Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Apr. 15, 2015 | Jun. 30, 2014 | |
Document And Entity Information | |||
Entity Registrant Name | EAST COAST DIVERSIFIED CORP | ||
Entity Central Index Key | 1256540 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
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 | 12,409,117,071 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2014 | ||
Entity public float | $1,197,412 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
ASSETS | ||
Cash | $16,334 | $241 |
Accounts receivable, net | 185,342 | 41 |
Inventory | 250,643 | 251,576 |
Prepaid license fees | 37,500 | 50,000 |
Prepaid expenses | 90,956 | 13,945 |
Assets attributable to disputed subsidiary | 0 | 107,271 |
Total current assets | 580,775 | 423,074 |
Property and equipment, net | 25,827 | 3,540 |
Other assets | ||
Intangible assets | 150,000 | 150,000 |
Prepaid license fees | 0 | 37,500 |
Security deposits | 20,000 | 20,000 |
Total other assets | 170,000 | 207,500 |
Total assets | 776,602 | 634,114 |
Current liabilities | ||
Bank overdraft | 5,725 | 1,889 |
Loans payable, current | 861,296 | 680,795 |
Loans payable - related parties, current | 721,075 | 601,348 |
Due to related party | 0 | 10,120 |
Accounts payable and accrued expenses | 1,034,734 | 628,970 |
Accrued payroll and related liabilities | 2,919,505 | 2,371,656 |
Deferred revenue | 83,330 | 0 |
Liabilities attributable to disputed subsidiary | 0 | 11,116 |
Total current liabilities | 5,625,665 | 4,305,894 |
Other liabilities | ||
Loans payable - related parties, non-current | 0 | 72,349 |
Total liabilities | 5,625,665 | 4,378,243 |
Contingent acquisition liabilities | 0 | 1,081,850 |
Amounts payable in common stock | 2,925 | 121,225 |
Derivative liability | 1,575 | 65,275 |
Stockholders' deficit | ||
Common stock, $0.001 par value, 24,400,000,000 and 5,900,000,000 shares authorized, 12,409,117,011 and 2,221,746,925 shares issued and outstanding at December 31, 2014 and 2013, respectively | 12,409,117 | 2,221,747 |
Additional paid-in capital | 5,714,716 | 14,949,524 |
Preferred stock issuable | 17,500 | 119,000 |
Common stock issuable | 0 | 4,500 |
Preferred stock subscriptions receivable | -1,087,498 | -1,113,498 |
Accumulated deficit | -21,926,354 | -21,096,462 |
Total East Coast Diversified stockholders' deficit | -4,449,080 | -4,629,700 |
Noncontrolling interest | -404,483 | -382,779 |
Total stockholders' deficit | -4,853,563 | -5,012,479 |
Total liabilities and stockholders' deficit | 776,602 | 634,114 |
Series A Preferred Stock [Member] | ||
Stockholders' deficit | ||
Preferred stock | 423,437 | 285,487 |
Series B Preferred Stock [Member] | ||
Stockholders' deficit | ||
Preferred stock | $2 | $2 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Preferred stock par value | $0.00 | $0.00 |
Preferred stock shares authorized | 600,000,000 | 400,000,000 |
Common stock par value | $0.00 | $0.00 |
Common stock shares authorized | 24,400,000,000 | 5,900,000,000 |
Common stock shares issued | 12,409,117,011 | 2,221,746,925 |
Common stock shares oustanding | 12,409,117,011 | 2,221,746,925 |
Series A Preferred Stock [Member] | ||
Preferred stock shares issued | 423,437,090 | 285,487,091 |
Preferred stock shares outstanding | 423,437,090 | 285,487,091 |
Series B Preferred Stock [Member] | ||
Preferred stock shares issued | 2,169 | 2,169 |
Preferred stock shares outstanding | 2,169 | 2,169 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues: | ||
Product sales | $205,786 | $157,370 |
License Fees | 16,670 | 0 |
Consulting and development | 150,000 | 0 |
Advertising revenue | 29 | 0 |
User fees | 31,970 | 22,901 |
Total revenues | 404,455 | 180,271 |
Cost of revenues: | ||
Product sales | 127,192 | 102,432 |
User fees | 20,700 | 24,993 |
Selling, general and administrative expense | 1,538,049 | 1,939,762 |
Total operating expenses | 1,685,941 | 2,067,187 |
Loss from operations | -1,281,486 | -1,886,916 |
Other income (expense) | ||
Interest expense | -619,505 | -571,150 |
Change in derivative liability | 63,700 | 154,277 |
Loss on disposal of fixed assets | 0 | -4,729 |
Total other income (expense) | -555,805 | -421,602 |
Net loss from continuing operations | -1,837,291 | -2,308,518 |
Net loss attributable to noncontrolling interests | 23,284 | 24,164 |
Net loss attributable to East Coast Diversified Corporation | -1,814,007 | -2,284,354 |
Net income from discontinued operations, net of tax | 984,115 | 0 |
Total net loss after discontinued operations | ($829,892) | ($2,284,354) |
Net loss per share - basic and diluted | $0 | $0 |
Weighted average number of shares outstanding during the period - basic and diluted | 9,849,791,269 | 639,331,737 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | ||
Net income (loss) | ($829,892) | ($2,284,354) |
Adjustments to reconcile net income (loss) to net cash used in operations: | ||
Noncontrolling interests | -23,284 | -24,164 |
Depreciation and amortization | 7,683 | 3,861 |
Issuance of loan payable for consulting services | 0 | 78,922 |
Stock issued for services and compensation | 2,096 | 12,900 |
Amortization of prepaid license fee | 50,000 | 50,000 |
Gain on disposal of discontinued operations | -984,115 | 0 |
Accretion of beneficial conversion feature on convertible notes payable as interest | 245,493 | 486,696 |
Change in derivative liability | -63,700 | -154,277 |
Interest accrued on loans payable | 82,612 | 81,208 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | -185,301 | 199,999 |
Inventory | 933 | -142,799 |
Prepaid expenses | -77,011 | 1,873 |
Bank overdraft, net | 3,836 | -4,139 |
Due to related party | -10,120 | -54,553 |
Accounts payable and accrued expenses | 405,764 | 120,030 |
Accrued payroll and related liabilities | 547,849 | 723,878 |
Deferred revenue | 83,330 | 0 |
Net cash used in operating activities | -743,827 | -904,919 |
Cash flows from investing activities: | ||
Capital expenditures | -29,970 | 0 |
Net cash used in investing activities | -29,970 | 0 |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 0 | 32,000 |
Proceeds from common stock subscriptions | 0 | 4,500 |
Repurchase of common stock | 0 | -5,000 |
Proceeds from issuance of preferred stock | 120,000 | 184,000 |
Proceeds from preferred stock subscriptions | 71,500 | 161,500 |
Repurchase of preferred stock | 0 | -5,000 |
Proceeds from loans payable | 419,350 | 281,000 |
Repayments on loans payable | -2,800 | -5,000 |
Proceeds from loans payable - related party | 181,840 | 257,160 |
Net cash from financing activities | 789,890 | 905,160 |
Net increase (decrease) in cash | 16,093 | 241 |
Cash at beginning of period | 241 | 0 |
Cash at end of period | 16,334 | 241 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 0 | 3,246 |
Cash paid for taxes | 0 | 0 |
Non-cash investing and financing activities: | ||
Issuance of 7,674,970,146 and 1,975,718,232 shares of common stock in conversion of loans payable, respectively | 428,418 | 257,267 |
Issuance of 17,000,000 shares of Series A preferred stock in conversion of loans payable | 34,000 | 0 |
Issuance of 675,304,000 shares of common stock in conversion of loans payable - related parties | 20,808 | 0 |
Issuance of 28,833,333 shares of Series A preferred stock in conversion of loans payable - related parties | 0 | 140,000 |
Issuance of 15,000,000 shares of common stock previously held as common stock issuable | 4,500 | 0 |
Issuance of 63,449,999 shares of Series A preferred stock previously held as preferred stock issuable | 147,000 | 0 |
Issuance of 1,820,000,000 and 101,300,000 shares of common stock in settlement of loans and accounts payable converted to Amounts payable in common stock, respectively | 118,300 | 113,000 |
Beneficial conversion feature of convertible notes payable | 215,390 | 372,897 |
Issuance of 100,833,333 shares of series A preferred stock in conversion of accrued salaries | 0 | 290,500 |
Reduction of acquisition liabilities due to conversion of 39,050 shares of Series A preferred stock to 6,219,000 shares of common stock | $0 | $23,124 |
Consolidated_Statements_of_Cas1
Consolidated Statements of Cash Flows (Parenthetical) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Cash Flows [Abstract] | ||
Issuance of common stock in conversion of loans payable | 7,674,970,146 | 1,975,718,232 |
Issuance of shares of series A preferred stock in conversion of loans payable | 17,000,000 | |
Issuance of shares of series A preferred stock in conversion of loans payable - related party | 28,833,333 | |
Issuance of shares of common stock in settlement of loans and accounts payable converted to Amounts payable in common stock | 1,820,000,000 | 101,300,000 |
Issuance of shares of common stock in conversion of loans payable - related parties | 675,304,000 | |
Issuance of shares of common stock previously held as common stock issuable | 15,000,000 | |
Issuance of shares of series A preferred stock in conversion of accrued salaries | 100,833,333 | |
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' Deficit (USD $) | Preferred stock Series A | Preferred stock Series B | 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, 2012 | $103,362 | $2 | $7,198 | $15,930,510 | ($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 repurchased and cancelled, shares | -1 | -4,999 | -5,000 | |||||||
Common shares repurchased and cancelled, amount | -1,500 | |||||||||
Preferred shares issuable for cash | 119,000 | 119,000 | ||||||||
Preferred shares issued for cash | 54,209 | 129,791 | 184,000 | |||||||
Preferred shares issued for cash (in Shares) | 54,208,334 | |||||||||
Preferred shares repurchased and cancelled, amount | -1,375 | -3,625 | -5,000 | |||||||
Preferred shares repurchased and cancelled, shares | -1,375,000 | |||||||||
Stock subscriptions paid in cash | 42,500 | 42,500 | ||||||||
Preferred shares issued for conversion of loans payable - related party | 28,333 | 111,667 | 140,000 | |||||||
Preferred shares issued for conversion of loans payable - related party (in Shares) | 28,333,333 | |||||||||
Common shares issued for cash | 130,000 | -98,000 | 32,000 | |||||||
Common shares issued for cash (in Shares) | 130,000,000 | |||||||||
Common shares issuable for cash | 4,500 | 4,500 | ||||||||
Common shares issued for conversion of loans payable | 1,975,718 | -1,718,451 | 257,267 | |||||||
Common shares issued for conversion of loans payable (in Shares) | 1,975,718,232 | |||||||||
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 | |||||||||
Common shares issued for services | 1,319 | 11,581 | 12,900 | |||||||
Common shares issued for services (in Shares) | 1,319,444 | |||||||||
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 | ||||||||
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 | ||||||||
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 | |||||||||
Value of beneficial conversion feature of convertible notes payable | 372,897 | 372,897 | ||||||||
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 | |||||||
Preferred shares issuable for cash | 45,500 | 45,500 | ||||||||
Preferred shares issued for cash | 57,500 | 62,500 | 120,000 | |||||||
Preferred shares issued for cash (in Shares) | 57,500,000 | |||||||||
Stock subscriptions paid in cash | 26,000 | 26,000 | ||||||||
Preferred shares issued for conversion of loans payable - related party | 17,000 | 17,000 | 34,000 | |||||||
Preferred shares issued for conversion of loans payable - related party (in Shares) | 17,000,000 | |||||||||
Common shares issued for conversion of loans payable | 7,674,970 | -7,246,552 | 428,418 | |||||||
Common shares issued for conversion of loans payable (in Shares) | 7,674,970,146 | |||||||||
Common shares issued for conversion of amounts due in common stock, amount | 1,820,000 | -1,701,700 | 118,300 | |||||||
Common shares issued for conversion of amounts due in common stock, shares | 1,820,000,000 | |||||||||
Common shares issued for services | 2,096 | 2,096 | ||||||||
Common shares issued for services (in Shares) | 2,096,000 | |||||||||
Preferred shares issued, previously issuable | 63,450 | 83,550 | -147,000 | |||||||
Preferred shares issued, previously issuable (in Shares) | 63,449,999 | |||||||||
Common shares issued for conversion of loans payable - related party | 675,304 | -654,496 | 20,808 | |||||||
Common shares issued for conversion of loans payable - related party (in Shares) | 675,304,000 | |||||||||
Disposal of subsidiary | 1,580 | 1,580 | ||||||||
Common shares issued, previously issuable | 15,000 | -10,500 | -4,500 | |||||||
Common shares issued, previously issuable (in Shares) | 15,000,000 | |||||||||
Value of beneficial conversion feature of convertible notes payable | 215,390 | 215,390 | ||||||||
Net loss | -829,892 | -23,284 | -853,176 | |||||||
Balance at Dec. 31, 2014 | $423,437 | $2 | $12,409,117 | $5,714,716 | $17,500 | $0 | ($1,087,498) | ($21,926,354) | ($404,483) | ($4,853,563) |
Balance (in Shares) at Dec. 31, 2014 | 423,437,090 | 2,169 | 12,409,117,071 |
1_Nature_of_Business_Presentat
1. Nature of Business, Presentation, and Going Concern | 12 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
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. Effective March 31, 2014, the Company’s management believed that the net assets of Rogue Paper were not recoverable and, as such, the Company has accounted for the disputed assets and liabilities as if they have been disposed. Additionally, the Company believes the contingent acquisition liabilities no longer exist. | |
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 allows 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 its first beta test of Vir2o, its social media platform, for its marketing strategy for North America in 2014. If successful, the Company will introduce a similar strategy to key markets in North America to allow it to compete even more effectively in the social media space. Vir2o has the ability to deliver movies, music and shopping, in a live, engaging and interactive way, for users, their friends and family, which the Company believes is the future of social media. The Company’s goal is to join the next wave of innovation to transform social media and it plans to deliver content on mobile and cross platforms that integrates mobile and desktop. It will be imperative that the Company forms strategic alliances with content providers for the strategy to be successful. The Company has begun redesigning Vir2o and will launch the new version of the platform at end of 3rd quarter 2015. | |
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”). | |
Reclassifications | |
Certain items on the consolidated balance sheet for the year ended December 31, 2013 have been reclassified to conform to the current period presentation. | |
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 $21,926,354 at December 31, 2014, a net loss and net cash used in operations of $829,892 and $743,827, respectively, for the year ended December 31, 2014. 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, 2014 | |||
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. 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, 2014 and 2013, 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, 2014, three customers account for 95% 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 $66,000 and $3,296 for the years ended December 31, 2014 and 2013, respectively. At December 31, 2014 and 2013, the allowance for doubtful accounts was $66,000 and $nil, 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 $7,683 and $3,861 for the years ended December 31, 2014 and 2013, respectively. | |||
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 $-0- and $580,119 for the years ended December 31, 2014 and 2013, 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, (3) Service Fees for the use of its advanced web based asset management platform, and (4) Advertising fees in connection with the Student Connect messages sent to parents of school children. | |||
• | 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. | ||
• | Revenue for advertising fees is recognized ratably over the term advertising purchase. | ||
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, 2014. | |||
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, 2014. | |||
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, 2014 and 2013, there were $354,693 and $532,958, respectively, of convertible notes payable which are convertible at various conversion rates and 423,437,090 shares of convertible preferred stock which are convertible into 8,468,741,800 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, 2014 |
3_Recent_Accounting_Pronouncem
3. Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2014 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
3. Recent Accounting Pronouncements | In April 2014, the FASB issued ASU 2014-08, "Presentation of Financial Statements (Topic 205) and (Topic 360)." ASU 2014-08 amends the requirements for reporting discontinued operations and requires additional disclosures about discontinued operations. Under the new guidance, only disposals representing a strategic shift in operations or that have a major effect on the Company's operations and financial results should be presented as discontinued operations. This new accounting guidance is effective for annual periods beginning after December 15, 2014. The Company is currently evaluating the impact of adopting ASU 2014-08 on the Company's results of operations or financial condition. |
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers” (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). Early adoption is not permitted. The Company is currently evaluating the impact of the pending adoption of ASU 2014-09 on its consolidated financial statements and has not yet determined the method by which it will adopt the standard beginning January 1, 2017. | |
In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The objective of the amendments in this Update is to provide guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if “conditions or events raise substantial doubt about the entity’s ability to continue as a going concern.” The ASU applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. The Company is evaluating the impact of ASU 2014-15 on its consolidated financial condition, results of operations and cash flows. | |
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, 2014 | |||||||||
Disputed Subsidiary | |||||||||
4. Disputed Subsidiary | During the fourth quarter of 2012, the management of the Company’s subsidiary, Rogue Paper, Inc. (“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 on January 25, 2013. No legal action has been taken by either Rogue Paper or the Company. As current 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 of and for the period ended December 31, 2013 as a discontinued operation. | ||||||||
In connection with the acquisition of Rogue Paper, the Company agreed to redeem the Preferred Shares held by the former Rogue Paper shareholders’ for cash of $0.60 per share and had an option to purchase the remaining forty-nine percent (49%) of Rogue Paper Common Shares for cash, at a price of $0.03 per share. 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, resulting in a remaining liability of $1,081,850 at December 31, 2013. | |||||||||
Effective March 31, 2014, the Company’s management believed that the net assets of Rogue Paper were not recoverable and, as such, the Company has accounted for the disputed assets and liabilities as if they have been disposed. Additionally, the Company believes the contingent acquisition liabilities no longer exist. The net effect of these transactions results in a gain from discontinued operations of $984,115. | |||||||||
Assets and liabilities of the discontinued subsidiary as of December 31, 2014 and 2013 were as follows: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Total assets | $ | – | $ | 107,271 | |||||
Total liabilities | $ | – | $ | 11,116 |
5_Loans_Payable
5. Loans Payable | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
5. Loans Payable | Loans payable at December 31, 2014 and 2013 consisted of the following: | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
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 at December 31, 2013. During the year ended December 31, 2014, the remaining accrued interest of $2,905 was forgiven by the lender. | $ | – | $ | 2,905 | |||||
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 $1,962 and $1,396 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 7,614 | 7,048 | |||||||
Unsecured $70,000 convertible note payable to Hanover Holdings I, LLC, which bears interest at 12% per annum and due was October 24 2013. Accrued interest is equal to $24,672 and $16,244 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 94,672 | 86,244 | |||||||
Unsecured $16,000 convertible note payable to Hanover Holdings I, LLC, which bears interest at 12% per annum and was due May 3, 2013. Accrued interest is equal to $5,244 and $3,317 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 21,244 | 19,317 | |||||||
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. Accrued interest is equal to $2,667 and $1,970 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 8,457 | 7,760 | |||||||
Unsecured $15,000 convertible note payable to Hanover Holdings I, LLC, which bears interest at 12% per annum and was due March 26, 2013. Accrued interest is equal to $4,470 and $2,663 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 19,470 | 17,663 | |||||||
Unsecured $40,000 convertible note payable to Southridge Partners II LP, which bears interest at 5% per annum and was due June 30, 2013. During the year ended December 31, 2014, the note balance and accrued interest of $1,203 was converted to common stock. Accrued interest is equal to $4,191 at December 31, 2013. | – | 44,191 | |||||||
Unsecured $15,000 note payable to SC Advisors, Inc., which bears interest at 8% per annum and was due June 30, 2013. During the year ended December 31, 2014, the note was converted to common stock. Accrued interest is equal to $1,520 at December 31, 2013. | – | 16,520 | |||||||
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. During the year ended December 31, 2014, $9,000 of the note was converted to common stock. Accrued interest is equal to $4,443 and $3,379 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 15,090 | 23,026 | |||||||
Unsecured $15,000 note payable to SC Advisors, Inc., which bears interest at 8% per annum and was due June 30, 2013. During the year ended December 31, 2014, the note was converted to common stock. Accrued interest is equal to $1,398 at December 31, 2013. | – | 16,398 | |||||||
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. During the year ended December 31, 2014, the remaining balance of the note, including accrued interest, of $30,500 was converted to common stock. Accrued interest is equal to $2,874 at December 31, 2013. | – | 32,074 | |||||||
Unsecured $9,000 convertible note payable to Star City Capital LLC, which bears interest at 12% per annum and was due December 3, 2013. During the year ended December 31, 2014, the note, including accrued interest, of $10,290 was converted to common stock. Accrued interest is equal to $1,179 at December 31, 2013. | – | 10,179 | |||||||
Unsecured $15,000 note payable to SC Advisors, Inc., which bears interest at 8% per annum and was due June 30, 2013. During the year ended December 31, 2014, the note was converted to common stock. Accrued interest is equal to $1,312 at December 31, 2013. | – | 16,312 | |||||||
Unsecured $25,000 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, 2014, the note, including accrued interest, of $27,317 was converted to common stock. Accrued interest is equal to $2,125 at December 31, 2013. | – | 27,125 | |||||||
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. During the year ended December 31, 2014, the remainder of the note, including accrued interest, of $2,851 was converted to common stock. | – | 2,407 | |||||||
Unsecured $32,500 convertible note payable to Asher Enterprises, Inc., which bears interest at 8% per annum and was due November 1, 2013. During the year ended December 31, 2014, the note, including accrued interest, of $33,800 was converted to common stock. Accrued interest is equal to $2,351 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 $7,593 and $3,378 at December 31, 2014 and 2013, respectively. | 42,593 | 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 $9,526 and $4,238 at December 31, 2014 and 2013, respectively. | 53,448 | 48,160 | |||||||
Unsecured $32,500 convertible note payable to Asher Enterprises, Inc., which bears interest at 8% per annum and was due January 31, 2014. During the year ended December 31, 2014, $7,988 of the note was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $3,501 at December 31, 2013. Accrued interest is equal to $3,959 and $1,752 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 28,471 | 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, 2014. | 8,500 | 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 was due March 6, 2014. During the year ended December 31, 2013, $20,612 of the note was converted to common stock. During the year ended December 31, 2014, $31,494 of the note and accrued interest 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, respectively. | – | 23,937 | |||||||
Unsecured $20,000 convertible note payable to WHC Capital, LLC., which bears interest at 8% per annum and was 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 $2,639 and $1,034 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 22,639 | 17,373 | |||||||
Unsecured $32,500 convertible note payable to Asher Enterprises, Inc., which bears interest at 8% per annum and was due March 3, 2014. During the year ended December 31, 2014, $7,500 of the note was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $6,316 at December 31, 2013. Accrued interest is equal to $3,762 and $1,531 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 28,762 | 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, 2014. | 8,900 | 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. During the year ended December 31, 2014, the note and accrued interest was converted to common stock. | – | 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. During the year ended December 31, 2014, the note, including accrued interest, of $5,068 was converted to common stock. Accrued interest is equal to $264 at December 31, 2013. | – | 2,908 | |||||||
Unsecured $12,000 note payable to Bulldog Insurance, which bears interest at 7% per annum and was due December 1, 2013. During the year ended December 31, 2014, the note was converted to common stock. Accrued interest is equal to $433 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, 2014. | 3,500 | 3,500 | |||||||
Unsecured $3,000 note payable to Andre Fluellen, which calls for flat interest of $150 at maturity and was due February 22, 2014. Accrued interest is equal to $150 and $106 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 3,150 | 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 $1,620 and $457 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 16,120 | 8,755 | |||||||
Unsecured $8,500 non-interest bearing note payable to Azfar Hague due February 5, 2014. During the year ended December 31, 2014, the note was converted to common stock. | – | 8,500 | |||||||
Unsecured $10,000 non-interest bearing note payable to Azfar Hague due February 20, 2014. During the year ended December 31, 2014, the note was converted to common stock. | – | 10,000 | |||||||
Unsecured $8,500 note payable to Bulldog Insurance, which bears interest at 5% per annum and due February 28, 2014. During the year ended December 31, 2014, $3,000 of the note was converted to common stock. Accrued interest is equal to $437 and $142 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 5,937 | 8,642 | |||||||
Unsecured $6,500 convertible note payable to Tangiers Investment Group, LLC., which bears interest at 10% per annum and was due July 25, 2014. During the year ended December 31, 2014, the note, including accrued interest, of $6,527 was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $3,668 at December 31, 2013. Accrued interest is equal to $283 at December 31, 2013. | – | 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 was due July 26, 2014. During the year ended December 31, 2014, the note was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $11,342 at December 31, 2013. Accrued interest is equal to $866 at December 31, 2013. | – | 9,524 | |||||||
Unsecured $5,000 convertible note payable to Tangiers Investment Group, LLC., which bears interest at 10% per annum and was due August 2, 2014. During the year ended December 31, 2014, the note, including accrued interest, of $5,027 was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $2,931 at December 31, 2013. Accrued interest is equal to $207 at December 31, 2013. | – | 2,276 | |||||||
Unsecured $5,000 convertible note payable to WHC Capital, LLC., which bears interest at 8% per annum and was 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 $557 and $155 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 5,557 | 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. During the year ended December 31, 2014, the remainder of the note, including accrued interest, was converted to common stock. Accrued interest is equal to $1,088 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 was due April 28, 2014. During the year ended December 31, 2014, the note, including accrued interest, was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $5,650 at December 31, 2013. Accrued interest is equal to $600 at December 31, 2013. | – | 14,950 | |||||||
Unsecured $7,700 convertible note payable to Andre Fluellen, which calls for flat interest of $770 due at maturity and was due June 21, 2014. Accrued interest is equal to $1,177 at December 31, 2014. This note is in default at December 31, 2014. | 8,877 | – | |||||||
Unsecured $3,450 non-interest bearing note payable to Azfar Hague due September 20, 2014. This note is in default at December 31, 2014. | 3,450 | – | |||||||
Unsecured $2,000 non-interest bearing note payable to Bulldog Insurance due September 26, 2014. This note is in default at December 31, 2014. | 2,000 | – | |||||||
Unsecured $29,000 convertible note payable to LG Capital Funding, LLC., which bears interest at 8% per annum and is due March 17, 2015. The note is discounted for its unamortized beneficial conversion feature of $6,039 at December 31, 2014. Accrued interest is equal to $1,837 at December 31, 2014. | 24,798 | – | |||||||
On March 17, 2014, LG Capital Funding, LLC entered into an agreement to purchase $40,000 of notes payable to Frank Russo. The note bears interest at 8% per annum and was due March 17, 2015. During the year ended December 31, 2014, the the note and accrued interest was converted to common stock. | – | – | |||||||
On March 27, 2014, Microcap Equity Group LLC entered into an agreement to purchase $25,000 of notes payable to Frank Russo. The note bears interest at 10% per annum and was due on demand. During the year ended December 31, 2014, the the note was converted to common stock. | – | – | |||||||
Unsecured $18,000 convertible note payable to Tangiers Investment Group, LLC., which bears interest at 8% per annum and is due March 27, 2015. The note is discounted for its unamortized beneficial conversion feature of $4,241 at December 31, 2014. Accrued interest is equal to $1,101 at December 31, 2014. | 14,860 | – | |||||||
On March 27, 2014, Tangiers Investment Group, LLC. entered into an agreement to purchase $15,000 of notes payable to Frank Russo. The note bears interest at 10% per annum and was due March 27, 2015. During the year ended December 31, 2014, the the note and accrued interest was converted to common stock. | – | – | |||||||
Unsecured $6,000 note payable to Andre Fluellen, which bears interest at 10% per annum and is due June 21, 2015. Accrued interest is equal to $317 at December 31, 2014. | 6,317 | – | |||||||
Unsecured $10,000 note payable to Falmouth Street Holdings, LLC, which bears interest at 10% per annum and is due on demand. Accrued interest is equal to $726 at December 31, 2014. | 10,726 | – | |||||||
On April 9, 2014, GEL Properties, LLC entered into an agreement to purchase $24,000 of notes payable to Frank Russo. The note bears interest at 8% per annum and is due April 9, 2015. During the year ended December 31, 2014, $16,500 of the note was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $2,015 at December 31, 2014. Accrued interest is equal to $733 at December 31, 2014. | 6,218 | – | |||||||
Unsecured $5,000 note payable to Israek Idonije, which is noninterest bearing and was due July 3, 2014. During the year ended December 31, 2014, $2,800 was repaid on the loan and $1,986 of penalty interest was accrued at December 31, 2014. This note is in default at December 31, 2014. | 4,186 | – | |||||||
On May 7, 2014, LG Capital Funding, LLC entered into an agreement to purchase $40,000 of notes payable to Frank Russo. The note bears interest at 8% per annum and is due May 7, 2015. The note is discounted for its unamortized beneficial conversion feature of $13,917 at December 31, 2014. Accrued interest is equal to $2,087 at December 31, 2014. | 28,170 | – | |||||||
Unsecured $12,5000 convertible note payable to Microcap Equity Group LLC, which bears interest at 12% per annum and is due October 8, 2014. Accrued interest is equal to $1,097 at December 31, 2014. | 13,597 | – | |||||||
Unsecured $4,200 convertible note payable to Tangiers Investment Group, LLC., which bears interest at 8% per annum and is due April 8, 2015. The note is discounted for its unamortized beneficial conversion feature of $1,128 at December 31, 2014. Accrued interest is equal to $246 at December 31, 2014. | 3,318 | – | |||||||
Unsecured loan advances of $333,000 payable to Health Information Systems Fund, LLC, which bear no interest and are due on demand. | 333,000 | – | |||||||
Unsecured $5,000 note payable to Andre Fluellen, which bears interest at 10% per annum and is due September 9, 2015. Accrued interest is equal to $155 at December 31, 2014. | 5,155 | – | |||||||
Unsecured $2,500 note payable to Andre Fluellen, which bears no interest and is due October 20 2015. | 2,500 | – | |||||||
Total Loans Payable | $ | 861,296 | $ | 680,795 | |||||
The Company accrued interest expense of $52,266 and $64,580 for the years ended December 31, 2014 and 2013, respectively, on the above loans. Accrued interest is included in the loan balances. | |||||||||
The Company borrowed $419,350 and $281,000 during the years ended December 31, 2014 and 2013, respectively. The Company made payments of $2,800 and $5,000 on the loans during the years ended December 31, 2014 and 2013. During the year ended December 31, 2014, the Company converted $428,418 of loans payable into 7,674,970,146 shares of the Company’s common stock and $34,000 of loans payable into 17,000,000 shares of the Company’s Series A preferred stock. 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. |
6_Related_Parties
6. Related Parties | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Related Party Transactions [Abstract] | |||||||||
6. Related Parties | Loans payable – related parties at December 31, 2014 and 2013 consist of the following: | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
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. During the year ended December 31, 2014, Mr. Russo loaned the Company an additional $28,800, $20,808 of the note was converted to common stock, and $144,000 was purchased by four unrelated parties. | $ | 165,421 | $ | 301,429 | |||||
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. During the year ended December 31, 2014, Mr. Eppel loaned the Company an additional $48,439. Accrued interest is equal to $73,803 and $60,789, respectively. | 256,403 | 189,950 | |||||||
Unsecured $20,000 note payable to Robert Saidel, a shareholder of the Company, which bears interest at 7% per annum and due December 1, 2013. Accrued interest is equal to $2,253 and $1,900 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 22,253 | 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 $779 and $253 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 8,279 | 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 $964 and $262 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 10,964 | 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 $369 and $87 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 4,369 | 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 $11,216 and $1,535 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 149,049 | 139,368 | |||||||
Unsecured $10,000 note payable to Robert Saidel, which bears interest at 7% per annum and due February 28, 2015. Accrued interest is equal to $581 at December 31, 2014. | 10,581 | – | |||||||
Unsecured $20,000 note payable to Frank Russo, which bears interest at 7% per annum and due April 3, 2015. Accrued interest is equal to $1,304 at December 31, 2014. | 26,304 | – | |||||||
Unsecured $63,250 notes payable to Frank Russo, which bear interest at 7% per annum and due May 1, 2015 through June 25, 2015. Accrued interest is equal to $2,828 at December 31, 2014. | 66,078 | – | |||||||
Unsecured $1,350 note payable to Frank Russo, which bears interest at 7% per annum and due May 30, 2015. Accrued interest is equal to $24 at December 31, 2014. | 1,374 | – | |||||||
Total | 721,075 | 673,697 | |||||||
Less current portion | (721,075 | ) | (601,348 | ) | |||||
Loan payable - related parties, non-current | $ | – | $ | 72,349 | |||||
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, 2012, $354,979 was due to Mr. Russo. During the year ended December 31, 2013, the Company borrowed $6,450 from Mr. Russo and converted $60,000 of the note into 9,166,667 shares of Series A preferred stock. During the year ended December 31, 2014, the Company borrowed $118,400 from Mr. Russo, $20,808 was converted into 675,304,000 shares of common stock and $144,000 of the loan was sold to third party investors. $4,156 of interest was accrued and is included in the loan balances for the year ended December 31, 2014. | |||||||||
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, 2012, $184,930 was due to Mr. Eppel. The Company borrowed $71,377 from Mr. Eppel during the year ended December 31, 2013. 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. During the year ended December 31, 2014, the Company borrowed $53,439 from Mr. Eppel. $13,014 and $13,643 of interest was accrued and included in the loan balance for the years ended December 31, 2014 and 2013, respectively. | |||||||||
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 $10,000 and $179,333 from Mr. Saidel during the years ended December 31, 2014 and 2013, respectively. $13,177 and $2,985 of interest was accrued and included in the loan balances for the years ended December 31, 2014 and 2013, respectively. 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. | |||||||||
During the year ended December 31, 2013, Mr. Anis Sherali, a shareholder and Director of the Company, 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 31, 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, 2014, the 15,000,000 shares of common stock and the 51,250,000 shares of Series A preferred stock purchased by Mr. Sherali in 2013 were issued. Additionally, Mr. Sherali purchased 12,124,999 shares of the Company’s Series A preferred stock for $28,000 during the year ended December 31, 2014. | |||||||||
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 $6,327 and $4,013 for the years ended December 31, 2014 and 2013, respectively. Additionally, the Company has prepaid $90,956 of royalty fees it expects to incur for 2015 as of December 31, 2014, which is included in prepaid expenses in the consolidated balance sheet as of December 31, 2014. | |||||||||
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 paid Web Asset a one-time fee of $150,000, which is included as intangible assets in the consolidated balance sheets at December 31, 2014 and 2013. No royalty payments have been incurred as of December 31, 2014. |
7_Amounts_Payable_in_Common_St
7. Amounts Payable in Common Stock and Derivative Liability | 12 Months Ended |
Dec. 31, 2014 | |
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, 2014 and 2013, the change in derivative liability of $63,700 and $154,277, respectively, has been recognized. | |
As common stock is issued in installments on the settlement, the Amounts Payable in Common Stock and the Derivative Liability is reduced accordingly. During the year ended December 31, 2014, 1,820,000,000 shares of common stock, with a market value of $182,000, were issued to Ironridge in settlement of $118,300 of the liability, resulting in the reduction of the derivative liability of $63,700. 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. |
8_Stockholders_Deficit
8. Stockholders' Deficit | 12 Months Ended |
Dec. 31, 2014 | |
Equity [Abstract] | |
8. Stockholders' Deficit | Authorized Capital |
The Company has 24,400,000,000 authorized shares of Common Stock at par value $0.001 and 600,000,000 authorized shares of Preferred Stock at par value of $0.001 per share. | |
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 December 31, 2014, no options have been granted under the plan. | |
Preferred Stock Issued for Cash | |
During the year ended December 31, 2014, the Company issued 57,500,000 shares of Series A preferred stock in private placements for a total of $120,000 ($0.002 per share average). 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). | |
Preferred Stock Issuable for Subscriptions | |
During the year ended December 31, 2014, the Company entered into subscription agreements for 20,847,999 shares of its Series A preferred stock to be issued for a total of $45,500. $147,000 of the amount in preferred stock issuable, representing 63,449,999 shares were issued As of December 31, 2014, there were 8,750,000 shares of Series A preferred stock, representing $17,500, remaining to be issued. | |
During the year ended December 31, 2013, the Company entered into subscription agreements for 161,437,035 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 51,625,000 shares of Series A preferred stock, representing $119,000, remaining to be issued. | |
Preferred Stock Issued in Conversion of Debt | |
During the year ended December 31, 2014, the Company issued 17,000,000 shares of Series A preferred stock in the conversion of $17,000 of notes payable to related parties. 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, 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 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. | |
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). | |
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. During the year ended December 31, 2014, the 15,000,000 shares were issued. | |
Common Stock Issued in Conversion of Debt | |
During the year ended December 31, 2014, the Company issued 7,674,970,146 shares of common stock in the conversion of $428,418 of notes payable to unrelated parties. 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 (see Note 5 – Loans Payable). | |
During the year ended December 31, 2014, the Company issued 675,304,000 shares of common stock in the conversion of $20,808 of notes payable to related parties (see Note 6 – Related Parties). | |
During the year ended December 31, 2014, the Company issued 1,820,000,000 shares of common stock, with a market value of $182,000, to Ironridge in settlement of $118,300 of amounts payable in common stock 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 (see Note 7 – Amounts Payable in Common Stock and Derivative Liability). | |
Common Stock Issued for Services | |
During the year ended December 31, 2014, the Company issued 2,096,000 shares of common stock to an unrelated party for services of $2,096, or an average price of $0.001 per share based on the fair value of the shares at the time of issuance. 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. | |
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. | |
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, 2014 | |||||||||
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, | |||||||||
2014 | 2013 | ||||||||
Expected income tax (benefit) at 34% statutory rate | -34 | % | -34 | % | |||||
Permanent tax differences | 17.3 | % | 7.2 | % | |||||
Change in valuation allowance | 16.7 | % | 26.8 | % | |||||
Actual tax expense | 0 | % | 0 | % | |||||
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, | |||||||||
2014 | 2013 | ||||||||
Deferred income tax assets: | |||||||||
Net operating loss carry forwards | $ | 7,123,830 | $ | 7,043,090 | |||||
Valuation allowance | (7,123,830 | ) | (7,043,090 | ) | |||||
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 $80,740 and $619,330 for the years ended December 31, 2014 and 2013, respectively. | |||||||||
No provision for income taxes has been provided in these financial statements due to the net loss for the years ended December 31, 2014 and 2013. At December 31, 2014, the Company has net operating loss carry forwards of approximately $20,952,000, 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, 2014, 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, 2014, 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, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
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, 2014, future minimum lease payments under the lease are as follows: | |||||
2015 | 28,366 | ||||
2016 | 29,219 | ||||
2017 | 15,054 | ||||
$ | 72,639 | ||||
Rent expense was $30,402 and $30,727 for the years ended December 31, 2014 and 2013, 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 resulting in a remaining liability of $1,081,850 at December 31, 2013. | |||||
Effective March 31, 2014, the Company’s management believed that the net assets of Rogue Paper were not recoverable and, as such, the Company has accounted for the disputed assets and liabilities as if they have been disposed. Additionally, the Company believes the contingent acquisition liabilities no longer exist. The net effect of these transactions results in a gain from discontinued operations of $984,115. | |||||
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 $6,327 and $4,013 for the years ended December 31, 2014 and 2013, respectively (see Note 6 – 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, 2014 (see Note 6 – Related Parties). |
11_Subsequent_Events
11. Subsequent Events | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
11. Subsequent Events | From January 1, 2015 through April 14, 2015, the Company received $265,500 of advances from Health Information Systems Fund, LLC, which bear no interest and are due on demand. |
On March 27, 2014, Student Connect entered into an indefinite term master licensing agreement with Location Solutions Telematics LLC (“LST”), a Dubai based corporation. Under the terms of the agreement, LST is appointed a Master Distributor of the Company’s products and granted an exclusive license to sell the products to the private school market in the country of the United Arab Emirates. All advertisement revenue generated will be shared, net of communication costs, 60% to Student Connect and 40% to LST. | |
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, 2014 | |||
Accounting Policies [Abstract] | |||
Use of Estimates | 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 | 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. All significant inter-company balances and transactions have been eliminated in consolidation. | |||
Cash and Cash Equivalents | 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, 2014 and 2013, respectively, the Company had no cash equivalents. | |||
Concentration of Credit Risk | 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, 2014, three customers account for 95% 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 $66,000 and $3,296 for the years ended December 31, 2014 and 2013, respectively. At December 31, 2014 and 2013, the allowance for doubtful accounts was $66,000 and $nil, 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 | ||
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 | ||
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 $7,683 and $3,861 for the years ended December 31, 2014 and 2013, respectively. | |||
Impairment or Disposal of Long-Lived Assets | 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 | 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 $-0- and $580,119 for the years ended December 31, 2014 and 2013, respectively. | |||
Fair Value of Financial Instruments | 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 | 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, (3) Service Fees for the use of its advanced web based asset management platform, and (4) Advertising fees in connection with the Student Connect messages sent to parents of school children. | |||
• | 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. | ||
• | Revenue for advertising fees is recognized ratably over the term advertising purchase. | ||
Stock-Based Compensation | 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, 2014. | |||
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 | ||
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, 2014. | |||
Basic and Diluted Loss Per Share | 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, 2014 and 2013, there were $354,693 and $532,958, respectively, of convertible notes payable which are convertible at various conversion rates and 423,437,090 shares of convertible preferred stock which are convertible into 8,468,741,800 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 | 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, 2014 |
4_Disputed_Subsidiary_Tables
4. Disputed Subsidiary (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Disputed Subsidiary | |||||||||
Major classes of assets and liabilities of disputed subsidiary on the balance sheet | December 31, | ||||||||
2014 | 2013 | ||||||||
Total assets | $ | – | $ | 107,271 | |||||
Total liabilities | $ | – | $ | 11,116 |
5_Loans_Payable_Tables
5. Loans Payable (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Loans payable | December 31, | ||||||||
2014 | 2013 | ||||||||
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 at December 31, 2013. During the year ended December 31, 2014, the remaining accrued interest of $2,905 was forgiven by the lender. | $ | – | $ | 2,905 | |||||
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 $1,962 and $1,396 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 7,614 | 7,048 | |||||||
Unsecured $70,000 convertible note payable to Hanover Holdings I, LLC, which bears interest at 12% per annum and due was October 24 2013. Accrued interest is equal to $24,672 and $16,244 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 94,672 | 86,244 | |||||||
Unsecured $16,000 convertible note payable to Hanover Holdings I, LLC, which bears interest at 12% per annum and was due May 3, 2013. Accrued interest is equal to $5,244 and $3,317 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 21,244 | 19,317 | |||||||
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. Accrued interest is equal to $2,667 and $1,970 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 8,457 | 7,760 | |||||||
Unsecured $15,000 convertible note payable to Hanover Holdings I, LLC, which bears interest at 12% per annum and was due March 26, 2013. Accrued interest is equal to $4,470 and $2,663 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 19,470 | 17,663 | |||||||
Unsecured $40,000 convertible note payable to Southridge Partners II LP, which bears interest at 5% per annum and was due June 30, 2013. During the year ended December 31, 2014, the note balance and accrued interest of $1,203 was converted to common stock. Accrued interest is equal to $4,191 at December 31, 2013. | – | 44,191 | |||||||
Unsecured $15,000 note payable to SC Advisors, Inc., which bears interest at 8% per annum and was due June 30, 2013. During the year ended December 31, 2014, the note was converted to common stock. Accrued interest is equal to $1,520 at December 31, 2013. | – | 16,520 | |||||||
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. During the year ended December 31, 2014, $9,000 of the note was converted to common stock. Accrued interest is equal to $4,443 and $3,379 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 15,090 | 23,026 | |||||||
Unsecured $15,000 note payable to SC Advisors, Inc., which bears interest at 8% per annum and was due June 30, 2013. During the year ended December 31, 2014, the note was converted to common stock. Accrued interest is equal to $1,398 at December 31, 2013. | – | 16,398 | |||||||
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. During the year ended December 31, 2014, the remaining balance of the note, including accrued interest, of $30,500 was converted to common stock. Accrued interest is equal to $2,874 at December 31, 2013. | – | 32,074 | |||||||
Unsecured $9,000 convertible note payable to Star City Capital LLC, which bears interest at 12% per annum and was due December 3, 2013. During the year ended December 31, 2014, the note, including accrued interest, of $10,290 was converted to common stock. Accrued interest is equal to $1,179 at December 31, 2013. | – | 10,179 | |||||||
Unsecured $15,000 note payable to SC Advisors, Inc., which bears interest at 8% per annum and was due June 30, 2013. During the year ended December 31, 2014, the note was converted to common stock. Accrued interest is equal to $1,312 at December 31, 2013. | – | 16,312 | |||||||
Unsecured $25,000 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, 2014, the note, including accrued interest, of $27,317 was converted to common stock. Accrued interest is equal to $2,125 at December 31, 2013. | – | 27,125 | |||||||
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. During the year ended December 31, 2014, the remainder of the note, including accrued interest, of $2,851 was converted to common stock. | – | 2,407 | |||||||
Unsecured $32,500 convertible note payable to Asher Enterprises, Inc., which bears interest at 8% per annum and was due November 1, 2013. During the year ended December 31, 2014, the note, including accrued interest, of $33,800 was converted to common stock. Accrued interest is equal to $2,351 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 $7,593 and $3,378 at December 31, 2014 and 2013, respectively. | 42,593 | 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 $9,526 and $4,238 at December 31, 2014 and 2013, respectively. | 53,448 | 48,160 | |||||||
Unsecured $32,500 convertible note payable to Asher Enterprises, Inc., which bears interest at 8% per annum and was due January 31, 2014. During the year ended December 31, 2014, $7,988 of the note was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $3,501 at December 31, 2013. Accrued interest is equal to $3,959 and $1,752 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 28,471 | 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, 2014. | 8,500 | 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 was due March 6, 2014. During the year ended December 31, 2013, $20,612 of the note was converted to common stock. During the year ended December 31, 2014, $31,494 of the note and accrued interest 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, respectively. | – | 23,937 | |||||||
Unsecured $20,000 convertible note payable to WHC Capital, LLC., which bears interest at 8% per annum and was 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 $2,639 and $1,034 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 22,639 | 17,373 | |||||||
Unsecured $32,500 convertible note payable to Asher Enterprises, Inc., which bears interest at 8% per annum and was due March 3, 2014. During the year ended December 31, 2014, $7,500 of the note was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $6,316 at December 31, 2013. Accrued interest is equal to $3,762 and $1,531 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 28,762 | 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, 2014. | 8,900 | 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. During the year ended December 31, 2014, the note and accrued interest was converted to common stock. | – | 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. During the year ended December 31, 2014, the note, including accrued interest, of $5,068 was converted to common stock. Accrued interest is equal to $264 at December 31, 2013. | – | 2,908 | |||||||
Unsecured $12,000 note payable to Bulldog Insurance, which bears interest at 7% per annum and was due December 1, 2013. During the year ended December 31, 2014, the note was converted to common stock. Accrued interest is equal to $433 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, 2014. | 3,500 | 3,500 | |||||||
Unsecured $3,000 note payable to Andre Fluellen, which calls for flat interest of $150 at maturity and was due February 22, 2014. Accrued interest is equal to $150 and $106 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 3,150 | 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 $1,620 and $457 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 16,120 | 8,755 | |||||||
Unsecured $8,500 non-interest bearing note payable to Azfar Hague due February 5, 2014. During the year ended December 31, 2014, the note was converted to common stock. | – | 8,500 | |||||||
Unsecured $10,000 non-interest bearing note payable to Azfar Hague due February 20, 2014. During the year ended December 31, 2014, the note was converted to common stock. | – | 10,000 | |||||||
Unsecured $8,500 note payable to Bulldog Insurance, which bears interest at 5% per annum and due February 28, 2014. During the year ended December 31, 2014, $3,000 of the note was converted to common stock. Accrued interest is equal to $437 and $142 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 5,937 | 8,642 | |||||||
Unsecured $6,500 convertible note payable to Tangiers Investment Group, LLC., which bears interest at 10% per annum and was due July 25, 2014. During the year ended December 31, 2014, the note, including accrued interest, of $6,527 was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $3,668 at December 31, 2013. Accrued interest is equal to $283 at December 31, 2013. | – | 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 was due July 26, 2014. During the year ended December 31, 2014, the note was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $11,342 at December 31, 2013. Accrued interest is equal to $866 at December 31, 2013. | – | 9,524 | |||||||
Unsecured $5,000 convertible note payable to Tangiers Investment Group, LLC., which bears interest at 10% per annum and was due August 2, 2014. During the year ended December 31, 2014, the note, including accrued interest, of $5,027 was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $2,931 at December 31, 2013. Accrued interest is equal to $207 at December 31, 2013. | – | 2,276 | |||||||
Unsecured $5,000 convertible note payable to WHC Capital, LLC., which bears interest at 8% per annum and was 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 $557 and $155 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 5,557 | 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. During the year ended December 31, 2014, the remainder of the note, including accrued interest, was converted to common stock. Accrued interest is equal to $1,088 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 was due April 28, 2014. During the year ended December 31, 2014, the note, including accrued interest, was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $5,650 at December 31, 2013. Accrued interest is equal to $600 at December 31, 2013. | – | 14,950 | |||||||
Unsecured $7,700 convertible note payable to Andre Fluellen, which calls for flat interest of $770 due at maturity and was due June 21, 2014. Accrued interest is equal to $1,177 at December 31, 2014. This note is in default at December 31, 2014. | 8,877 | – | |||||||
Unsecured $3,450 non-interest bearing note payable to Azfar Hague due September 20, 2014. This note is in default at December 31, 2014. | 3,450 | – | |||||||
Unsecured $2,000 non-interest bearing note payable to Bulldog Insurance due September 26, 2014. This note is in default at December 31, 2014. | 2,000 | – | |||||||
Unsecured $29,000 convertible note payable to LG Capital Funding, LLC., which bears interest at 8% per annum and is due March 17, 2015. The note is discounted for its unamortized beneficial conversion feature of $6,039 at December 31, 2014. Accrued interest is equal to $1,837 at December 31, 2014. | 24,798 | – | |||||||
On March 17, 2014, LG Capital Funding, LLC entered into an agreement to purchase $40,000 of notes payable to Frank Russo. The note bears interest at 8% per annum and was due March 17, 2015. During the year ended December 31, 2014, the the note and accrued interest was converted to common stock. | – | – | |||||||
On March 27, 2014, Microcap Equity Group LLC entered into an agreement to purchase $25,000 of notes payable to Frank Russo. The note bears interest at 10% per annum and was due on demand. During the year ended December 31, 2014, the the note was converted to common stock. | – | – | |||||||
Unsecured $18,000 convertible note payable to Tangiers Investment Group, LLC., which bears interest at 8% per annum and is due March 27, 2015. The note is discounted for its unamortized beneficial conversion feature of $4,241 at December 31, 2014. Accrued interest is equal to $1,101 at December 31, 2014. | 14,860 | – | |||||||
On March 27, 2014, Tangiers Investment Group, LLC. entered into an agreement to purchase $15,000 of notes payable to Frank Russo. The note bears interest at 10% per annum and was due March 27, 2015. During the year ended December 31, 2014, the the note and accrued interest was converted to common stock. | – | – | |||||||
Unsecured $6,000 note payable to Andre Fluellen, which bears interest at 10% per annum and is due June 21, 2015. Accrued interest is equal to $317 at December 31, 2014. | 6,317 | – | |||||||
Unsecured $10,000 note payable to Falmouth Street Holdings, LLC, which bears interest at 10% per annum and is due on demand. Accrued interest is equal to $726 at December 31, 2014. | 10,726 | – | |||||||
On April 9, 2014, GEL Properties, LLC entered into an agreement to purchase $24,000 of notes payable to Frank Russo. The note bears interest at 8% per annum and is due April 9, 2015. During the year ended December 31, 2014, $16,500 of the note was converted to common stock. The note is discounted for its unamortized beneficial conversion feature of $2,015 at December 31, 2014. Accrued interest is equal to $733 at December 31, 2014. | 6,218 | – | |||||||
Unsecured $5,000 note payable to Israek Idonije, which is noninterest bearing and was due July 3, 2014. During the year ended December 31, 2014, $2,800 was repaid on the loan and $1,986 of penalty interest was accrued at December 31, 2014. This note is in default at December 31, 2014. | 4,186 | – | |||||||
On May 7, 2014, LG Capital Funding, LLC entered into an agreement to purchase $40,000 of notes payable to Frank Russo. The note bears interest at 8% per annum and is due May 7, 2015. The note is discounted for its unamortized beneficial conversion feature of $13,917 at December 31, 2014. Accrued interest is equal to $2,087 at December 31, 2014. | 28,170 | – | |||||||
Unsecured $12,5000 convertible note payable to Microcap Equity Group LLC, which bears interest at 12% per annum and is due October 8, 2014. Accrued interest is equal to $1,097 at December 31, 2014. | 13,597 | – | |||||||
Unsecured $4,200 convertible note payable to Tangiers Investment Group, LLC., which bears interest at 8% per annum and is due April 8, 2015. The note is discounted for its unamortized beneficial conversion feature of $1,128 at December 31, 2014. Accrued interest is equal to $246 at December 31, 2014. | 3,318 | – | |||||||
Unsecured loan advances of $333,000 payable to Health Information Systems Fund, LLC, which bear no interest and are due on demand. | 333,000 | – | |||||||
Unsecured $5,000 note payable to Andre Fluellen, which bears interest at 10% per annum and is due September 9, 2015. Accrued interest is equal to $155 at December 31, 2014. | 5,155 | – | |||||||
Unsecured $2,500 note payable to Andre Fluellen, which bears no interest and is due October 20 2015. | 2,500 | – | |||||||
Total Loans Payable | $ | 861,296 | $ | 680,795 |
6_Related_Parties_Tables
6. Related Parties (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Related Party Transactions [Abstract] | |||||||||
Loans payable related parties | December 31, | ||||||||
2014 | 2013 | ||||||||
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. During the year ended December 31, 2014, Mr. Russo loaned the Company an additional $28,800, $20,808 of the note was converted to common stock, and $144,000 was purchased by four unrelated parties. | $ | 165,421 | $ | 301,429 | |||||
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. During the year ended December 31, 2014, Mr. Eppel loaned the Company an additional $48,439. Accrued interest is equal to $73,803 and $60,789, respectively. | 256,403 | 189,950 | |||||||
Unsecured $20,000 note payable to Robert Saidel, a shareholder of the Company, which bears interest at 7% per annum and due December 1, 2013. Accrued interest is equal to $2,253 and $1,900 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 22,253 | 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 $779 and $253 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 8,279 | 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 $964 and $262 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 10,964 | 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 $369 and $87 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 4,369 | 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 $11,216 and $1,535 at December 31, 2014 and 2013, respectively. This note is in default at December 31, 2014. | 149,049 | 139,368 | |||||||
Unsecured $10,000 note payable to Robert Saidel, which bears interest at 7% per annum and due February 28, 2015. Accrued interest is equal to $581 at December 31, 2014. | 10,581 | – | |||||||
Unsecured $20,000 note payable to Frank Russo, which bears interest at 7% per annum and due April 3, 2015. Accrued interest is equal to $1,304 at December 31, 2014. | 26,304 | – | |||||||
Unsecured $63,250 notes payable to Frank Russo, which bear interest at 7% per annum and due May 1, 2015 through June 25, 2015. Accrued interest is equal to $2,828 at December 31, 2014. | 66,078 | – | |||||||
Unsecured $1,350 note payable to Frank Russo, which bears interest at 7% per annum and due May 30, 2015. Accrued interest is equal to $24 at December 31, 2014. | 1,374 | – | |||||||
Total | 721,075 | 673,697 | |||||||
Less current portion | (721,075 | ) | (601,348 | ) | |||||
Loan payable - related parties, non-current | $ | – | $ | 72,349 |
9_Income_Taxes_Tables
9. Income Taxes (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
Schedule of Effective Income Tax Rate Reconciliation | Year Ended December 31, | ||||||||
2014 | 2013 | ||||||||
Expected income tax (benefit) at 34% statutory rate | -34 | % | -34 | % | |||||
Permanent tax differences | 17.3 | % | 7.2 | % | |||||
Change in valuation allowance | 16.7 | % | 26.8 | % | |||||
Actual tax expense | 0 | % | 0 | % | |||||
Schedule of Deferred Tax Assets and Liabilities | December 31, | ||||||||
2014 | 2013 | ||||||||
Deferred income tax assets: | |||||||||
Net operating loss carry forwards | $ | 7,123,830 | $ | 7,043,090 | |||||
Valuation allowance | (7,123,830 | ) | (7,043,090 | ) | |||||
Net deferred income tax assets | $ | – | $ | – |
10_Commitments_and_Contingenci1
10. Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments And Contingencies Tables | |||||
Future minimum lease payments | 2015 | 28,366 | |||
2016 | 29,219 | ||||
2017 | 15,054 | ||||
$ | 72,639 |
1_Nature_of_Business_Presentat1
1. Nature of Business, Presentation, and Going Concern (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accumulated deficit | ($21,926,354) | ($21,096,462) |
Net loss | -829,892 | -2,284,354 |
Net cash used in operation | ($743,827) | ($904,919) |
2_Summary_of_Significant_Accou2
2. Summary of Significant Accounting Policies (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Bad debt expense | $66,000 | $3,296 |
Allowance for doubtful accounts | 66,000 | 0 |
Depreciation expense | 7,683 | 3,861 |
Research and development costs | 0 | 580,119 |
Convertible notes payable | $354,693 | $532,958 |
Antidilutive shares, preferred stock | 8,468,741,800 | |
Accounts Receivable [Member] | Three Customers [Member] | ||
Concentration of risk | 95.00% |
4_Disputed_Subsidiary_Details
4. Disputed Subsidiary (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Total assets | $776,602 | $634,114 |
Total liabilities | 5,625,665 | 4,378,243 |
Rogue Paper | ||
Total assets | 0 | 107,271 |
Total liabilities | $0 | $11,116 |
Disclosure_4_Disputed_Subsidia
Disclosure - 4. Disputed Subsidiary (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Contingent liability | $0 | $1,081,850 |
Net income from discontinued operations | 984,115 | 0 |
Rogue Paper | ||
Stock issued in conversion of preferred stock, common stock issued | 6,219,000 | |
Stock issued in conversion of preferred stock, preferred stock returned | 39,050 | |
Reduction in acquisition liability | -23,123 | |
Contingent liability | $1,081,850 |
5_Loans_Payable_Details
5. Loans Payable (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Loans payable, current | $861,296 | $680,795 |
Unsecured $30,000 convertible note payable to Hanover Holdings | ||
Loans payable, current | 0 | 2,905 |
On February 17, 2012, Panache Capital | ||
Loans payable, current | 7,614 | 7,048 |
Unsecured $70,000 convertible note payable to Hanover Holdings | ||
Loans payable, current | 94,672 | 86,244 |
Unsecured $16,000 convertible note payable to Hanover Holdings | ||
Loans payable, current | 21,244 | 19,317 |
Unsecured $12,000 convertible note payable to Hanover Holdings | ||
Loans payable, current | 8,457 | 7,760 |
Unsecured $15,000 note payable to Hanover Holdings I, LLC | ||
Loans payable, current | 19,470 | 17,663 |
Unsecured $40,000 convertible note payable to Southridge Partners | ||
Loans payable, current | 0 | 44,191 |
Unsecured $15,000 note payable to SC Advisors | ||
Loans payable, current | 0 | 16,520 |
Unsecured $39,647 note payable to Azfar Hague | ||
Loans payable, current | 15,090 | 23,026 |
Unsecured $15,000 note payable to SC Advisors | ||
Loans payable, current | 0 | 16,398 |
Unsecured $32,500 convertible note payable to Asher Enterprises | ||
Loans payable, current | 0 | 32,074 |
Unsecured $9,000 convertible note payable to Star City Capital | ||
Loans payable, current | 0 | 10,179 |
Unsecured $15,000 note payable to SC Advisors | ||
Loans payable, current | 0 | 16,312 |
Unsecured $25,000 convertible note payable to Southridge Partners | ||
Loans payable, current | 0 | 27,125 |
On December 12, 2012, Star City Capital LLC | ||
Loans payable, current | 0 | 2,407 |
Unsecured $32,500 convertible note payable to Asher Enterprises | ||
Loans payable, current | 0 | 34,851 |
Unsecured $35,000 convertible note payable to Lucosky Brookman | ||
Loans payable, current | 42,593 | 38,378 |
Unsecured $43,922 convertible note payable to Lucosky Brookman | ||
Loans payable, current | 53,448 | 48,160 |
Unsecured $32,500 convertible note payable to Asher Enterprises | ||
Loans payable, current | 28,471 | 30,751 |
Unsecured $7,000 note payable to Andre Fluellen | ||
Loans payable, current | 8,500 | 8,500 |
On May 6, 2013, WHC Capital | ||
Loans payable, current | 0 | 23,937 |
Unsecured $20,000 convertible note payable to WHC Capital | ||
Loans payable, current | 22,639 | 17,373 |
Unsecured $32,500 convertible note payable to Asher Enterprises | ||
Loans payable, current | 28,762 | 27,715 |
Unsecured $7,500 note payable to Andre Fluellen, December 1, 2013 | ||
Loans payable, current | 8,900 | 8,900 |
Unsecured $10,000 note payable to Sammie Hill, III, December 15, 2013 | ||
Loans payable, current | 0 | 12,000 |
Unsecured $5,000 convertible note payable to Tangiers Investment Group | ||
Loans payable, current | 0 | 2,908 |
Unsecured $12,000 note payable to Bulldog Insurance | ||
Loans payable, current | 0 | 12,433 |
Unsecured $3,000 note payable to Andre Fluellen, December 1, 2013 | ||
Loans payable, current | 3,500 | 3,500 |
Unsecured $3,000 note payable to Andre Fluellen, February 22, 2014 | ||
Loans payable, current | 3,150 | 3,106 |
Unsecured $14,500 convertible note payable to Asher Enterprises, Inc. May 5, 2014 | ||
Loans payable, current | 16,120 | 8,755 |
Unsecured $8,500 non-interest bearing note payable to Azfar Hague | ||
Loans payable, current | 0 | 8,500 |
Unsecured $10,000 non-interest bearing note payable to Azfar Hague due February 20, 2014 | ||
Loans payable, current | 0 | 10,000 |
Unsecured $8,500 note payable to Bulldog Insurance | ||
Loans payable, current | 5,937 | 8,642 |
Unsecured $6,500 convertible note payable to Tangiers Investment Group | ||
Loans payable, current | 0 | 3,115 |
On July 26, 2013, Tangiers Investment Group | ||
Loans payable, current | 0 | 9,524 |
Unsecured $5,000 convertible note payable to Tangiers Investment Group | ||
Loans payable, current | 0 | 2,276 |
Unsecured $5,000 convertible note payable to WHC Capital | ||
Loans payable, current | 5,557 | 2,087 |
On January 3, 2013, Black Arch Opportunity Fund LP | ||
Loans payable, current | 0 | 11,265 |
Unsecured $20,000 convertible note payable to CJ Mosley | ||
Loans payable, current | 0 | 14,950 |
Unsecured $7,700 convertible note payable to Andre Fluellen | ||
Loans payable, current | 8,877 | 0 |
Unsecured $3,450 non-interest bearing note payable to Azfar Hague due September 20, 2014 | ||
Loans payable, current | 3,450 | 0 |
Unsecured $2,000 non-interest bearing note payable to Bulldog Insurance due September 26, 2014 | ||
Loans payable, current | 2,000 | 0 |
Unsecured $29,000 convertible note payable to LG Capital Funding, LLC | ||
Loans payable, current | 24,798 | 0 |
On March 17, 2014, LG Capital Funding, LLC | ||
Loans payable, current | 0 | 0 |
On March 27, 2014, Microcap Equity Group LLC | ||
Loans payable, current | 0 | 0 |
Unsecured $18,000 convertible note payable to Tangiers Investment Group, LLC | ||
Loans payable, current | 14,860 | 0 |
On March 27, 2014, Tangiers Investment Group, LLC | ||
Loans payable, current | 0 | 0 |
Unsecured $6,000 note payable to Andre Fluellen | ||
Loans payable, current | 6,317 | 0 |
Unsecured $10,000 note payable to Falmouth Street Holdings, LLC | ||
Loans payable, current | 10,726 | 0 |
On April 9, 2014, GEL Properties, LLC | ||
Loans payable, current | 6,218 | 0 |
Unsecured $5,000 note payable to Israek Idonije | ||
Loans payable, current | 4,186 | 0 |
On May 7, 2014, LG Capital Funding, LLC | ||
Loans payable, current | 28,170 | 0 |
Unsecured $12,5000 convertible note payable to Microcap Equity Group LLC | ||
Loans payable, current | 13,597 | 0 |
Unsecured $4,200 convertible note payable to Tangiers Investment Group, LLC | ||
Loans payable, current | 3,318 | 0 |
Unsecured loan advances of $333,000 payable to Health Information Systems Fund, LLC | ||
Loans payable, current | 333,000 | 0 |
Unsecured $5,000 note payable to Andre Fluellen | ||
Loans payable, current | 5,155 | 0 |
Unsecured $2,500 note payable to Andre Fluellen | ||
Loans payable, current | $2,500 | $0 |
5_Loans_Payable_Details_Narrat
5. Loans Payable (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Interest expense | $52,266 | $64,580 |
Total borrowings during period | 419,350 | 281,000 |
Repayments made on borrowings | 2,800 | 5,000 |
Series A preferred stock [Member] | ||
Conversion of loans payable to shares | 17,000,000 | |
Conversion of loans payable to value | 34,000 | |
Common Stock [Member] | ||
Conversion of loans payable to shares | 7,674,970,146 | 1,975,718,232 |
Conversion of loans payable to value | $428,418 | $257,267 |
6_Related_Parties_Details
6. Related Parties (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Loans payable - related parties | $721,075 | $673,697 |
Less current portion | -721,075 | -601,348 |
Loan payable - related parties, non-current | 0 | 72,349 |
Frank Russo [Member] | ||
Loans payable - related parties | 165,421 | 301,429 |
Edward Eppel [Member] | ||
Loans payable - related parties | 256,403 | 189,950 |
Robert Saidel | ||
Loans payable - related parties | 22,253 | 20,848 |
Robert Saidel 2 | ||
Loans payable - related parties | 8,279 | 7,753 |
Robert Saidel 3 | ||
Loans payable - related parties | 10,964 | 10,262 |
Robert Saidel 4 | ||
Loans payable - related parties | 4,369 | 4,087 |
Robert Saidel 5 [Member] | ||
Loans payable - related parties | 149,049 | 139,368 |
Robert Saidel 6 [Member] | ||
Loans payable - related parties | 10,581 | 0 |
Frank Russo 1 [Member] | ||
Loans payable - related parties | 26,304 | 0 |
Frank Russo 2 [Member] | ||
Loans payable - related parties | 66,078 | 0 |
Frank Russo 3 [Member] | ||
Loans payable - related parties | $1,374 | $0 |
6_Related_Parties_Details_Narr
6. Related Parties (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Loan payable, related party | $721,075 | $673,697 |
Proceeds from related party debt | 181,840 | 257,160 |
Stock issued for cash, proceeds | 0 | 32,000 |
Royalty fees | 6,327 | 4,013 |
Kayode Aladesuyi [Member] | ||
Accrued salary due | 260,000 | |
Number of series A preferred converted into accrued salary | 98,333,333 | |
License fee | 200,000 | |
Royalty fees | 12,608 | 4,013 |
Prepaid Royalty fees | 84,675 | |
Sherali [Member] | ||
Stock issued for cash, shares issued | 15,000,000 | 10,000,000 |
Stock issued for cash, proceeds | 20,000 | |
Preferred stock issued for cash, preferred stock issued | 51,250,000 | 14,862,035 |
Preferred stock issued for cash, proceeds | 55,500 | |
Sherali [Member] | Transaction one [Member] | ||
Stock issued for cash, shares issued | 15,000,000 | |
Stock issued for cash, proceeds | 4,500 | |
Preferred stock issued for cash, preferred stock issued | 12,124,999 | 51,250,000 |
Preferred stock issued for cash, proceeds | 28,000 | 117,500 |
Saidel [Member] | ||
Proceeds from related party debt | 10,000 | 179,333 |
Accrued interest | 13,177 | 2,985 |
Preferred stock issued for cash, preferred stock issued | 7,000,000 | |
Preferred stock issued for cash, proceeds | 45,000 | |
Russo [Member] | ||
Loans converted into common stock, loan amount converted | 20,808 | 60,000 |
Loans converted into common stock, stock issued | 675,304,000 | 9,166,667 |
Proceeds from related party debt | 118,400 | 6,450 |
Notes sold to unrelated parties | 144,000 | |
Accrued interest | 4,156 | |
Eppel [Member] | ||
Loans converted into common stock, loan amount converted | 80,000 | |
Loans converted into common stock, stock issued | 19,166,166 | |
Proceeds from related party debt | 53,439 | 71,377 |
Accrued interest | $13,014 | $13,643 |
7_Amounts_Payable_in_Common_St1
7. Amounts Payable in Common Stock and Derivative Liability (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Amounts Payable In Common Stock And Derivative Liability Details Narrative | ||
Change in derivative liability | $63,700 | $154,277 |
Common stock issued in settlement of debt, shares | 1,820,000,000 | 101,300,000 |
Common stock issued in settlement of debt, value | 182,000 | 113,000 |
Common stock issued in settlement of debt, liability value | 118,300 | 173,730 |
Reduction of derivative liability | ($63,700) | ($105,270) |
8_Stockholders_Deficit_Details
8. Stockholders' Deficit (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Common Stock | ||
Return stock | 39,050 | |
Acquisition liability | $23,123 | |
Series A preferred stock [Member] | ||
Stock issued for cash | 57,500,000 | 54,208,334 |
Stock issued for cash, price | $0.00 | $0.00 |
Stock issued for cash, value | 120,000 | 184,000 |
Stock issuable for subscriptions | 20,847,999 | 161,437,035 |
Stock issuable for subscriptions, value | 45,500 | 442,500 |
Stock issuable for subscriptions, outstanding | 8,750,000 | 51,625,000 |
Stock issuable for subscriptions outstanding, value | 17,500 | 119,000 |
Stock issued in conversion of debt | 17,000,000 | 28,333,333 |
Stock issued in conversion of debt, value | 17,000 | 140,000 |
Stock issued in conversion of accrued salaries | 100,833,333 | |
Stock issued in conversion of accrued salaries, value | 290,500 | |
Stock issued in conversion of common stock | 164,286 | |
Stock issued in conversion of common stock, value | 6,572 | |
Stock purchased for cash | 1,375,000 | |
Stock purchased for cash, value | 5,000 | |
Common Stock [Member] | ||
Stock issued for cash | 130,000,000 | |
Stock issued for cash, price | $0.00 | |
Stock issued for cash, value | 32,000 | |
Stock issuable for subscriptions | 15,000,000 | 15,000,000 |
Stock issuable for subscriptions, value | 4,500 | |
Stock issued in conversion of debt | 675,304,000 | |
Stock issued in conversion of debt, value | 20,808 | |
Stock issued in conversion of debt unrelated party | 7,674,970,146 | 1,975,718,232 |
Stock issued in conversion of debt unrelated party, value | 428,322 | 257,267 |
Stock issued in conversion of settlement debt | 1,820,000,000 | 101,300,000 |
Stock issued in conversion of settlement debt market value | 182,000 | 113,000 |
Stock issued in conversion of settlement debt, value | 118,300 | 173,730 |
Stock purchased for cash | 1,500 | |
Stock purchased for cash, price | $3.33 | |
Stock purchased for cash, value | 5,000 | |
Stock issued for services | 2,096,000 | 1,319,444 |
Stock issued for services, price | $0.00 | $0.01 |
Stock issued for services, value | $2,096 | $12,900 |
Stock issued to unrelated parties | 6,219,000 |
9_Income_Taxes_Details_Expecte
9. Income Taxes (Details - Expected tax benefit) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | ||
Expected income tax (benefit) at 34% statutory rate | -34.00% | -34.00% |
Permanent tax differences | 17.30% | 7.20% |
Change in valuation allowance | 16.70% | 26.80% |
Actual tax expense | 0.00% | 0.00% |
9_Income_Taxes_Details_Deferre
9. Income Taxes (Details - Deferred income tax assets) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred income tax assets: | ||
Net operating loss carry forwards | $7,123,830 | $7,043,090 |
Valuation allowance | -7,123,830 | -7,043,090 |
Net deferred income tax assets | $0 | $0 |
9_Income_Taxes_Details_Narrati
9. Income Taxes (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes Details Narrative | ||
Net operating loss carry forwards | $20,952,000 | |
Net operating loss carry forwards expiration date | 31-Dec-24 | |
Increase in valuation allowance | $80,740 | $619,330 |
10_Commitments_and_Contingenci2
10. Commitments and Contingencies (Details) (USD $) | Dec. 31, 2014 |
Commitments And Contingencies Details | |
2015 | $28,366 |
2016 | 29,219 |
2017 | 15,054 |
Total | $72,639 |
10_Commitments_and_Contingenci3
10. Commitments and Contingencies (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Commitments And Contingencies Details Narrative | ||
Rent expense | $30,402 | $30,727 |
Royalty expense | $6,327 | $4,013 |