advisors, Inc., which bears interest at 8% per annum and was due June 30, 2013. Accrued interest is equal to $1,520 and $299 at December 31, 2013 and 2012, respectively. This note is in default at December 31, 2013. | 16,520 | 15,299 | |||||
Unsecured $10,000 convertible note payable to Southridge Partners II LP, which bears interest at 8% per annum and was due June 30, 2013. During the year ended December 31, 2013, the note, including accrued interest, was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $6,704 at December 31, 2012. Accrued interest is equal to $195 at December 31, 2012. | – | 3,491 | |||||
On November 2, 2011, the Company entered into a Unsecured Convertible Promissory Note Agreement with Bulldog Insurance for up to $250,000, which bears interest at 8% per annum. On October 24, 2012, the Company received $5,000, which was due May 24, 2013. The draw on the note is discounted for its unamortized beneficial conversion feature of $1,456 at December 31, 2012. During the year ended December 31, 2013, the note balance of $5,169 was purchased by Tangiers Investment Group, LLC. Accrued interest is equal to $75 at December 31, 2012. | – | 3,619 | |||||
Unsecured $39,647 note payable to Azfar Hague, which bears interest at 9% per annum and was due April 25, 2013. $20,000 of this note was purchased by Tangiers Investment Group, LLC on July 26, 2013. Accrued interest is equal to $3,379 and $655 at December 31, 2013 and 2012, respectively. This note is in default at December 31, 2013. | 23,026 | 40,302 | |||||
December 31, | December 31, | ||||||
2013 | 2012 | ||||||
Unsecured $15,000 note payable to SC Advisors, Inc., which bears interest at 8% per annum and was due June 30, 2013. Accrued interest is equal to $1,398 and $181 at December 31, 2013 and 2012, respectively. This note is in default at December 31, 2013. | 16,398 | 15,181 | |||||
Unsecured $7,000 convertible note payable to Southridge Partners II LP, which bears interest at 8% per annum and was due September 30, 2013. During the year ended December 31, 2013, the note, including accrued interest, was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $5,415 at December 31, 2012. Accrued interest is equal to $81 at December 31, 2012. | – | 1,666 | |||||
Unsecured $32,500 convertible note payable to Asher Enterprises, Inc., which bears interest at 8% per annum and was due August 13, 2013. During the year ended December 31, 2013, $3,300 of the note was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $-0- and $24,932 at December 31, 2013 and 2012, respectively. Accrued interest is equal to $2,874 and $370 at December 31, 2013 and 2012, respectively. This note is in default at December 31, 2013. | 32,074 | 7,938 | |||||
On November 2, 2011, the Company entered into a Unsecured Convertible Promissory Note Agreement with Bulldog Insurance for up to $250,000, which bears interest at 8% per annum. On November 15, 2012, the Company received $10,000, which was due May 15, 2013. The draw on the note is discounted for its unamortized beneficial conversion feature of $3,309 at December 31, 2012. During the year ended December 31, 2013, the note was purchased by WHC Capital, LLC. Accrued interest is equal to $109 at December 31, 2012. | – | 7,150 | |||||
Unsecured $18,000 convertible note payable to Southridge Partners II LP, which bears interest at 8% per annum and was due June 30, 2013. During the year ended December 31, 2013, the note balance of $19,174, including accrued interest, was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $15,296 at December 31, 2012. Accrued interest is equal to $126 at December 31, 2012. | – | 2,830 | |||||
Unsecured $9,000 convertible note payable to Star City Capital LLC, which bears interest at 12% per annum and was due December 3, 2013. The note is discounted for its unamortized beneficial conversion feature of $-0- and $8,220 at December 31, 2013 and 2012, respectively. Accrued interest is equal to $1,179 and $83 at December 31, 2013 and 2012, respectively. This note is in default at December 31, 2013. | 10,179 | 863 | |||||
Unsecured $15,000 note payable to SC Advisors, Inc., which bears interest at 8% per annum and was due June 30, 2013. Accrued interest is equal to $1,312 and $99 at December 31, 2013 and 2012, respectively. This note is in default at December 31, 2013. | 16,312 | 15,099 | |||||
Unsecured $25,000 convertible note payable to Southridge Partners II LP, which bears interest at 8% per annum and was due June 30, 2013. The note is discounted for its unamortized beneficial conversion feature of $-0- and $22,625 at December 31, 2013 and 2012, respectively. Accrued interest is equal to $2,125 and $104 at December 31, 2013 and 2012, respectively. This note is in default at December 31, 2013. | 27,125 | 2,479 | |||||
December 31, | December 31, | ||||||
2013 | 2012 | ||||||
On December 12, 2012, Star City Capital LLC entered into an agreement to purchase $19,700 of a note payable to Bulldog Insurance. The note bears interest at 8% per annum and is due on demand. During the year ended December 31, 2013, $18,018 of the note, including accrued interest, was converted to common stock. Accrued interest is equal to $-0- and $51 at December 31, 2013 and 2012, respectively. | 2,407 | 19,751 | |||||
Unsecured $7,500 convertible note payable to Southridge Partners II LP, which bears interest at 8% per annum and was due June 30, 2013. During the year ended December 31, 2013, the entire note balance, including accrued interest, of $8,000 was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $7,378 at December 31, 2012. Accrued interest is equal to $5 at December 31, 2012. | – | 127 | |||||
Unsecured $32,500 convertible note payable to Asher Enterprises, Inc., which bears interest at 8% per annum and was due November 1, 2013. Accrued interest is equal to $2,351. This note is in default at December 31, 2013. | 34,851 | – | |||||
Unsecured $35,000 convertible note payable to Lucosky Brookman LLP, which bears interest at 12% per annum and due on demand. Accrued interest is equal to $3,378. | 38,378 | – | |||||
Unsecured $43,922 convertible note payable to Lucosky Brookman LLP, which bears interest at 12% per annum and due on demand. Accrued interest is equal to $4,238. | 48,160 | – | |||||
Unsecured $32,500 convertible note payable to Asher Enterprises, Inc., which bears interest at 8% per annum and is due January 31, 2014. The note is discounted for its unamortized beneficial conversion feature of $3,501 at December 31, 2013. Accrued interest is equal to $1,752. | 30,751 | – | |||||
Unsecured $7,000 note payable to Andre Fluellen, which calls for flat interest of $1,500 at maturity and was due October 30, 2013. This note is in default at December 31, 2013. | 8,500 | – | |||||
On May 6, 2013, WHC Capital, LLC entered into an agreement to purchase $50,000 of notes payable to Bulldog Insurance. The note bears interest at 8% per annum and is due March 6, 2014. During the year ended December 31, 2013, $20,612 of the note was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $8,748 at December 31, 2013. Accrued interest is equal to $3,297 at December 31, 2013. | 23,937 | – | |||||
Unsecured $20,000 convertible note payable to WHC Capital, LLC., which bears interest at 8% per annum and due March 9, 2014. The note is discounted for its unamortized beneficial conversion feature of $3,661 at December 31, 2013. Accrued interest is equal to $1,034. | 17,373 | – | |||||
Unsecured $32,500 convertible note payable to Asher Enterprises, Inc., which bears interest at 8% per annum and is due March 3, 2014. The note is discounted for its unamortized beneficial conversion feature of $6,316 at December 31, 2013. Accrued interest is equal to $1,531. | 27,715 | – | |||||
Unsecured $7,500 note payable to Andre Fluellen, which calls for flat interest of $1,400 at maturity and was due December 1, 2013. This note is in default at December 31, 2013. | 8,900 | – | |||||
Unsecured $10,000 note payable to Sammie Hill, III, which calls for flat interest of $2,000 at maturity and was due December 15, 2013. This note is in default at December 31, 2013. | 12,000 | – | |||||
Unsecured $5,000 convertible note payable to Tangiers Investment Group, LLC., which bears interest at 10% per annum and is due June 21, 2014. The note is discounted for its unamortized beneficial conversion feature of $2,356 at December 31, 2013. Accrued interest is equal to $264. | 2,908 | – | |||||
December 31, | December 31, | ||||||
2013 | 2012 | ||||||
Unsecured $12,000 note payable to Bulldog Insurance, which bears interest at 7% per annum and was due December 1, 2013. Accrued interest is equal to $433. This note is in default at December 31, 2013. | 12,433 | – | |||||
Unsecured $3,000 note payable to Andre Fluellen, which calls for flat interest of $500 at maturity and was due December 1, 2013. This note is in default at December 31, 2013. | 3,500 | – | |||||
Unsecured $3,000 note payable to Andre Fluellen, which calls for flat interest of $500 at maturity and is due February 22, 2014. Accrued interest is equal to $106. | 3,106 | – | |||||
Unsecured $14,500 convertible note payable to Asher Enterprises, Inc., which bears interest at 8% per annum and is due May 5, 2014. The note is discounted for its unamortized beneficial conversion feature of $6,202 at December 31, 2013. Accrued interest is equal to $457. | 8,755 | – | |||||
Unsecured $8,500 non-interest bearing note payable to Azfar Hague due February 5, 2014. | 8,500 | – | |||||
Unsecured $10,000 non-interest bearing note payable to Azfar Hague due February 20, 2014. | 10,000 | – | |||||
Unsecured $8,500 note payable to Bulldog Insurance, which bears interest at 5% per annum and due February 28, 2014. Accrued interest is equal to $142. | 8,642 | – | |||||
Unsecured $6,500 convertible note payable to Tangiers Investment Group, LLC., which bears interest at 10% per annum and is due July 25, 2014. The note is discounted for its unamortized beneficial conversion feature of $3,668 at December 31, 2013. Accrued interest is equal to $283. | 3,115 | – | |||||
On July 26, 2013, Tangiers Investment Group, LLC entered into an agreement to purchase $20,000 of notes payable to Azfar Hague. The note bears interest at 10% per annum and is due July 26, 2014. The note is discounted for its unamortized beneficial conversion feature of $11,342 at December 31, 2013. Accrued interest is equal to $866. | 9,524 | – | |||||
Unsecured $5,000 convertible note payable to Tangiers Investment Group, LLC., which bears interest at 10% per annum and due August 2, 2014. The note is discounted for its unamortized beneficial conversion feature of $2,1931 at December 31, 2013. Accrued interest is equal to $207. | 2,276 | – | |||||
Unsecured $5,000 convertible note payable to WHC Capital, LLC., which bears interest at 8% per annum and is due August 12, 2014. The note is discounted for its unamortized beneficial conversion feature of $3,068 at December 31, 2013. Accrued interest is equal to $155. | 2,087 | – | |||||
On January 3, 2013, Black Arch Opportunity Fund LP entered into an agreement to purchase $18,737 of notes payable to Bulldog Insurance. The note bears interest at 12% per annum and is was due December 1, 2013. During the year ended December 31, 2013, $9,466 of the note, including accrued interest, was converted to common stock. Accrued interest is equal to $1,088. This note is in default at December 31, 2013. | 11,265 | – | |||||
Unsecured $20,000 convertible note payable to CJ Mosley, which calls for flat interest of $1,800 due at maturity and is due April 28, 2014. The note is discounted for its unamortized beneficial conversion feature of $5,650 at December 31, 2013. Accrued interest is equal to $600. | 14,950 | ||||||
Total Loans Payable | $ | 680,795 | $ | 404,761 | |||
The Company accrued interest expense of $64,580 and $126,284 for the years ended December 31, 2013 and 2012, respectively, on the above loans. Accrued interest is included in the loan balances. | |||||||
The Company borrowed $281,000 and $851,711 during the years ended December 31, 2013 and 2012, respectively. The Company made payments of $5,000 and $12,600 on the loans during the years ended December 31, 2013 and 2012. During the year ended December 31, 2013, the Company converted $257,267 of loans payable into 1,975,718,232 shares of the Company’s common stock. During the year ended December 31, 2012, the Company converted $875,433 of loans payable into 3,693,754 shares of the Company’s common stock and $57,000 of loans payable into 1,000,000 shares of the Company’s Series A preferred stock. |
6_Related_Parties
6. Related Parties | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Related Parties | ' | ||||||
6. Related Parties | ' | ||||||
Loans payable – related parties at December 31, 2013 and 2012 consist of the following: | |||||||
December 31, | December 31, | ||||||
2013 | 2012 | ||||||
Unsecured non-interest bearing notes payable, due on demand, to Frank Russo, a shareholder and former Director of the Company. During the year ended December 31, 2013, $60,000 of the note balance was converted to Series A preferred stock. | $ | 301,429 | $ | 354,979 | |||
Unsecured notes payable to Edward Eppel, a shareholder and Director of the Company, which bears interest at 10% per annum and is due on demand. During the year ended December 31, 2013, $80,000 of the note was converted to Series A preferred stock. Accrued interest is equal to $60,789 and $31,374, respectively. | 189,950 | 184,930 | |||||
Unsecured $20,000 note payable to Robert Saidel, which bears interest at 7% per annum and due December 1, 2013. Accrued interest is equal to $848. This note is in default at December 31, 2013. | 20,848 | – | |||||
Unsecured $7,500 note payable to Robert Saidel, which bears interest at 7% per annum and due January 8, 2014. Accrued interest is equal to $253. | 7,753 | – | |||||
Unsecured $10,000 note payable to Robert Saidel, which bears interest at 7% per annum and due February 16, 2014. Accrued interest is equal to $262. | 10,262 | – | |||||
Unsecured $4,000 note payable to Robert Saidel, which bears interest at 7% per annum and due March 9, 2014. Accrued interest is equal to $87. | 4,087 | – | |||||
Unsecured $137,833 note payable to Robert Saidel, which bears interest at 7% per annum and due April 25, 2014. Accrued interest is equal to $1,535. | 139,368 | ||||||
Total | 673,697 | 539,909 | |||||
Less current portion | (601,348 | ) | – | ||||
Loan payable - related parties, non-current | $ | 72,349 | $ | 539,909 | |||
Frank Russo, a shareholder and former Director of the Company, is a holder of an unsecured non-interest bearing note of the Company. At December 31, 2011, $409,979 was due to Mr. Russo. The Company repaid $5,000 to Mr. Russo during the year ended December 31, 2012. During the year ended December 31, 2013, the Company borrowed $6,450 from Mr. Russo. During the year ended December 31, 2012, the Company converted $50,000 of the note to 13,750,000 shares of Series A preferred stock and $10,000 of accrued board compensation due to Mr. Russo into 102,041 shares of Series A preferred stock. During the year ended December 31, 2013, the Company converted $60,000 of the note into 9,166,667 shares of Series A preferred stock. Additionally, during the year ended December 31, 2012, Mr. Russo converted 6,922,685 shares of common stock owned by him into 346,134 shares of Series A preferred stock. | |||||||
Edward Eppel, a shareholder and Director of the Company, is a holder of a note of the Company which bears interest at 10% per annum. At December 31, 2011, $189,319 was due to Mr. Eppel. The Company borrowed $71,377 from Mr. Eppel during the year ended December 31, 2013. $13,643 and $15,611 of interest was accrued and included in the loan balance for the years ended December 31, 2013 and 2012, respectively. During the year ended December 31, 2012, the Company converted $20,000 of the note to 2,500,000 shares of Series A preferred stock and $10,000 of accrued board compensation due to Mr. Eppel into 102,041 shares of series A preferred stock. During the year ended December 31, 2013, the Company converted $80,000 of the note to 19,166,166 shares of Series A preferred stock. | |||||||
Robert Saidel, a shareholder of the Company, is a holder of notes of the Company which bear interest at 10% per annum. The Company borrowed $179,333 from Mr. Saidel during the year ended December 31, 2013. $2,985 of interest was accrued and included in the loan balance for the year ended December 31, 2013. During the year ended December 31, 2013, Mr. Saidel purchased 7,000,000 shares of the Company’s Series A preferred stock for $45,000. | |||||||
At December 31, 2011, $31,000 was owed to Mr. Anis Sherali, a shareholder and Director of the Company. During the year ended December 31, 2012, the Company borrowed an additional $56,500 from Mr. Sherali and converted the $87,500 balance of the note and issued 2,592,898 shares of Series A preferred stock to Mr. Sherali. During the year ended December 31, 2012, Mr. Sherali purchased 19,905,075 shares of the Company’s Series A preferred stock for $150,500 and the Company converted $10,000 of accrued board compensation due to Mr. Sherali into 102,041 shares of Series A Preferred stock. Additionally, during the year ended December 31, 2012, Mr. Sherali purchased 533,333 shares of common stock for $40,000 and converted 64,842 shares of common stock owned by him into 1,621,047 shares of Series A preferred stock. During the year ended December 31, 2013, Mr. Sherali purchased 10,000,000 shares of the Company’s common stock for $20,000 and 14,862,035 shares of the Company’s Series A preferred stock for $55,500. Additionally, during the year ended December 30, 2013 Mr. Sherali agreed to purchase 15,000,000 shares of common stock for $4,500 and 51,250,000 shares of Series A preferred stock for $117,500. These amounts are included in common stock issuable and preferred stock issuable, respectively, at December 31, 2013. | |||||||
During the year ended December 31, 2012, the Company converted $10,000 of accrued board compensation due to Mr. Kayode Aladesuyi, the Company’s Chief executive Officer and a Director, into 102,041 shares of Series A preferred stock, issued 14,583,333 shares of Series A preferred stock as a bonus award to Mr. Aladesuyi and issued 32,500,000 shares of Series A preferred stock in conversion of $110,000 of accrued compensation. During the year ended December 31, 2013, the Company converted $260,000 of accrued salaries due to Mr. Kayode Aladesuyi, the Chief Executive Officer and Director of the Company, into 98,333,333 shares of the Company’s Series A preferred stock. | |||||||
On October 5, 2011, the Company entered into a license with BBGN&K LLC (“BBGN&K”) for the rights to use certain patented technologies of which BBGN&K owns the patents. Mr. Aladesuyi is the managing member of BBGN&K. The license agreement calls for royalty payments beginning in 2012 of 8% of EarthSearch’s revenues to be paid quarterly. Also on October 5, 2011, the Company's Board of Directors approved the issuance of 1,428,572 shares of Series A preferred stock to Mr. Aladesuyi as payment of $200,000 initial license fee. Royalty fees were $4,013 and $44,441 for the years ended December 31, 2013 and 2012, respectively. | |||||||
On August 5, 2012, the Company entered into a license agreement with Web Asset, LLC (“Web Asset”) for the rights to use certain social media concept and idea created by Mr. Kayode Aladesuyi. Mr. Aladesuyi is the managing member of Web Asset. The license agreement calls for royalty payments of 49% of the revenues earned by the Company in its use of the social media concept after the Company has earned its first $2,000,000 of revenue, payable quarterly. In addition, the Company was required to pay to Web Asset a one-time fee of $150,000. $85,327 of the one-time fee has been paid during the year ended December 31, 2012 and the remaining $64,673 was paid during the year ended December 31, 2013. | |||||||
Andrea Sousa, Comptroller of the Company, is the wife of Kayode Aladesuyi. On January 12, 2012 the Company issued 7,500,000 shares of the Company’s common stock in exchange of salaries payable to Ms. Rocha of $22,500. | |||||||
During the year ended December 31, 2012, Mr. Aladesuyi, his five children, and BBGN&K converted a combined 46,027,281 shares of common stock owned by them into 2,301,363 shares of Series A preferred stock. | |||||||
During the year ended December 31, 2012, Ms. Sousa converted 1,119,436 shares of common stock owned by her into 55,971 shares of Series A preferred stock. |
7_Amounts_Payable_in_Common_St
7. Amounts Payable in Common Stock and Derivative Liability | 12 Months Ended |
Dec. 31, 2013 | |
Amounts Payable In Common Stock And Derivative Liability | ' |
7. Amounts Payable in Common Stock and Derivative Liability | ' |
During the year ended December 31, 2012, Ironridge Global IV, Ltd. (“Ironridge”) purchased $826,367 of accounts payable and $241,978 of loans payable, for a total of $1,068,345, from certain creditors of the Company. On April 20, 2012, the Superior Court of the State of California for the County of Los Angeles, Central District approved a Stipulation for Settlement of Claims (the “Settlement of Claims”) in the favor of Ironridge. The Settlement of Claims calls for the amount to be paid by issuance of the Company’s common stock. The number of shares of the common stock is to be calculated based on the volume weighted average price (“VWAP”) of the common stock over the calculation period, not to exceed the arithmetic average of the individual daily VWAPs of any five trading days during the calculation period, less a discount of 35%. The calculation period is defined as the period from the approval of the Settlement of Claims until the settlement is completed. | |
As the terms of the settlement include issuing common stock at a 35% discount to the conversion price, a derivative liability for the discount was established at the time of the Settlement of Claims of $575,263, which was charged to operations during the year ended December 31, 2012 as a loss on conversion of debt. The derivative liability is revalued at the end of each reporting period with any change in the liability being charged to operations. For the years ended December 31, 2013 and 2012, the change in derivative liability of $154,277 and $(12,099), respectively, has been recognized (expensed). | |
As common stock is issued in installments on the settlement, the Amounts Payable in Common Stock and the Derivative Liability will be reduced accordingly. During the year ended December 31, 2013, 101,300,000 shares of common stock, with a market value of $113,000, were issued to Ironridge in settlement of $173,730 of the liability, resulting in the reduction of the derivative liability of $105,270. During the year ended December 31, 2012, 1,610,400 shares of common stock, with a market value of $1,201,930, were issued to Ironridge in settlement of $773,390 of the liability, resulting in the reduction of the derivative liability of $416,441. |
8_Stockholders_Deficit
8. Stockholders' Deficit | 12 Months Ended |
Dec. 31, 2013 | |
Stockholders Deficit | ' |
8. Stockholders' Deficit | ' |
Authorized Capital | |
On September 17, 2010, the Board authorized the creation of a common stock incentive plan (the “2010 Stock Incentive Plan”) for our management and consultants. The Company registered twenty five million (25,000,000) shares of its common stock pursuant to the 2010 Stock Incentive Plan on Form S-8 filed with the Commission on September 27, 2010. As of September 30, 2012, no options have been granted under the plan. | |
On October 19, 2012, the Company filed a certificate of amendment to the Company’s Articles of Incorporation with the Secretary of State of Nevada to increase the Company’s authorized capital stock to 6,000,000,000 shares, par value $0.001 per share, including (i) 5,900,000,000 shares of common stock, par value $0.001 per share and (ii) 100,000,000 shares of preferred stock, par value $0.001 per share. | |
On December 1, 2012, the Company’s Board of Directors elected to increase the Company’s authorized shares of Series A preferred stock to 400,000,000 shares, par value $0.001 per share and on May 9, 2013, filed a certificate of amendment to the Company’s Articles of Incorporation with the Secretary of State of Nevada to increase the Company’s authorized shares of preferred stock to 400,000,000 shares, par value $0.001 per share. | |
Stock Splits | |
On December 20, 2012, the Company's Board of Directors declared a one for five hundred reverse stock split of all outstanding shares of common stock and series B preferred stock. All common share and per common share data in these consolidated financial statements and related notes hereto have been retroactively adjusted to account for the effect of the reverse stock splits for all periods presented prior to December 31, 2012. The total number of authorized common and preferred shares and the par value thereof was not changed by the split. | |
Preferred Stock Issued for Cash | |
During the year ended December 31, 2013, the Company issued 54,208,334 shares of Series A preferred stock in private placements for a total of $184,000 ($0.0034 per share average). During the year ended December 31, 2012, the Company issued 21,256,384 shares of Series A preferred stock in private placements for a total of $197,900 ($0.0093 per share average). | |
Preferred Stock Issuable for Subscriptions | |
During the year ended December 31, 2013, the Company entered into subscription agreements for 161,137,035 shares of its Series A preferred stock to be issued for a total of $442,500. $248,000 cash was received for 74,812,035 shares, $15,000 of loans from related parties was converted into 7,500,000 shares, $60,500 of accrued salaries was converted into 27,500,000. As of December 31, 2013, there were 51,325,000 shares of Series A preferred stock, representing $119,000, remaining to be issued. | |
During the year ended December 31, 2012, the Company issued 1,500 shares of series B preferred stock in a private placement for a total of $1,500,000 ($1,000 per share). During the years ended December 31, 2013 and 2012, $42,500 and $344,002 of the subscription receivable was received in cash, respectively. | |
Preferred Stock Issued in Conversion of Debt | |
During the year ended December 31, 2013, the Company issued 28,333,333 shares of Series A preferred stock in the conversion of $140,000 of notes payable to related parties. During the year ended December 31, 2012, the Company issued 18,842,898 shares of Series A preferred stock in the conversion of $157,500 of notes payable to related parties (see Note 6 – Related Parties) and 1,000,000 shares of Series A Preferred in the conversion of $57,000 of notes payable to unrelated parties (see Note 5 – Loans Payable). | |
During the year ended December 31, 2013, the Company issued 100,833,333 shares of Series A preferred stock in the conversion of $290,500 of accrued salaries. | |
Preferred Stock Issued for Services | |
During the year ended December 31, 2012, the Company converted $40,000 of accrued compensation to its board of directors to 408,164 shares of Series A preferred stock and issued 14,583,333 and 32,500,000 shares of Series A preferred stock to its Chief Executive Officer as a bonus award and in conversion of accrued compensation, respectively, (see Note 6 – Related Parties), issued 607,487 shares of Series A preferred stock to an unrelated party for services at the fair value of the services rendered of $45,000, and issued 613 shares of Series B preferred stock to an unrelated party for services at the fair value of the services rendered of $125,000. | |
Preferred Stock Issued in Conversion of Common Stock | |
During the year ended December 31, 2013, the Company issued 164,286 shares of Series A preferred stock to an unrelated party for the conversion and return of 6,572 shares of common stock. | |
During the year ended December 31, 2012, the Company issued 4,324,515 shares of Series A preferred stock to related parties for the conversion and return of 172,981 shares of common stock and issued 372,000 shares of Series A preferred stock to unrelated parties for the conversion and return of 14,880 shares of common stock. | |
Preferred Stock Purchased for Cash | |
During the year ended December 31, 2013, the Company purchased 1,375,000 shares of its Series A preferred stock from two shareholders for $5,000 cash. | |
Common Stock Issued for Cash | |
During the year ended December 31, 2013, the Company issued 130,000,000 shares of common stock in private placements for a total of $32,000 ($0.0002 per share). During the year ended December 31, 2012, the Company issued 833,833 shares of common stock in private placements for a total of $56,000 ($0.07 per share). | |
Common Stock Issuable for Subscriptions | |
During the year ended December 31, 2013, the Company entered into subscription agreements for 15,000,000 shares of its common stock to be issued for a total of $4,500. | |
Common Stock Issued in Conversion of Debt | |
During the year ended December 31, 2013, the Company issued 1,975,718,232 shares of common stock in the conversion of $257,267 of notes payable to unrelated parties. During the year ended December 31, 2012, the Company issued 3,693,754 shares of common stock in the conversion of $875,433 of notes payable to unrelated parties (see Note 5 – Loans Payable). | |
During the year ended December 31, 2013, the Company issued 101,300,000 shares of common stock, with a market value of $113,000, to Ironridge in settlement of $173,730 of amounts payable in common stock. During the year ended December 31, 2012, the Company issued 1,610,400 shares of common stock, with a fair value of $1,201,930, to Ironridge in settlement of $773,390 of amounts payable in common stock (see Note 7 – Amounts Payable in Common Stock and Derivative Liability). | |
Common Stock Issued for Services | |
During the year ended December 31, 2013, the Company issued 1,319,444 shares of common stock to two unrelated parties for services of $12,900, or an average price of $0.01 per share based on the fair value of the shares at the time of issuance. During the year ended December 31, 2012, the Company issued 29,638 shares of common stock to unrelated parties for services of $82,205, or an average price of $2.77 per share based on the fair value of the shares at the time of issuance. 25,638 of these shares were issued under the 2010 Stock Incentive Plan (“2010 Plan”) dated September 17, 2010. As of December 31, 2012, 460 shares remain unissued under the 2010 Plan. | |
During the year ended December 31, 2012, the Company converted $22,500 of accrued salaries due to Ms. Rocha to 15,000 shares of common stock, at a price of $0.042 per share based on the fair value of the shares at the time of issuance (see Note 6 – Related Parties). During the year ended December 31, 2011, the Company converted $230,000 of accrued salaries due to Mr. Aladesuyi to 65,714 shares of common stock, at a price of $3.50 per share based on the fair value of the shares at the time of issuance (see Note 6 – Related Parties). | |
The Company’s Board of Directors unanimously agreed to grant 4,000 shares to Mr. Kayode Aladesuyi, the Company’s Chief Executive Officer and Chairman, under the 2010 Plan, in lieu of unpaid salary of $87,500 out of an accrued aggregate of $175,000. Mr. Aladesuyi declined the acceptance of the shares and, accordingly, the issuance was cancelled. | |
During the year ended December 31, 2012, the Company issued 1,200 shares of common stock to an unrelated party for an incentive to enter into a loan agreement, at an average price of $1.80 per share based on the fair value of the shares at the time of issuance (see Note 5 – Loans Payable). | |
Common Stock Issued in Conversion of Preferred Stock | |
During the year ended December 31, 2013, the Company issued 6,219,000 shares of common stock to unrelated parties for the conversion and return of 39,050 shares of Series A preferred stock resulting in a reduction in the acquisition liability related to the RP Share Exchange Agreement with the shareholders of Rogue Paper of $23,123. | |
During the year ended December 31, 2012, the Company issued 622,566 shares of common stock and 56 shares of Series B preferred stock to an unrelated parties for the conversion and return of 1,046,739 shares of Series A preferred stock. | |
Common Stock Purchased for Cash | |
During the year ended December 31, 2013, the Company purchased 1,500 shares of its common stock from a shareholder for $5,000 ($3.33 per share). |
9_Income_Taxes
9. Income Taxes | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
9. Income Taxes | ' | ||||||||
The income tax expense (benefit) differs from the amount computed by applying the United States Statutory corporate income tax rate as follows: | |||||||||
Year Ended December 31, | |||||||||
2013 | 2012 | ||||||||
Expected income tax (benefit) at 34% statutory rate | -34.00% | -34.00% | |||||||
Permanent tax differences | 7.20% | 4.60% | |||||||
Timing differences | 0.00% | 0.00% | |||||||
Change in valuation allowance | 26.80% | 29.40% | |||||||
Actual tax expense | 0.00% | 0.00% | |||||||
Deferred income taxes reflect the tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. The components of the net deferred income tax assets are approximately as follows: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Deferred income tax assets: | |||||||||
Net operating loss carry forwards | $ | 7,043,090 | $ | 6,423,760 | |||||
Valuation allowance | (7,043,090 | ) | (6,423,760 | ) | |||||
Net deferred income tax assets | $ | – | $ | – | |||||
The amount taken into income as deferred income tax assets must reflect that portion of the income tax loss carry forwards that is more likely than not to be realized from future operations. The Company has established a full valuation allowance on its net deferred tax assets because of a lack of sufficient positive evidence to support its realization. The valuation allowance increased by $619,330 and $1,430,990 for the years ended December 31, 2013 and 2012, respectively. | |||||||||
No provision for income taxes has been provided in these financial statements due to the net loss for the years ended December 31, 2013 and 2012. At December 31, 2013, the Company has net operating loss carry forwards of approximately $20,715,000, which expire commencing 2024. The potential tax benefit of these losses may be limited due to certain change in ownership provisions under Section 382 of the Internal Revenue Code (“IRS”) and similar state provisions. | |||||||||
IRS Section 382 places limitations (the “Section 382 Limitation”) on the amount of taxable income which can be offset by net operating loss carry forwards after a change in control (generally greater than 50% change in ownership) of a loss corporation. Generally, after a change in control, a loss corporation cannot deduct operating loss carry forwards in excess of the Section 382 Limitation. Due to these “change in ownership” provisions, utilization of the net operating loss and tax credit carry forwards may be subject to an annual limitation regarding their utilization against taxable income in future periods. The Company has not concluded its analysis of Section 382 through December 31, 2013, but believes the provisions will not limit the availability of losses to offset future income. | |||||||||
The Company is subject to income taxes in the U.S. federal jurisdiction and the state of Georgia. The tax regulations within each jurisdiction are subject to interpretation of related tax laws and regulations and require significant judgment to apply. As of December 31, 2013, tax years 2009 through 2012 remain open for IRS audit. The Company has received no notice of audit from the IRS for any of the open tax years. |
10_Commitments_and_Contingenci
10. Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments And Contingencies | ' | ||||
10. Commitments and Contingencies | ' | ||||
Operating Leases | |||||
The Company leases its office facilities in Marietta, Georgia. The term of the lease is 66 months with escalating lease payments beginning at $2,163 per month. At December 31, 2013, future minimum lease payments under the lease are as follows: | |||||
2014 | 27,550 | ||||
2015 | 28,366 | ||||
2016 | 29,219 | ||||
2017 | 15,054 | ||||
$ | 100,189 | ||||
Rent expense was $30,727 and $23,186 for the years ended December 31, 2013 and 2012, respectively. | |||||
Acquisition Liabilities | |||||
Pursuant to the RP Share Exchange Agreement with Rogue Paper, Inc., commencing six months from October 23, 2011 (the “Execution Date”), both the Company and the holders of the Preferred Shares shall have the option to redeem any portion of such holders Preferred Shares for cash, at a price of sixty cents ($0.60) per share, or $1,075,000. Commencing twenty four (24) months from the Execution date, holders of the remaining forty-nine percent (49%) of Rogue Paper Common Shares, have the option to have such shares redeemed by the Company for cash, at a price of $0.03 per share, or $29,973. During the year ended December 31, 2013, the Company issued 6,219,000 shares of common stock to unrelated parties for the conversion and return of 39,050 shares of Series A preferred stock resulting in a reduction in the acquisition liability of $23,123. | |||||
License Agreements | |||||
On October 5, 2011, the Company entered into a license with BBGN&K LLC (“BBGN&K”) for the rights to use certain patented technologies of which BBGN&K owns the patents. The license agreement calls for royalty payments beginning in 2012 of 8% of EarthSearch’s revenues to be paid quarterly. Royalty expense was $4,013 and $44,441 for the years ended December 31, 2013 and 2012, respectively (see Note 3 – Related Parties). | |||||
On August 5, 2012, the Company entered into a license agreement with Web Asset, LLC (“Web Asset”) for the rights to use certain social media concept and idea created by Mr. Kayode Aladesuyi. The license agreement calls for royalty payments of 49% of the revenues earned by the Company in its use of the social media concept after the Company has earned its first $2,000,000 of revenue, payable quarterly. No royalty payments have been made as of December 31, 2013 (see Note 3 – Related Parties). |
11_Subsequent_Events
11. Subsequent Events | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Events [Abstract] | ' |
11. Subsequent Events | ' |
On January 3, 2014, the Company issued 3,750,000 shares of its Series A preferred stock to a related party for $7,500 in cash. | |
On January 4, 2014, the Company issued a $20,050 unsecured promissory note to Edward Eppel. The note bears interest at 7% per annum and is due December 31, 2015. | |
On January 6, 2014, the Company issued 189,739,800 shares of its common stock in conversion of loans payable in the amount of $9,487. | |
On January 8, 2014, the Company issued 200,000,000 shares of its common stock in conversion of loans payable in the amount of $10,000. | |
On January 9, 2014, the Company issued 5,000,000 shares of its Series A preferred stock to a related party for $10,000 in cash. | |
On January 21, 2014, the Company issued a $7,700 unsecured promissory note to Andre Fluellen. The note bears interest at 10% per annum and is due June 21, 2014. | |
On January 21, 2014, the Company issued 1,000,000 shares of its Series A preferred stock to a related party for $2,000 in cash. | |
On January 22, 2014, the Company issued 20,000,000 shares of its Series A preferred stock to an unrelated party for $40,000 in cash. | |
On January 27, 2014, the Company issued 220,844,765 shares of its common stock in conversion of loans payable in the amount of $11,042. | |
On February 10, 2014, the Company issued 110,385,400 shares of its common stock in conversion of loans payable in the amount of $4,967. | |
On February 11, 2014, the Company issued 462,812,001 shares of its common stock in conversion of loans payable in the amount of $23,141. | |
On February 13, 2014, the Company issued 294,000,000 shares of its common stock in conversion of loans payable in the amount of $14,700. | |
On February 14, 2014, the Company issued 231,904,000 shares of its common stock in conversion of loans payable in the amount of $11,595. | |
On February 22, 2014, the Company issued 2,500,000 shares of its Series A preferred stock to an unrelated party for $10,000 in cash. | |
On February 21, 2014, the Company issued 155,000,000 shares of its common stock in conversion of loans payable in the amount of $6,975. | |
On February 24, 2014, the Company issued 280,000,000 shares of its common stock in conversion of loans payable in the amount of $14,000. | |
On February 25, 2014, the Company issued 100,548,000 shares of its common stock in conversion of loans payable in the amount of $5,027. | |
On February 28, 2014, the Company issued 293,519,800 shares of its common stock in conversion of loans payable in the amount of $14,676. | |
On February 28, 2014, the Company’s subsidiary, Student Connect, Inc. (“Student Connect”), entered into a 5 year licensing agreement with Nueva Tech, LLC (“Nueva Tech”). Under the terms of the agreement, Student Connect will receive a one-time licensing fee of $100,000, of which $50,000 has been received and the remaining $50,000 is due within 90 days of the date of the agreement. Nueva Tech is appointed a Master Distributor of the Company’s products and granted an exclusive license to sell the products in the state of California, as well as a non-exclusive license to sell the Company’s products in Arizona, Washington, Oregon, Nevada, New Mexico, and Hawaii. All advertisement revenue generated will be shared, net of communication costs, 40% to Student Connect and 60% to Nueva Tech. | |
On March 3, 2014, the Company issued 36,000,000 shares of its common stock in conversion of loans payable in the amount of $1,800. | |
On March 5, 2014, the Company issued 169,000,000 shares of its common stock in conversion of loans payable in the amount of $9,000. | |
On March 6, 2014, the Company issued 177,400,000 shares of its common stock in conversion of loans payable in the amount of $5,000. | |
On March 11, 2014, the Company issued 294,000,000 shares of its common stock in conversion of loans payable in the amount of $14,700. | |
On March 17, 2014, the Company issued a $29,000 unsecured convertible promissory note to LG Capital Funding, LLC. The note bears interest at 8% per annum, is due March 17, 2015, and is convertible at a 50% discount to the lowest closing bid price during the fifteen day period prior to the conversion date. | |
On March 20, 2014, the Company’s subsidiary, Student Connect, Inc. (“Student Connect”), entered into a service agreement with a school district in Texas to provide its proprietary school transportation monitoring system. The agreement is cancellable by the school district upon 30 days’ notice. Student Connect provides the equipment and monitoring service at a no cost to the school district. The system provides instant notification to schools and parents about students riding on the school buses. Messages are delivered to schools and parents at no cost and are funded through advertisers who sponsor each message sent to the parent about their child. | |
On March 21, 2014, the Company issued 194,000,000 shares of its common stock in conversion of loans payable in the amount of $9,700. | |
On March 24, 2014, the Company issued 100,000,000 shares of its common stock in conversion of loans payable in the amount of $7,000. | |
On March 25, 2014, the Company issued 572,190,277 shares of its common stock in conversion of loans payable in the amount of $33,796. | |
On March 26, 2014, the Company issued 314,285,714 shares of its common stock in conversion of loans payable in the amount of $16,400. | |
On March 27, 2014, the Company’s subsidiary, Student Connect, Inc. (“Student Connect”), entered into a 5 year licensing agreement with Smart1st, a Beirut, Lebanon corporation. Under the terms of the agreement, Smart1st is appointed a Master Distributor of the Company’s products and granted an exclusive license to sell the products in the country of Lebanon. All advertisement revenue generated will be shared, net of communication costs, 40% to Student Connect and 60% to Smart1st. | |
On March 27, 2014, the Company issued a $23,000 unsecured promissory note to Frank Russo. The note is non-interest bearing and is due October 1, 2014. | |
On March 27, 2014, the Company issued a $18,000 unsecured convertible promissory note to Tangiers Investment Group, LLC. The note bears interest at 8% per annum, is due March 17, 2015, and is convertible at the lower of i) $0.0001 or ii) a 50% discount to the trading price during the twenty day period prior to the conversion date. | |
On March 28, 2014, the Company issued 369,872,800 shares of its common stock in conversion of loans payable in the amount of $18,494. | |
On March 28, 2014, the Company filed a certificate of amendment to the Company’s Articles of Incorporation with the Secretary of State of Nevada to increase the Company’s authorized capital stock to 13,500,000,000 shares, par value $0.001 per share, including (i) 13,000,000,000 shares of common stock, par value $0.001 per share and (ii) 500,000,000 shares of preferred stock, par value $0.001 per share. | |
On March 31, 2014, the Company issued 200,000,000 shares of its common stock in conversion of loans payable in the amount of $5,904. | |
On April 1, 2014, the Company’s subsidiary, Student Connect, Inc. (“Student Connect”), entered into a service agreement with a school district in California to provide its proprietary school transportation monitoring system. The agreement is cancellable by the school district upon 30 days’ notice. Student Connect provides the equipment and monitoring service at a no cost to the school district. The system provides instant notification to schools and parents about students riding on the school buses. Messages are delivered to schools and parents at no cost and are funded through advertisers who sponsor each message sent to the parent about their child. | |
On April 1, 2014, the Company issued 250,000,000 shares of its common stock in conversion of loans payable in the amount of $12,500. | |
On April 1, 2014, the Company issued 15,000,000 shares of its common stock to a related party for $4,500 in cash received in 2013. The amount was recorded as common stock issuable at December 31, 2013. | |
On April 1, 2014, the Company issued 75,000 shares of its Series A preferred stock to a third party for $1,500 in cash received in 2013. The amount was recorded in preferred stock issuable at December 31, 2013. | |
On April 7, 2014, the Company issued 821,007,589 shares of its common stock in conversion of loans payable in the amount of $39,541. | |
On April 10, 2014, the Company issued 46,500,000 shares of its Series A preferred stock to a third party for $108,000 in cash received in 2013. The amount was recorded in preferred stock issuable at December 31, 2013. | |
On April 8, 2014, the Company issued a $12,500 unsecured convertible promissory note to Microcap Equity Group LLC. The note bears interest at 12% per annum, is due October 8, 2014, and is convertible at a 50% discount to the lowest bid price during the ninety day period prior to the conversion date. | |
The Company has evaluated subsequent events through the date the financial statements were issued and filed with Securities and Exchange Commission. The Company has determined that there are no other events that warrant disclosure or recognition in the financial statements. | |
2_Summary_of_Significant_Accou1
2. Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||
Dec. 31, 2013 | |||
Summary Of Significant Accounting Policies Policies | ' | ||
Use of Estimates | ' | ||
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates in the accompanying consolidated financial statements include the amortization period for intangible assets, impairment valuation of intangible assets, depreciable lives of the website and property and equipment, valuation of share-based payments and the valuation allowance on deferred tax assets. Actual results could differ from those estimates and would impact future results of operations and cash flows. | |||
Principles of Consolidation | ' | ||
The consolidated financial statements include the accounts of East Coast Diversified Corporation and its majority-owned subsidiary, EarthSearch Communications International, Inc., and its wholly-owned subsidiaries StudentConnect Inc. and WetWinds Inc. Due to the dispute with the management of Rogue Paper, the balances and results of operations of Rogue Paper, Inc. as of and for the nine months ended September 30, 2012 are presented in the consolidated financial statements in the manner of a discontinued operation as of and for the years ended December 31, 2013 and 2012. All significant inter-company balances and transactions have been eliminated in consolidation. | |||
Cash and Cash Equivalents | ' | ||
The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At December 31, 2013 and 2011, respectively, the Company had no cash equivalents. | |||
Concentration of Credit Risk | ' | ||
The Company grants unsecured credit to commercial and governmental customers in the United States and abroad. Accounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts. As of December 31, 2012, two customers account for 79% of the total accounts receivable. | |||
The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance based on historical write-off experience, customer specific facts and economic conditions. Bad debt expense was $3,296 and $604,735 for the years ended December 31, 2013 and 2012, respectively. At December 31, 2013 and 2012, the allowance for doubtful accounts was $nil and $604,735, respectively. | |||
Outstanding account balances are reviewed individually for collectability. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance sheet credit exposure to its customers. | |||
Inventories | ' | ||
Inventories are stated at the lower of cost or market (“LCM”). The Company uses the first-in-first-out (“FIFO”) method of valuing inventory. Inventory consists primarily of finished goods and accessories for resale. | |||
Property and Equipment | ' | ||
Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation of property and equipment is computed by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful lives ranging from 5 years to 7 years. Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statements of operations. Leasehold improvements are amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever is shorter. | |||
Depreciation expense was $3,861 and $6,704 for the years ended December 31, 2013 and 2012, respectively | |||
Goodwill and other intangible assets | ' | ||
Goodwill represents the excess of acquisition consideration paid over the fair value of identifiable net tangible and identifiable intangible assets acquired. Goodwill and other indefinite-lived intangible assets are not amortized, but are reviewed for impairment at least annually, in the fourth quarter, or earlier upon the occurrence of certain triggering events. | |||
Goodwill is allocated among and evaluated for impairment at the reporting unit level. Management evaluates goodwill for impairment using a two-step process provided by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350, Intangibles — Goodwill and Other. The first step is to compare the fair value of each of our reporting units to their respective book values, including goodwill. If the fair value of a reporting unit exceeds its book value, reporting unit goodwill is not considered impaired and the second step of the impairment test is not required. If the book value of a reporting unit exceeds its fair value, the second step of the impairment test is performed to measure the amount of impairment loss, if any. The second step of the impairment test compares the implied fair value of the reporting unit’s goodwill with the book value of that goodwill. If the book value of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. Intangible assets with determinable useful lives are amortized using the straight-line method over the expected life of the assets. | |||
Amortization of intangible assets was $nil and $114,750 for the years ended December 31, 2013 and 2012, respectively. Due to the dispute with Rogue Paper, the Company has deemed that the unamortized balance of the intangible assets as of September 30, 2012 of $624,750 and the goodwill of $742,107 have been fully impaired and charged to expense as of December 31, 2012. | |||
Impairment or Disposal of Long-Lived Assets | ' | ||
The Company accounts for the impairment or disposal of long-lived assets according to ASC 360 “Property, Plant and Equipment”. ASC 360 clarifies the accounting for the impairment of long-lived assets and for long-lived assets to be disposed of, including the disposal of business segments and major lines of business. Long-lived assets are reviewed when facts and circumstances indicate that the carrying value of the asset may not be recoverable. When necessary, impaired assets are written down to estimate fair value based on the best information available. Estimated fair value is generally based on either appraised value or measured by discounting estimated future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such estimates. | |||
Research and Development Costs | ' | ||
The Company accounts for research and development costs in accordance with ASC 730 “Research and Development”. ASC 730 requires that research and development costs be charged to expense when incurred. Research and development costs charged to expense were $580,119 and $378,383 for the years ended December 31, 2013 and 2012, respectively. | |||
Prior to the adoption of ASC 730, costs incurred internally in researching and developing computer software products were charged to expense until technological feasibility has been established for the product. Once technological feasibility is established, all software costs are capitalized until the product is available for general release to customers. Judgment is required in determining when technological feasibility of a product is established. We have determined that technological feasibility for our software products is reached after all high-risk development issues have been resolved through coding and testing Generally, this occurs shortly before products which will utilize the software are released to manufacturing which occurred in January 2007. The amortization of these costs is included in general and administrative expense over the estimated life of the software, which is estimated to be 3 years. | |||
The Company capitalized no research and development costs during the years ended December 31, 2013 and 2012, respectively. The Company recorded amortization expense of $nil and $9,273 for the years ended December 31, 2013 and 2012, respectively. | |||
Fair Value of Financial Instruments | ' | ||
FASB ASC 820, Fair Value Measurements and Disclosures, establishes a framework for measuring fair value and expands disclosures about fair value measurements. FASB ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820 states that a fair value measurement should be determined based on the assumptions the market participants would use in pricing the asset or liability. In addition, FASB ASC 820 specifies a hierarchy of valuation techniques based on whether the types of valuation information (“inputs”) are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. | |||
The three broad levels defined by FASB ASC 820 hierarchy are as follows: | |||
Level 1 – quoted prices for identical assets or liabilities in active markets. | |||
Level 2 – pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. | |||
Level 3 – valuations derived from methods in which one or more significant inputs or significant value drivers are unobservable in the markets. | |||
These financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment to estimation. Valuations based on unobservable inputs are highly subjective and require significant judgments. Changes in such judgments could have a material impact on fair value estimates. In addition, since estimates are as of a specific point in time, they are susceptible to material near-term changes. Changes in economic conditions may also dramatically affect the estimated fair values. | |||
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2012. The respective carrying value of certain financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accounts receivable, inventory, accounts payable and accrued expenses and accrued compensation. The fair value of the Company’s loans payable is estimated based on current rates that would be available for debt of similar terms which is not significantly different from its stated value. | |||
Revenue Recognition | ' | ||
The Company generates revenue through three processes: (1) Sale of its RFID/GPS products, (2) Fees for consulting services provided to its customers, and (3) Service Fees for the use of its advanced web based asset management platform. | |||
· | Revenue for RFID/GPS products is recognized when shipments are made to customers. The Company recognizes a sale when the product has been shipped and risk of loss has passed to the customer. | ||
· | Revenue for consulting services is recognized when the services have been performed. | ||
· | Revenue for service fees is recognized ratably over the term of the use agreement. | ||
Stock-Based Compensation | ' | ||
The Company accounts for Employee Stock-Based Compensation under ASC 718 “Compensation – Stock Compensation”, which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 is a revision to SFAS No. 123, “Accounting for Stock-Based Compensation”, and supersedes Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees”, and its related implementation guidance. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized. The Company has not granted any stock options as of December 31, 2013. | |||
The Company accounts for stock-based compensation awards to non-employees in accordance with ASC 505-50 “Equity-Based Payments to Non-Employees” (“ASC 505-50”). Under ASC 505-50, the Company determines the fair value of the warrants or stock-based compensation awards granted as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Any stock options issued to non-employees are recorded in expense and additional paid-in capital in shareholders' equity/(deficit) over the applicable service periods using variable accounting through the vesting dates based on the fair value of the options at the end of each period. | |||
Income Taxes | ' | ||
Income taxes are accounted for under the liability method of accounting for income taxes. Under the liability method, future tax liabilities and assets are recognized for the estimated future tax consequences attributable to differences between the amounts reported in the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Future tax assets and liabilities are measured using enacted or substantially enacted income tax rates expected to apply when the asset is realized or the liability settled. The effect of a change in income tax rates on future income tax liabilities and assets is recognized in income in the period that the change occurs. Future income tax assets are recognized to the extent that they are considered more likely than not to be realized. | |||
The Financial Accounting Standards Board (FASB) has issued ASC 740 “Income Taxes” (formerly, Financial Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” – An Interpretation of FASB Statement No. 109 (FIN 48)). ASC 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with prior literature FASB Statement No. 109, Accounting for Income Taxes. This standard requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. | |||
As a result of the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by FASB ASC 740 and concluded that the tax position of the Company has not met the more-likely-than-not threshold as of December 31, 2013. | |||
Basic and Diluted Loss Per Share | ' | ||
The Company computes income (loss) per share in accordance with ASC 260, “Earnings per Share”, which requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the statement of operations. Basic EPS is computed by dividing income (loss) available to common shareholders by the weighted average number of shares outstanding during the period. Diluted EPS gives effect to all dilutive potential shares of common stock outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. | |||
As of December 31, 2013 and 2012, there were $532,958 and $364,459, respectively, of convertible notes payable which are convertible at various conversion rates and 285,487,091 shares of convertible preferred stock which are convertible into 5,709,741,820 common shares. However, these potentially dilutive shares are considered to be anti-dilutive and are therefore not included in the calculation of net loss per share. | |||
Segment Information | ' | ||
In accordance with the provisions of ASC 280-10, “Disclosures about Segments of an Enterprise and Related Information”, the Company is required to report financial and descriptive information about its reportable operating segments. The Company operates in only one operating segment as of December 31, 2013. |
4_Disputed_Subsidiary_Tables
4. Disputed Subsidiary (Tables) | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Disputed Subsidiary | ' | ||||||
Results of Rogue Paper included in the income (loss) from disputed subsidiary | ' | ||||||
Year Ended December 31, | |||||||
2013 | 2012 | ||||||
Revenue | $ | – | $ | 322,000 | |||
Operating expenses: | |||||||
Cost of revenue | – | 135,221 | |||||
Selling, general and administrative expenses | – | 270,793 | |||||
Amortization of intangible assets | – | 114,750 | |||||
Total operating expenses | – | 520,764 | |||||
Income (loss) from disputed subsidiary | – | (198,764 | ) | ||||
Other expenses: | |||||||
Other income | – | (44 | ) | ||||
Impairment of intangible assets | – | 624,750 | |||||
Impairment of goodwill | – | 742,107 | |||||
Net income (loss) from loss from disputed subsidiary | $ | – | $ | (1,565,577 | ) | ||
Major classes of assets and liabilities of disputed subsidiary on the balance sheet | ' | ||||||
December 31, | |||||||
2013 | 2012 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash | $ | 70,951 | $ | 70,951 | |||
Accounts receivable | 27,480 | 27,480 | |||||
Prepaid expenses | 1,000 | 1,000 | |||||
Total current assets | 99,431 | 99,431 | |||||
Property and equipment, net | 7,840 | 7,840 | |||||
Total assets of discontinued operations | $ | 107,271 | $ | 107,271 | |||
LIABILITIES | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 11,116 | $ | 11,116 | |||
Total liabilities of discontinued operations | $ | 11,116 | $ | 11,116 |
5_Loans_Payable_Tables
5. Loans Payable (Tables) | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Loans Payable Tables | ' | ||||||
Loans payable | ' | ||||||
December 31, | December 31, | ||||||
2013 | 2012 | ||||||
Unsecured $30,000 convertible note payable to Hanover Holdings I, LLC, which bears interest at 12% per annum and was due October 17, 2012. During the year ended December 31, 2012, $28,000 of the note balance was converted to common stock. During the year ended December 31, 2013, the remaining $2,000 of the note was converted to common stock. Accrued interest is equal to $2.905 and $2,750 at December 31, 2013 and 2012, respectively. | $ | 2,905 | $ | 4,750 | |||
On February 17, 2012, Panache Capital, LLC entered into an agreement to purchase $50,000 of the note payable to Azfar Haque. The Company exchanged the original note to Mr. Haque with a new note to Pananche which bears interest at 10% per annum and was due February 17, 2013. During the year ended December 31, 2012, $44,348 of the note was converted to common stock. Accrued interest is equal to $1,396 and $786 at December 31, 2013 and 2012, respectively. This note is in default at December 31, 2013. | 7,048 | 6,438 | |||||
Unsecured $70,000 convertible note payable to Hanover Holdings I, LLC, which bears interest at 12% per annum and due was October 24 2013. The note is discounted for its unamortized beneficial conversion feature of $-0- and $27,575 at December 31, 2013 and 2012, respectively. Accrued interest is equal to $16,244 and $7,309 at December 31, 2013 and 2012, respectively. This note is in default at December 31, 2013. | 86,244 | 49,734 | |||||
Unsecured $16,000 convertible note payable to Hanover Holdings I, LLC, which bears interest at 12% per annum and was due May 3, 2013. The note is discounted for its unamortized beneficial conversion feature of $-0- and $4,492 at December 31, 2013 and 2012. Accrued interest is equal to $3,317 and $1,297 at December 31, 2013 and 2012, respectively. This note is in default at December 31, 2013. | 19,317 | 12,805 | |||||
Unsecured $10,000 convertible note payable to Hanover Holdings I, LLC, which bears interest at 12% per annum and was due January 3, 2013. The note is discounted for its unamortized beneficial conversion feature of $-0- and $535 at December 31, 2013 and 2012, respectively. During the year ended December 31, 2013, the note balance of $10,952. including accrued interest, was converted to common stock. Accrued interest is equal to $766 at December 31, 2012. | – | 10,231 | |||||
Unsecured $3,000 convertible note payable to Hanover Holdings I, LLC, which bears interest at 12% per annum and was due January 21, 2013. During the year ended December 31, 2013, the note, including accrued interest of $1,770, was converted to common stock. Accrued interest is equal to $13 at December 31, 2012. | – | 3,013 | |||||
Unsecured $12,000 convertible note payable to Hanover Holdings I, LLC, which bears interest at 12% per annum and was due February 5, 2013. During the year ended December 31, 2013, $6,210 of the note was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $-0- and $1,433 at December 31, 2013 and 2012, respectively. Accrued interest is equal to $1,970 and $839 at December 31, 2013 and 2012, respectively. This note is in default at December 31, 2013. | 7,760 | 11,406 | |||||
December 31, | December 31, | ||||||
2013 | 2012 | ||||||
Unsecured $32,500 convertible note payable to Asher Enterprises, Inc., which bears interest at 8% per annum and was due February 25, 2012. During the year ended December 31, 2012, $12,000 of the note was converted to common stock. During the year ended December 31, 2013, the remaining $21,800 was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $3,092 at December 31, 2012. Accrued interest is equal to $1,600 at December 31, 2012. | – | 19,008 | |||||
Unsecured $5,500 convertible note payable to Hanover Holdings I, LLC, which bears interest at 12% per annum and was due March 6, 2013. During the year ended December 31, 2013, the note balance of $6,050 was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $1,099 at December 31, 2012. Accrued interest is equal to $328 at December 31, 2012. | – | 4,729 | |||||
Unsecured $42,500 convertible note payable to Asher Enterprises, Inc., which bears interest at 8% per annum and was due April 19, 2013. During the year ended December 31, 2013, the entire balance of the note in the amount of $44,200 was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $13,379 at December 31, 2012. Accrued interest is equal to $1,579 at December 31, 2012. | – | 30,700 | |||||
Unsecured $15,000 convertible note payable to Hanover Holdings I, LLC, which bears interest at 12% per annum and was due March 26, 2013. The note is discounted for its unamortized beneficial conversion feature of $-0- and $3,484 at December 31, 2013 and 2012, respectively. Accrued interest is equal to $2,663 and $794 at December 31, 2013 and 2012, respectively. This note is in default at December 31, 2013. | 17,663 | 12,310 | |||||
On November 2, 2011, the Company entered into a Unsecured Convertible Promissory Note Agreement with Bulldog Insurance for up to $250,000, which bears interest at 8% per annum. On August 3, 2012, the Company received $18,350, which was due March 31, 2013. The draw on the note is discounted for its unamortized beneficial conversion feature of $2,741 at December 31, 2012. During the year ended December 31, 2012, $516 of the note was purchased by StarCity Capital, LLC. During the year ended December 31, 2013, the note balance of $19,168 was purchased by Tangiers Investment Group, LLC. Accrued interest is equal to $381 at December 31, 2012. | – | 15,474 | |||||
On November 2, 2011, the Company entered into a Unsecured Convertible Promissory Note Agreement with Bulldog Insurance for up to $250,000, which bears interest at 8% per annum. On August 20, 2012, the Company received $10,000, which was due March 31, 2013. The draw on the note is discounted for its unamortized beneficial conversion feature of $1,514 at December 31, 2012. During the year ended December 31, 2013, the note balance of $10,300 was purchased by SGI Group, LLC. Accrued interest is equal to $183 at December 31, 2012. | – | 8,669 | |||||
December 31, | December 31, | ||||||
2013 | 2012 | ||||||
On November 2, 2011, the Company entered into a Unsecured Convertible Promissory Note Agreement with Bulldog Insurance for up to $250,000, which bears interest at 8% per annum. On August 27, 2012, the Company received $40,000, which was due March 31, 2013. The draw on the note is discounted for its unamortized beneficial conversion feature of $7,143 at December 31, 2012. During the year ended December 31, 2013, the note balance of $40,000 was purchased by WHC Capital, LLC. Accrued interest is equal to $699 at December 31, 2012. | – | 33,556 | |||||
Unsecured $10,000 convertible note payable to Southridge Partners II LP, which bears interest at 5% per annum and was due March 31, 2013. During the year ended December 31, 2013, the note, including accrued interest of $399, was converted to common stock. | – | 8,097 | |||||
On November 2, 2011, the Company entered into a Unsecured Convertible Promissory Note Agreement with Bulldog Insurance for up to $250,000, which bears interest at 8% per annum. On September 5, 2012, the Company received $4,100, which was due March 31, 2013. The draw on the note is discounted for its unamortized beneficial conversion feature of $891 at December 31, 2012. During the year ended December 31, 2013, the note balance of $4,264 was purchased by Tangiers Investment Group, LLC. Accrued interest is equal to $66 at December 31, 2012. | – | 3,275 | |||||
Unsecured $40,000 convertible note payable to Southridge Partners II LP, which bears interest at 5% per annum and was due March 31, 2013. The note is discounted for its unamortized beneficial conversion feature of $-0- and $6,154 at December 31, 2013 and 2012, respectively. Accrued interest is equal to $4,191 and $925 at December 31, 2013 and 2012, respectively. This note is in default at December 31, 2013. | 44,191 | 34,771 | |||||
Unsecured $15,000 note payable to SC Advisors, Inc., which bears interest at 8% per annum and was due June 30, 2013. Accrued interest is equal to $1,520 and $299 at December 31, 2013 and 2012, respectively. This note is in default at December 31, 2013. | 16,520 | 15,299 | |||||
Unsecured $10,000 convertible note payable to Southridge Partners II LP, which bears interest at 8% per annum and was due June 30, 2013. During the year ended December 31, 2013, the note, including accrued interest, was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $6,704 at December 31, 2012. Accrued interest is equal to $195 at December 31, 2012. | – | 3,491 | |||||
On November 2, 2011, the Company entered into a Unsecured Convertible Promissory Note Agreement with Bulldog Insurance for up to $250,000, which bears interest at 8% per annum. On October 24, 2012, the Company received $5,000, which was due May 24, 2013. The draw on the note is discounted for its unamortized beneficial conversion feature of $1,456 at December 31, 2012. During the year ended December 31, 2013, the note balance of $5,169 was purchased by Tangiers Investment Group, LLC. Accrued interest is equal to $75 at December 31, 2012. | – | 3,619 | |||||
Unsecured $39,647 note payable to Azfar Hague, which bears interest at 9% per annum and was due April 25, 2013. $20,000 of this note was purchased by Tangiers Investment Group, LLC on July 26, 2013. Accrued interest is equal to $3,379 and $655 at December 31, 2013 and 2012, respectively. This note is in default at December 31, 2013. | 23,026 | 40,302 | |||||
December 31, | December 31, | ||||||
2013 | 2012 | ||||||
Unsecured $15,000 note payable to SC Advisors, Inc., which bears interest at 8% per annum and was due June 30, 2013. Accrued interest is equal to $1,398 and $181 at December 31, 2013 and 2012, respectively. This note is in default at December 31, 2013. | 16,398 | 15,181 | |||||
Unsecured $7,000 convertible note payable to Southridge Partners II LP, which bears interest at 8% per annum and was due September 30, 2013. During the year ended December 31, 2013, the note, including accrued interest, was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $5,415 at December 31, 2012. Accrued interest is equal to $81 at December 31, 2012. | – | 1,666 | |||||
Unsecured $32,500 convertible note payable to Asher Enterprises, Inc., which bears interest at 8% per annum and was due August 13, 2013. During the year ended December 31, 2013, $3,300 of the note was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $-0- and $24,932 at December 31, 2013 and 2012, respectively. Accrued interest is equal to $2,874 and $370 at December 31, 2013 and 2012, respectively. This note is in default at December 31, 2013. | 32,074 | 7,938 | |||||
On November 2, 2011, the Company entered into a Unsecured Convertible Promissory Note Agreement with Bulldog Insurance for up to $250,000, which bears interest at 8% per annum. On November 15, 2012, the Company received $10,000, which was due May 15, 2013. The draw on the note is discounted for its unamortized beneficial conversion feature of $3,309 at December 31, 2012. During the year ended December 31, 2013, the note was purchased by WHC Capital, LLC. Accrued interest is equal to $109 at December 31, 2012. | – | 7,150 | |||||
Unsecured $18,000 convertible note payable to Southridge Partners II LP, which bears interest at 8% per annum and was due June 30, 2013. During the year ended December 31, 2013, the note balance of $19,174, including accrued interest, was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $15,296 at December 31, 2012. Accrued interest is equal to $126 at December 31, 2012. | – | 2,830 | |||||
Unsecured $9,000 convertible note payable to Star City Capital LLC, which bears interest at 12% per annum and was due December 3, 2013. The note is discounted for its unamortized beneficial conversion feature of $-0- and $8,220 at December 31, 2013 and 2012, respectively. Accrued interest is equal to $1,179 and $83 at December 31, 2013 and 2012, respectively. This note is in default at December 31, 2013. | 10,179 | 863 | |||||
Unsecured $15,000 note payable to SC Advisors, Inc., which bears interest at 8% per annum and was due June 30, 2013. Accrued interest is equal to $1,312 and $99 at December 31, 2013 and 2012, respectively. This note is in default at December 31, 2013. | 16,312 | 15,099 | |||||
Unsecured $25,000 convertible note payable to Southridge Partners II LP, which bears interest at 8% per annum and was due June 30, 2013. The note is discounted for its unamortized beneficial conversion feature of $-0- and $22,625 at December 31, 2013 and 2012, respectively. Accrued interest is equal to $2,125 and $104 at December 31, 2013 and 2012, respectively. This note is in default at December 31, 2013. | 27,125 | 2,479 | |||||
December 31, | December 31, | ||||||
2013 | 2012 | ||||||
On December 12, 2012, Star City Capital LLC entered into an agreement to purchase $19,700 of a note payable to Bulldog Insurance. The note bears interest at 8% per annum and is due on demand. During the year ended December 31, 2013, $18,018 of the note, including accrued interest, was converted to common stock. Accrued interest is equal to $-0- and $51 at December 31, 2013 and 2012, respectively. | 2,407 | 19,751 | |||||
Unsecured $7,500 convertible note payable to Southridge Partners II LP, which bears interest at 8% per annum and was due June 30, 2013. During the year ended December 31, 2013, the entire note balance, including accrued interest, of $8,000 was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $7,378 at December 31, 2012. Accrued interest is equal to $5 at December 31, 2012. | – | 127 | |||||
Unsecured $32,500 convertible note payable to Asher Enterprises, Inc., which bears interest at 8% per annum and was due November 1, 2013. Accrued interest is equal to $2,351. This note is in default at December 31, 2013. | 34,851 | – | |||||
Unsecured $35,000 convertible note payable to Lucosky Brookman LLP, which bears interest at 12% per annum and due on demand. Accrued interest is equal to $3,378. | 38,378 | – | |||||
Unsecured $43,922 convertible note payable to Lucosky Brookman LLP, which bears interest at 12% per annum and due on demand. Accrued interest is equal to $4,238. | 48,160 | – | |||||
Unsecured $32,500 convertible note payable to Asher Enterprises, Inc., which bears interest at 8% per annum and is due January 31, 2014. The note is discounted for its unamortized beneficial conversion feature of $3,501 at December 31, 2013. Accrued interest is equal to $1,752. | 30,751 | – | |||||
Unsecured $7,000 note payable to Andre Fluellen, which calls for flat interest of $1,500 at maturity and was due October 30, 2013. This note is in default at December 31, 2013. | 8,500 | – | |||||
On May 6, 2013, WHC Capital, LLC entered into an agreement to purchase $50,000 of notes payable to Bulldog Insurance. The note bears interest at 8% per annum and is due March 6, 2014. During the year ended December 31, 2013, $20,612 of the note was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $8,748 at December 31, 2013. Accrued interest is equal to $3,297 at December 31, 2013. | 23,937 | – | |||||
Unsecured $20,000 convertible note payable to WHC Capital, LLC., which bears interest at 8% per annum and due March 9, 2014. The note is discounted for its unamortized beneficial conversion feature of $3,661 at December 31, 2013. Accrued interest is equal to $1,034. | 17,373 | – | |||||
Unsecured $32,500 convertible note payable to Asher Enterprises, Inc., which bears interest at 8% per annum and is due March 3, 2014. The note is discounted for its unamortized beneficial conversion feature of $6,316 at December 31, 2013. Accrued interest is equal to $1,531. | 27,715 | – | |||||
Unsecured $7,500 note payable to Andre Fluellen, which calls for flat interest of $1,400 at maturity and was due December 1, 2013. This note is in default at December 31, 2013. | 8,900 | – | |||||
Unsecured $10,000 note payable to Sammie Hill, III, which calls for flat interest of $2,000 at maturity and was due December 15, 2013. This note is in default at December 31, 2013. | 12,000 | – | |||||
Unsecured $5,000 convertible note payable to Tangiers Investment Group, LLC., which bears interest at 10% per annum and is due June 21, 2014. The note is discounted for its unamortized beneficial conversion feature of $2,356 at December 31, 2013. Accrued interest is equal to $264. | 2,908 | – | |||||
December 31, | December 31, | ||||||
2013 | 2012 | ||||||
Unsecured $12,000 note payable to Bulldog Insurance, which bears interest at 7% per annum and was due December 1, 2013. Accrued interest is equal to $433. This note is in default at December 31, 2013. | 12,433 | – | |||||
Unsecured $3,000 note payable to Andre Fluellen, which calls for flat interest of $500 at maturity and was due December 1, 2013. This note is in default at December 31, 2013. | 3,500 | – | |||||
Unsecured $3,000 note payable to Andre Fluellen, which calls for flat interest of $500 at maturity and is due February 22, 2014. Accrued interest is equal to $106. | 3,106 | – | |||||
Unsecured $14,500 convertible note payable to Asher Enterprises, Inc., which bears interest at 8% per annum and is due May 5, 2014. The note is discounted for its unamortized beneficial conversion feature of $6,202 at December 31, 2013. Accrued interest is equal to $457. | 8,755 | – | |||||
Unsecured $8,500 non-interest bearing note payable to Azfar Hague due February 5, 2014. | 8,500 | – | |||||
Unsecured $10,000 non-interest bearing note payable to Azfar Hague due February 20, 2014. | 10,000 | – | |||||
Unsecured $8,500 note payable to Bulldog Insurance, which bears interest at 5% per annum and due February 28, 2014. Accrued interest is equal to $142. | 8,642 | – | |||||
Unsecured $6,500 convertible note payable to Tangiers Investment Group, LLC., which bears interest at 10% per annum and is due July 25, 2014. The note is discounted for its unamortized beneficial conversion feature of $3,668 at December 31, 2013. Accrued interest is equal to $283. | 3,115 | – | |||||
On July 26, 2013, Tangiers Investment Group, LLC entered into an agreement to purchase $20,000 of notes payable to Azfar Hague. The note bears interest at 10% per annum and is due July 26, 2014. The note is discounted for its unamortized beneficial conversion feature of $11,342 at December 31, 2013. Accrued interest is equal to $866. | 9,524 | – | |||||
Unsecured $5,000 convertible note payable to Tangiers Investment Group, LLC., which bears interest at 10% per annum and due August 2, 2014. The note is discounted for its unamortized beneficial conversion feature of $2,1931 at December 31, 2013. Accrued interest is equal to $207. | 2,276 | – | |||||
Unsecured $5,000 convertible note payable to WHC Capital, LLC., which bears interest at 8% per annum and is due August 12, 2014. The note is discounted for its unamortized beneficial conversion feature of $3,068 at December 31, 2013. Accrued interest is equal to $155. | 2,087 | – | |||||
On January 3, 2013, Black Arch Opportunity Fund LP entered into an agreement to purchase $18,737 of notes payable to Bulldog Insurance. The note bears interest at 12% per annum and is was due December 1, 2013. During the year ended December 31, 2013, $9,466 of the note, including accrued interest, was converted to common stock. Accrued interest is equal to $1,088. This note is in default at December 31, 2013. | 11,265 | – | |||||
Unsecured $20,000 convertible note payable to CJ Mosley, which calls for flat interest of $1,800 due at maturity and is due April 28, 2014. The note is discounted for its unamortized beneficial conversion feature of $5,650 at December 31, 2013. Accrued interest is equal to $600. | 14,950 | ||||||
Total Loans Payable | $ | 680,795 | $ | 404,761 |
6_Related_Parties_Tables
6. Related Parties (Tables) | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Related Parties Tables | ' | ||||||
Loans payable related parties | ' | ||||||
December 31, | December 31, | ||||||
2013 | 2012 | ||||||
Unsecured non-interest bearing notes payable, due on demand, to Frank Russo, a shareholder and former Director of the Company. During the year ended December 31, 2013, $60,000 of the note balance was converted to Series A preferred stock. | $ | 301,429 | $ | 354,979 | |||
Unsecured notes payable to Edward Eppel, a shareholder and Director of the Company, which bears interest at 10% per annum and is due on demand. During the year ended December 31, 2013, $80,000 of the note was converted to Series A preferred stock. Accrued interest is equal to $60,789 and $31,374, respectively. | 189,950 | 184,930 | |||||
Unsecured $20,000 note payable to Robert Saidel, which bears interest at 7% per annum and due December 1, 2013. Accrued interest is equal to $848. This note is in default at December 31, 2013. | 20,848 | – | |||||
Unsecured $7,500 note payable to Robert Saidel, which bears interest at 7% per annum and due January 8, 2014. Accrued interest is equal to $253. | 7,753 | – | |||||
Unsecured $10,000 note payable to Robert Saidel, which bears interest at 7% per annum and due February 16, 2014. Accrued interest is equal to $262. | 10,262 | – | |||||
Unsecured $4,000 note payable to Robert Saidel, which bears interest at 7% per annum and due March 9, 2014. Accrued interest is equal to $87. | 4,087 | – | |||||
Unsecured $137,833 note payable to Robert Saidel, which bears interest at 7% per annum and due April 25, 2014. Accrued interest is equal to $1,535. | 139,368 | ||||||
Total | 673,697 | 539,909 | |||||
Less current portion | (601,348 | ) | – | ||||
Loan payable - related parties, non-current | $ | 72,349 | $ | 539,909 |
9_Income_Taxes_Tables
9. Income Taxes (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Schedule of Effective Income Tax Rate Reconciliation | ' | ||||||||
Year Ended December 31, | |||||||||
2013 | 2012 | ||||||||
Expected income tax (benefit) at 34% statutory rate | -34.00% | -34.00% | |||||||
Permanent tax differences | 7.20% | 4.60% | |||||||
Timing differences | 0.00% | 0.00% | |||||||
Change in valuation allowance | 26.80% | 29.40% | |||||||
Actual tax expense | 0.00% | 0.00% | |||||||
Schedule of Deferred Tax Assets and Liabilities | ' | ||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Deferred income tax assets: | |||||||||
Net operating loss carry forwards | $ | 7,043,090 | $ | 6,423,760 | |||||
Valuation allowance | (7,043,090 | ) | (6,423,760 | ) | |||||
Net deferred income tax assets | $ | – | $ | – |
10_Commitments_and_Contingenci1
10. Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments And Contingencies Tables | ' | ||||
Future minimum lease payments | ' | ||||
2014 | 27,550 | ||||
2015 | 28,366 | ||||
2016 | 29,219 | ||||
2017 | 15,054 | ||||
$ | 100,189 |
1_Nature_of_Business_Presentat1
1. Nature of Business, Presentation, and Going Concern (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Accumulated deficit | $21,096,462 | $18,812,108 |
Net loss | 2,284,354 | 5,749,513 |
Net cash used in operation | $904,919 | $1,489,457 |
2_Summary_of_Significant_Accou2
2. Summary of Significant Accounting Policies (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Summary Of Significant Accounting Policies Details Narrative | ' | ' |
Bad debt expense | $3,296 | $604,735 |
Allowance for doubtful accounts | 0 | 604,735 |
Concentration of risk | ' | 79.00% |
Depreciation expense | 3,861 | 6,704 |
Research and development costs | $580,119 | $378,383 |
4_Disputed_Subsidiary_Details
4. Disputed Subsidiary (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Revenue | $180,271 | $715,986 |
Operating expenses: | ' | ' |
Cost of revenue | 24,993 | 62,648 |
Selling, general and administrative expenses | 1,939,762 | 3,290,204 |
Amortization of intangible assets | 50,000 | 50,000 |
Total operating expenses | 2,067,187 | 3,687,389 |
Income (loss) from disputed subsidiary | -1,886,916 | -2,971,403 |
Other expenses: | ' | ' |
Net income (loss) from loss from disputed subsidiary | -2,284,354 | -5,749,513 |
Rogue Paper | ' | ' |
Revenue | 0 | 322,000 |
Operating expenses: | ' | ' |
Cost of revenue | 0 | 135,221 |
Selling, general and administrative expenses | 0 | 270,793 |
Amortization of intangible assets | 0 | 114,750 |
Total operating expenses | 0 | 520,764 |
Income (loss) from disputed subsidiary | 0 | -198,764 |
Other expenses: | ' | ' |
Other income | 0 | -44 |
Impairment of intangible assets | 0 | 624,750 |
Impairment of goodwill | 0 | 742,107 |
Net income (loss) from loss from disputed subsidiary | $0 | ($1,565,577) |
4_Disputed_Subsidiary_Details_
4. Disputed Subsidiary (Details 1) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Current assets: | ' | ' | ' |
Cash | $241 | $0 | $944 |
Accounts receivable | 41 | 200,040 | ' |
Prepaid expenses | 13,945 | 15,818 | ' |
Total current assets | 573,074 | 631,906 | ' |
Property and equipment, net | 3,540 | 7,401 | ' |
Total assets of discontinued operations | 634,114 | 746,807 | ' |
Current liabilities: | ' | ' | ' |
Total liabilities of discontinued operations | 4,378,243 | 3,473,706 | ' |
Rogue Paper | ' | ' | ' |
Current assets: | ' | ' | ' |
Cash | 70,951 | 70,951 | ' |
Accounts receivable | 27,480 | 27,480 | ' |
Prepaid expenses | 1,000 | 1,000 | ' |
Total current assets | 99,431 | 99,431 | ' |
Property and equipment, net | 7,840 | 7,840 | ' |
Total assets of discontinued operations | 107,271 | 107,271 | ' |
Current liabilities: | ' | ' | ' |
Accounts payable | 11,116 | 11,116 | ' |
Total liabilities of discontinued operations | $11,116 | $11,116 | ' |
5_Loans_Payable_Details
5. Loans Payable (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Loans payable, current | $680,795 | $404,761 |
Lucosky Brookman LLP One [Member] | ' | ' |
Loans payable, current | 48,160 | 0 |
Sammie Hill III [Member] | ' | ' |
Loans payable, current | 12,000 | 0 |
Tangiers Investment Group, LLC | ' | ' |
Loans payable, current | 2,908 | 0 |
Tangiers Investment Group LLC 1 [Member] | ' | ' |
Loans payable, current | 0 | 0 |
Tangiers Investment Group LLC Two [Member] | ' | ' |
Loans payable, current | 0 | 0 |
Tangiers Investment Group LLC Three [Member] | ' | ' |
Loans payable, current | 0 | 0 |
Tangiers Investment Group LLC Four [Member] | ' | ' |
Loans payable, current | 3,115 | 0 |
Tangiers Investment Group LLC Five [Member] | ' | ' |
Loans payable, current | 9,524 | 0 |
Tangiers Investment Group LLC Six [Member] | ' | ' |
Loans payable, current | 2,276 | 0 |
Black Arch Opportunity Fund LP [Member] | ' | ' |
Loans payable, current | 11,265 | 0 |
CJ Mosley | ' | ' |
Loans payable, current | 14,950 | 0 |
Hanover Holdings I, LLC [Member] | ' | ' |
Loans payable, current | 2,905 | 4,750 |
Azfar Haque [Member] | ' | ' |
Loans payable, current | 7,048 | 6,438 |
Hanover Holdings I, LLC One [Member] | ' | ' |
Loans payable, current | 86,244 | 49,734 |
Magna Group, LLC [Member] | ' | ' |
Loans payable, current | 0 | 0 |
Hanover Holdings I, LLC Two [Member] | ' | ' |
Loans payable, current | 19,317 | 12,805 |
Hanover Holdings I, LLC Three [Member] | ' | ' |
Loans payable, current | 0 | 10,231 |
Hanover Holdings I, LLC Four [Member] | ' | ' |
Loans payable, current | 0 | 3,013 |
Hanover Holdings I, LLC Five [Member] | ' | ' |
Loans payable, current | 7,760 | 11,406 |
Asher Enterprises, Inc [Member] | ' | ' |
Loans payable, current | 0 | 19,008 |
Bulldog Insurance Nine [Member] | ' | ' |
Loans payable, current | 0 | 0 |
Bulldog Insurance Ten [Member] | ' | ' |
Loans payable, current | 0 | 0 |
Bulldog Insurance Eleven [Member] | ' | ' |
Loans payable, current | 0 | 0 |
Hanover Holdings I, LLC Six [Member] | ' | ' |
Loans payable, current | 0 | 4,729 |
Asher Enterprises, Inc One [Member] | ' | ' |
Loans payable, current | 0 | 30,700 |
Hanover Holdings I, LLC Seven [Member] | ' | ' |
Loans payable, current | 17,663 | 12,310 |
Bulldog Insurance [Member] | ' | ' |
Loans payable, current | 0 | 15,474 |
Bulldog Insurance One [Member] | ' | ' |
Loans payable, current | 0 | 8,669 |
Bulldog Insurance Two [Member] | ' | ' |
Loans payable, current | 0 | 33,556 |
Southridge Partners II LP [Member] | ' | ' |
Loans payable, current | 0 | 8,097 |
Bulldog Insurance Three [Member] | ' | ' |
Loans payable, current | 0 | 3,275 |
Southridge Partners II LP One [Member] | ' | ' |
Loans payable, current | 44,191 | 34,771 |
SC Advisors, Inc [Member] | ' | ' |
Loans payable, current | 16,520 | 15,299 |
Southridge Partners II LP Two [Member] | ' | ' |
Loans payable, current | 0 | 3,491 |
Bulldog Insurance Four [Member] | ' | ' |
Loans payable, current | 0 | 3,619 |
Azfar Haque One [Member] | ' | ' |
Loans payable, current | 23,026 | 40,302 |
SC Advisors, Inc One [Member] | ' | ' |
Loans payable, current | 16,398 | 15,181 |
Southridge Partners II LP Three [Member] | ' | ' |
Loans payable, current | 0 | 1,666 |
Asher Enterprises, Inc Two [Member] | ' | ' |
Loans payable, current | 32,074 | 7,938 |
Bulldog Insurance Five [Member] | ' | ' |
Loans payable, current | 0 | 7,150 |
Southridge Partners II LP Four [Member] | ' | ' |
Loans payable, current | 0 | 2,830 |
Star City Capital LLC [Member] | ' | ' |
Loans payable, current | 10,179 | 863 |
SC Advisors, Inc Two [Member] | ' | ' |
Loans payable, current | 16,312 | 15,099 |
Southridge Partners II LP Five [Member] | ' | ' |
Loans payable, current | 27,125 | 2,479 |
Star City Capital LLC One [Member] | ' | ' |
Loans payable, current | 2,407 | 19,751 |
Southridge Partners II LP Seven [Member] | ' | ' |
Loans payable, current | 0 | 127 |
Asher Enterprises, Inc Four [Member] | ' | ' |
Loans payable, current | 34,851 | 0 |
Lucosky Brookman LLP [Member] | ' | ' |
Loans payable, current | 38,378 | 0 |
Asher Enterprises, Inc Five [Member] | ' | ' |
Loans payable, current | 30,751 | 0 |
Andre Fluellen [Member] | ' | ' |
Loans payable, current | 8,500 | 0 |
Bulldog Insurance Six [Member] | ' | ' |
Loans payable, current | 23,937 | 0 |
WHC Capital LLC [Member] | ' | ' |
Loans payable, current | 17,373 | 0 |
Asher Enterprises, Inc Six [Member] | ' | ' |
Loans payable, current | 27,715 | 0 |
Andre Fluellen 1 [Member] | ' | ' |
Loans payable, current | 8,900 | 0 |
Bulldog Insurance Seven [Member] | ' | ' |
Loans payable, current | 12,433 | 0 |
Andre Fluellen 2 [Member] | ' | ' |
Loans payable, current | 3,500 | 0 |
Andre Fluellen 3 [Member] | ' | ' |
Loans payable, current | 3,106 | 0 |
Asher Enterprises, Inc Three [Member] | ' | ' |
Loans payable, current | 8,755 | 0 |
Azfar Haque Two [Member] | ' | ' |
Loans payable, current | 8,500 | 0 |
Azfar Haque Three [Member] | ' | ' |
Loans payable, current | 10,000 | 0 |
Bulldog Insurance Eight [Member] | ' | ' |
Loans payable, current | 8,642 | 0 |
WHC Capital LLC Two [Member] | ' | ' |
Loans payable, current | $2,087 | $0 |
5_Loans_Payable_Details_Narrat
5. Loans Payable (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Interest expense | $64,580 | $126,284 |
Total borrowings during period | 281,000 | 851,711 |
Repayments made on borrowings | 5,000 | 12,600 |
Series A preferred stock [Member] | ' | ' |
Conversion of loans payable to shares | ' | 1,000,000 |
Conversion of loans payable to value | ' | 57,000 |
Common Stock [Member] | ' | ' |
Conversion of loans payable to shares | 1,975,718,232 | 3,693,754 |
Conversion of loans payable to value | $257,267 | $875,433 |
6_Related_Parties_Details
6. Related Parties (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Loans payable - related parties | $673,697 | $539,909 |
Less current portion | -601,348 | -539,909 |
Loan payable - related parties, non-current | 72,349 | 0 |
Frank Russo [Member] | ' | ' |
Loans payable - related parties | 301,429 | 354,979 |
Edward Eppel [Member] | ' | ' |
Loans payable - related parties | 189,950 | 184,930 |
Robert Saidel | ' | ' |
Loans payable - related parties | 20,848 | 0 |
Robert Saidel 2 | ' | ' |
Loans payable - related parties | 7,753 | 0 |
Robert Saidel 3 | ' | ' |
Loans payable - related parties | 10,262 | 0 |
Robert Saidel 4 | ' | ' |
Loans payable - related parties | 4,087 | 0 |
Robert Saidel 6 [Member] | ' | ' |
Loans payable - related parties | $139,368 | $0 |
7_Amounts_Payable_in_Common_St1
7. Amounts Payable in Common Stock and Derivative Liability (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Amounts Payable In Common Stock And Derivative Liability Details Narrative | ' | ' |
Change in derivative liability | $154,277 | $12,099 |
Reduction of the derivative liability | 105,270 | 416,441 |
Common stock issued in settlement of debt, shares | 101,300,000 | 1,610,400 |
Common stock issued in settlement of debt, value | 113,000 | 1,201,930 |
Common stock issued in settlement of debt, liability value | $173,730 | $773,390 |
9_Income_Taxes_Details
9. Income Taxes (Details) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | ' | ' |
Expected income tax (benefit) at 34% statutory rate | -34.00% | -34.00% |
Permanent tax differences | 7.20% | 4.60% |
Timing differences | 0.00% | 0.00% |
Change in valuation allowance | 26.80% | 29.40% |
Actual tax expense | 0.00% | 0.00% |
9_Income_Taxes_Details_1
9. Income Taxes (Details 1) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Deferred income tax assets: | ' | ' |
Net operating loss carry forwards | $7,043,090 | $6,423,760 |
Valuation allowance | -7,043,090 | -6,423,760 |
Net deferred income tax assets | $0 | $0 |
9_Income_Taxes_Details_Narrati
9. Income Taxes (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income Taxes Details Narrative | ' | ' |
Net operating loss carry forwards | $20,715,000 | ' |
Increase in valuation allowance | $619,330 | $1,430,990 |
10_Commitments_and_Contingenci2
10. Commitments and Contingencies (Details) (USD $) | Dec. 31, 2013 |
Commitments And Contingencies Details | ' |
2014 | $27,550 |
2015 | 28,366 |
2016 | 29,219 |
2017 | 15,054 |
Total | $100,189 |
10_Commitments_and_Contingenci3
10. Commitments and Contingencies (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Commitments And Contingencies Details Narrative | ' | ' |
Rent expense | $30,727 | $23,186 |
Common Stock Issued in Conversion of Preferred Stock | 6,219,000 | ' |
Common stock returned | '39,050 | ' |
Reduction in acquisition liability related to Share Exchange Agreement with shareholders of Rogue Paper | 23,123 | ' |
Royalty expense | $4,013 | $44,441 |