Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 13, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Global Fiber Technologies, Inc. | |
Entity Central Index Key | 0001338929 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Jun. 30, 2019 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 | |
Entity Common Stock Shares Outstanding | 28,155,181 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Current Assets | ||
Cash and cash equivalents | $ 29,310 | |
Prepaid interest and deposits | 1,500 | 21,311 |
Inventories | 60,815 | |
Total Current Assets | 62,315 | 50,621 |
Property and equipment, net | 215,521 | 1,113 |
Intangible assets | 16,200 | |
TOTAL ASSETS | 294,036 | 51,734 |
Current Liabilities | ||
Bank indebtedness | 6 | |
Accounts payable and accrued liabilities | 219,895 | 263,869 |
Accrued compensation | 501,250 | 501,250 |
Unsecured notes and accrued interest payable | 204,863 | 196,083 |
Convertible notes and accrued interest - net of debt discount of $338,974 and $52,720, respectively | 319,165 | 99,968 |
Convertible notes and accrued interest - related party | 65,500 | 63,500 |
Promissory note and accrued interest - related party | 236,468 | |
Advances from related parties | 205,767 | 255,296 |
Related party loans and accrued interest | 239,477 | 234,273 |
Subscription payable | 100,000 | 20,000 |
Current liabilities from discontinued operations | 84,281 | 84,281 |
Total Current Liabilities | 2,176,672 | 1,718,520 |
Commitments and Contingencies | ||
Stockholders' Deficit | ||
Preferred stock, Class B, $0.001 par value, 1,000,000 shares authorized, 200,000 shares issued and outstanding | 200 | 200 |
Common stock $0.001 par value, 400,000,000 shares authorized, 27,566,515 and 19,975,927 shares issued and outstanding, 288,666 and 1,168,666 issuable as of June 30, 2019 and December 31, 2018, respectively | 27,856 | 21,145 |
Additional paid-in capital | 29,799,581 | 29,335,171 |
Accumulated deficit | (31,710,273) | (31,023,302) |
Stockholders' deficit | (1,882,636) | (1,666,786) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 294,036 | $ 51,734 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Current Liabilities | ||
Convertible notes and accrued interest, debt discountable amount | $ 338,974 | $ 52,720 |
Stockholders' Deficit | ||
Preferred stock, shares par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 200,000 | 200,000 |
Preferred stock, shares outstanding | 200,000 | 200,000 |
Common stock, shares par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 27,566,515 | 19,975,927 |
Common stock, shares outstanding | 27,566,515 | 19,975,927 |
Common stock issuable | $ 288,666 | $ 1,168,666 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
OPERATING EXPENSES | ||||
General and administrative | $ 68,655 | $ 22,113 | $ 227,129 | $ 131,104 |
Stock based compensation | 83,574 | 0 | ||
Gain from extinguishment of debt | (12,041) | |||
Total Operating Expenses | 68,655 | 22,113 | 298,662 | 131,104 |
LOSS FROM OPERATIONS | (68,655) | (22,113) | (298,662) | (131,104) |
OTHER EXPENSE | ||||
Interest expense and financing costs | 208,254 | 8,084 | 380,664 | 19,848 |
Interest expense - related parties | 4,043 | 4,832 | 7,645 | 7,418 |
Total other expense | 212,297 | 12,916 | 388,309 | 27,266 |
Loss from continuing operations | (280,952) | (35,029) | (686,971) | (158,370) |
Provision for income taxes | ||||
NET LOSS | $ (280,952) | $ (35,029) | $ (686,971) | $ (158,370) |
Net loss per share | $ (0.01) | $ 0 | $ (0.03) | $ (0.01) |
Weighted average common shares outstanding | 22,262,214 | 20,503,390 | 21,741,590 | 20,501,750 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) | Total | Class B Preferred Stock Number of Shares | Common Stock Number of Shares | Additional Paid-in Capital | Accumulated Deficit |
Beginning Balance, shares at Dec. 31, 2017 | 200,000 | 20,500,093 | |||
Beginning Balance, Amount at Dec. 31, 2017 | $ (1,381,656) | $ 200 | $ 20,500 | $ 29,175,692 | $ (30,578,048) |
Net loss | (123,341) | (123,341) | |||
Beginning Balance, shares at Mar. 31, 2018 | 200,000 | 20,500,093 | |||
Beginning Balance, Amount at Mar. 31, 2018 | (1,504,997) | $ 200 | $ 20,500 | 29,175,692 | (30,701,389) |
Debt discount - Convertible promissory note and warrants | 67,874 | 67,874 | |||
Net loss | (35,029) | (35,029) | |||
Common stock issued for consulting services, Shares | 50,000 | ||||
Common stock issued for consulting services, Amount | 5,500 | $ 50 | 5,450 | ||
Beginning Balance, shares at Jun. 30, 2018 | 200,000 | 20,550,093 | |||
Beginning Balance, Amount at Jun. 30, 2018 | (1,466,652) | $ 200 | $ 20,550 | 29,249,016 | (30,736,418) |
Beginning Balance, shares at Dec. 31, 2018 | 200,000 | 21,144,593 | |||
Beginning Balance, Amount at Dec. 31, 2018 | (1,666,786) | $ 200 | $ 21,145 | 29,335,171 | (31,023,302) |
Options issued for consulting services | 83,574 | 83,574 | |||
Common stock issuable for settlement of a convertible note, Shares | 70,588 | ||||
Debt discount - Convertible promissory note and warrants | 217,500 | 217,500 | |||
Net loss | (406,019) | (406,019) | |||
Common stock issuable for settlement of a convertible note, Amount | 5,647 | $ 71 | 5,576 | ||
Beginning Balance, shares at Mar. 31, 2019 | 200,000 | 21,215,181 | |||
Beginning Balance, Amount at Mar. 31, 2019 | (1,766,084) | $ 200 | $ 21,216 | 29,641,821 | (31,429,321) |
Debt discount - Convertible promissory note and warrants | 102,000 | 102,000 | |||
Net loss | (280,952) | (280,952) | |||
Common stock issued for cash, Shares | 190,000 | ||||
Common stock issued for repayment of related party loan, Shares | 50,000 | ||||
Acquisition of assets from related party, Shares | 6,400,000 | ||||
Common stock issued for cash, Amount | 43,500 | $ 190 | 43,310 | ||
Common stock issued for repayment of related party loan, Amount | 12,500 | 50 | 12,450 | ||
Acquisition of assets from related party, Amount | 6,400 | $ 6,400 | |||
Beginning Balance, shares at Jun. 30, 2019 | 200,000 | 27,855,181 | |||
Beginning Balance, Amount at Jun. 30, 2019 | $ (1,882,636) | $ 200 | $ 27,856 | $ 29,799,581 | $ (31,710,273) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (686,971) | $ (158,370) |
Adjustments to reconcile net income (loss) to net cash from operating activities: | ||
Gain from extinguishment of debt | (12,041) | |
Depreciation | 190 | 190 |
Expenses paid for directly by related party | 25,396 | 129,658 |
Amortization of debt discount | 358,722 | 4,793 |
Stock based compensation expense | 83,574 | 0 |
Stock issued for services | 5,500 | |
Non-cash expenses | 2,500 | |
Changes in operating assets and liabilities: | ||
Bank Indebtedness | 6 | |
Expenses paid for subsidiary | (16,336) | |
Prepaid interest and deposits | (13,039) | 29,500 |
Accounts payable and accrued expenses | (43,974) | (36,234) |
Accrued interest | 29,588 | 22,473 |
Net cash provided by (used in) operating activities | (274,885) | 10 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from issuance of convertible promissory note, net | 319,500 | 100,000 |
Proceeds from issuance of common stock | 43,500 | |
Proceeds from subscriptions payable | 80,000 | |
Repayment on a convertible note | (135,000) | |
Repayment of related party advance | (62,425) | (75,000) |
Net cash provided by financing activities | 245,575 | 25,000 |
Net change in cash and cash equivalents | (29,310) | 25,010 |
Cash and cash equivalents - beginning of period | 29,310 | |
Cash and cash equivalents - end of period | 25,010 | |
Supplemental Cash Flow Disclosures | ||
Cash paid for interest | ||
Cash paid for income taxes | ||
Non-Cash Investing and Financing Activity: | ||
Shares issued for related party loan | 12,500 | |
Acquisition of assets from related party through the issuance of common stock and a note | 275,277 | |
Shares issued for settlement of a convertible note | 5,647 | |
Beneficial conversion feature | 181,099 | |
Warrant granted in conjunction with convertible notes recognized as debt discount | $ 138,401 |
Description of Business
Description of Business | 6 Months Ended |
Jun. 30, 2019 | |
Description of Business | |
NOTE 1 - Description of Business | Global Fiber Technologies, Inc. (“the Company”) was incorporated in Nevada on March 25, 2005. As of June 30, 2019 and December 31, 2018, the Company had 400,000,000 shares of authorized common stock. During the second quarter, 2014 the Company formed Leading Edge Fashions, LLC of which it controls 51%. Effective December 31, 2014 the Company’s Board of Directors determined it was in the best interest of the Company to discontinue the operations of Leading Edge Fashions, LLC. The Company created a new limited liability company, Pure361, LLC (“Pure361”) in May 2015 for the purpose of operating the portion of the Company’s business that is involved with the collection, rejuvenation and manufacturing of garments and other accessories for the uniform marketplace that serves the hospitality, food service, medical, manufacturing, education, military, transportation and other commercial uniform industries. The Company owns 51% of Pure361. Pure361 entered into a license agreement with Pure System International Ltd. (“Pure”), the minority owner of Pure 361, related to potential future operations in which Pure361 was granted the exclusive license to use certain licensed intellectual property related to the manufacturing of uniforms from recyclable waste. Pure361 has had no operations to date nor did it have assets or liabilities as of March 31, 2019 and December 31, 2018, respectively. The Company created a new wholly owned subsidiary, Progressive Fashions Inc. (“PFI”) in February 2016 for the purpose of designing, producing and marketing the EMME® Activewear Collection. On June 5, 2017 the Company and True Beauty, LLC (the company that controls the EMME® trademark) terminated the license agreement. PFI has had no operations to date nor did it have assets or liabilities as of March 31, 2019 and December 31, 2018, respectively. The Company created a new subsidiary, ECO CHAIN 360, Inc. in November 2018 for the purpose of operating as an intermediary providing an expedited trading platform for buyers and sellers to efficiently consummate fiber transactions. The Company owns 51% of ECO CHAIN 360, Inc. ECO CHAIN 360, Inc. has had no operations to date nor did it have assets or liabilities as of June 30, 2019 and December 31, 2018, respectively. On June 18, 2019, the Company completed its acquisition of assets from AH Originals, Inc. (“AHO”), a corporation controlled by the same owner group of Global Fiber Technologies, Inc., for the consideration paid through the issuance of 6,400,000 shares of common stock of the Company and the issuance of a promissory note of $447,150 that bears 3% interest per annum and have a one year term with eight options to extend the maturity date for three-month periods. In addition, the Company issued to AHO 200,000 common shares of Authentic Heroes, Inc. (“AHI”), a subsidiary created by the Company, to hold the purchased assets. AHI has not commenced operations as of June 30, 2019. Basis of Presentation: Unaudited Interim Financial Information The accompanying interim condensed consolidated financial statements are unaudited. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all of the normal recurring adjustments necessary to present fairly the financial position and results of operations as of and for the periods presented. The interim results are not necessarily indicative of the results to be expected for the full year or any future period. Certain information and footnote disclosures normally included in the condensed consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company believes that the disclosures are adequate to make the interim information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Report on Form 10-K filed on April 16, 2019 for the years ended December 31, 2018 and 2017. Going Concern The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles, which contemplates continuation of the Company as a going concern. The Company has an accumulated deficit of $31,710,273 and $31,023,302 as of June 30, 2019 and December 31, 2018, respectively, which include net losses of $686,971 and $158,370 for the six months ended June 30, 2019 and 2018, respectively. In addition as of June 30, 2019 and December 31, 2018, the Company had a working capital deficit of $2,114,357 and $1,667,899 respectively, with limited cash resources available. Consequently, the aforementioned items raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. Management plans to raise additional debt or equity and continue to settle obligations by issuing stock. Management plans to continue to raise additional debt and equity until the Company has positive cash flows from an operating company. The Company’s ability to continue as a going concern is dependent upon its ability to repay or settle its current indebtedness, generate positive cash flow from an operating company, and/or raise capital through equity and debt financing or other means on desirable terms. If the Company is unable to obtain additional funds when they are required or if the funds cannot be obtained on favorable terms, management may be required to restructure the Company or cease operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Summary of Significant Accounting Policies | |
NOTE 2 - Summary of Significant Accounting Policies | Principles of Consolidation The accompanying consolidated financial statements include all of the accounts of the Company and its wholly owned subsidiaries, Trident Merchant Group, Inc. and Progressive Fashions Inc., and its majority owned subsidiaries, Leading Edge Fashion, LLC, Pure361, LLC and ECO CHAIN 360, Inc. which are 51% owned. All significant intercompany accounts and transactions have been eliminated. As noted above in Note 1, our 51% owned subsidiaries, Pure361, Leading Edge Fashions, LLC and ECO CHAIN 360, Inc., had no operations, assets or liabilities as of June 30, 2019 and December 31, 2018. Because of this, a non-controlling interest is not reflected in these financial statements. In addition the Company has consolidated Authentic Heroes, Inc., Inc. of which the Company owns 80%. Cash and Cash Equivalents Cash and cash equivalents include cash on hand and investments in money market funds. The Company considers all highly-liquid instruments with an original maturity of 90 days or less at the time of purchase to be cash equivalents. Inventories Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value. On June 18, 2019, the Company acquired inventories from AH Originals, Inc. for an aggregate amount of $60,815. June 30, 2019 December 31, 2018 Raw Material $ 13,631 $ - Finished Goods 47,184 - $ 60,815 $ - Equipment Property and equipment are stated at cost. Costs of replacements and major improvements are capitalized, and maintenance and repairs are charged to operations as incurred. Depreciation expense is provided primarily by the straight-line method over the estimated useful lives of the assets which is seven years. Depreciation expense amounted to $190 and $190 for the six months ended June 30, 2019 and 2018, respectively. On June 18, 2019, the Company acquired equipment from AH Originals, Inc. for an aggregate amount of $214,598. The long-lived assets of the Company are reviewed for impairment in accordance with ASC 360, “Property, Plant and Equipment” (“ASC 360”), whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the six months ended June 30, 2019 and 2018, no impairment losses have been identified. Intangible Assets The Company accounts for intangible assets (including trademarks and website) in accordance with ASC 350 “Intangibles-Goodwill and Other” (“ASC 350”). ASC 350 requires that goodwill and other intangibles with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset has decreased below its carrying value. In addition, ASC 350 requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests when circumstances indicate that the recoverability of the carrying amount of goodwill may be in doubt. Application of the goodwill impairment test requires judgment, including the identification of reporting units; assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. Significant judgments required to estimate the fair value of reporting units include estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions or the occurrence of one or more confirming events in future periods could cause the actual results or outcomes to materially differ from such estimates and could also affect the determination of fair value and/or goodwill impairment at future reporting dates. The cost of intangible assets with determinable useful lives is amortized to reflect the pattern of economic benefits consumed, either on a straight-line or accelerated basis over the estimated periods benefited. Patents, technology and other intangibles with contractual terms are generally amortized over their respective legal or contractual lives. When certain events or changes in operating conditions occur, an impairment assessment is performed and lives of intangible assets with determinable lives may be adjusted. On June 18, 2019, the Company acquired intangible assets from AH Originals, Inc. for an aggregate amount of $16,200, which includes website of $10,690 and patent of $5,510. Prepaid interest and deposits Prepaid interest and deposits consist of prepaid consulting fees, debt discounts, amounts paid for deposits on property, plant and equipment and other prepaid items. Prepaid interest is amortized over the life of the related liability. Income Taxes Income taxes are accounted for under the asset and liability method as stipulated by ASC 740 “Income Taxes.” Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities or a change in tax rate is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced to estimated amounts to be realized by the use of a valuation allowance. A valuation allowance is applied when in management’s view it is more likely than not that such deferred tax asset will be unable to be utilized. The Company adopted certain provisions under ASC Topic 740, which provide interpretative guidance for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Effective with the Company’s adoption of these provisions, interest related to the unrecognized tax benefits is recognized in the financial statements as a component of income taxes. In the unlikely event that an uncertain tax position exists in which the Company could incur income taxes, the Company would evaluate whether there is a probability that the uncertain tax position taken would be sustained upon examination by the taxing authorities. Reserves for uncertain tax positions would be recorded if the Company determined it is probable that a position would not be sustained upon examination or if payment would have to be made to a taxing authority and the amount is reasonably estimated. As of June 30, 2019 and December 31, 2018, the Company does not believe it has any uncertain tax positions that would result in the Company having a liability to the taxing authorities. The Company’s tax returns are subject to examination by the federal and state tax authorities for the years ended 2006 through 2018. Stock-based Compensation We account for stock-based awards at fair value on the date of grant, and recognize compensation over the service-period that they are expected to vest. We estimate the fair value of stock options and stock purchase warrants using the Black-Scholes option pricing model. The estimated value of the portion of a stock-based award that is ultimately expected to vest, taking into consideration estimated forfeitures, is recognized as expense over the requisite service periods. The model includes subjective input assumptions that can materially affect the fair value estimates. The expected volatility is estimated based on the most recent historical period of time, of other comparative securities, equal to the weighted average life of the options. The estimate of stock awards that will ultimately vest requires judgment, and to the extent that actual forfeitures differ from estimated forfeitures, such differences are accounted for as a cumulative adjustment to compensation expenses and recorded in the period that estimates are revised. For the six months ended June 30, 2019 and 2018, the Company incurred $83,574 and $0 for stock options grant and extension of expiry term of previous stock options grant, respectively. Beneficial Conversion Feature For conventional convertible debt where the rate of conversion is below market value, the Company records any “beneficial conversion feature” (“BCF”) intrinsic value as additional paid in capital and related debt discount. When the Company records a BCF, the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument. The discount is amortized over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. Debt Issue Costs The Company may pay debt issue costs in connection with raising funds through the issuance of debt whether convertible or not or with other consideration. These costs are recorded as debt discounts and are amortized over the life of the debt to the statement of operations as amortization of debt discount. Original Issue Discount If debt is issued with an original issue discount, the original issue discount is recorded to debt discount, reducing the face amount of the note and is amortized over the life of the debt to the statement of operations as amortization of debt discount. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. Use of Accounting Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the valuation of stock based awards issued and derivatives embedded in financial instruments. Estimates are used in the determination of depreciation, the valuation of non-cash issuances of common stock, stock options and warrants, valuing convertible notes for beneficial conversion features, among others. Fair Value FASB ASC 820, Fair Value Measurements and Disclosure ASC 820 requires that assets and liabilities measured at fair value are classified and disclosed in one of the following three categories: Level 1 — Level 2 — Level 3 — The carrying amounts of cash, accrued compensation, accounts payable and other liabilities, accrued interest payable, and short-term portion of notes payable approximate fair value because of the short-term nature of these items. Concentration of Credit Risk The carrying value of short-term financial instruments, including cash, restricted cash, trade accounts receivable, accounts payable, accrued expenses and short-term debt, approximates the fair value of these instruments. These financial instruments generally expose the Company to limited credit risk and have no stated maturities or have short-term maturities and carry interest rates that approximate market. The Company maintains cash balances at financial institutions that are insured by the FDIC. At June 30, 2019 and December 31, 2018, the Company had no amounts in excess of the FDIC limit. New Accounting Pronouncements In July 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. This update addresses several aspects of the accounting for nonemployee share-based payment transactions and expands the scope of ASC 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The main provisions of the update change the way nonemployee awards are measured in the financial statements. Under the simplified standards, nonemployee options will be valued once at the date of grant, as compared to at each reporting period end under ASC 505-50. At adoption, all awards without established measurement dates will be revalued one final time, and a cumulative effect adjustment to retained earnings will be recorded as the difference between the pre-adoption value and new value. Companies will be permitted to make elections to establish the expected term and either recognize forfeitures as they occur or apply a forfeiture rate. Compensation expense recognition using a graded vesting schedule will no longer be permitted. This pending content is the result of the FASB’s Simplification Initiative, to maintain or improve the usefulness of the information provided to the users of financial statements while reducing cost and complexity in financial reporting. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. Because the Company does not currently have any outstanding awards to non-employees for which a measurement date has not been established the adoption of ASU 2018-07 does not have a material impact to the Company’s financial statements and related disclosures upon adoption. The adoption of this standard will change the way that the Company accounts for non-employee compensation in the future. In January 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842, Reclassifications Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported consolidated net loss. |
Capital Stock
Capital Stock | 6 Months Ended |
Jun. 30, 2019 | |
Capital Stock | |
NOTE 3 - Capital Stock | Preferred Stock The Company has designated a “Class B Convertible Preferred Stock” (the “Class B Preferred”). The number of authorized shares totals 1,000,000 and the par value is $.001 per share. The Class B Preferred shareholders vote together with the common stock as a single class. The holders of Class B Preferred are entitled to receive all notices relating to voting as are required to be given to the holders of the Common Stock. The holders of shares of Class B Preferred shall be entitled to 10,000 votes per share. The Class B Preferred Stock will have the rights to liquidation as all classes of the Common Stock of the Company. The Class B Preferred stockholders are entitled to receive non-cumulative dividends at the rate of 8% per annum, and are accrued daily. The Class B Preferred Stock shall be redeemed by the Corporation for 100% of the original purchase price plus the amount of cash dividends accrued on the earlier of 6 months from the date of issuance, or the date that the Corporation received its funding from any outside source in conjunction with a merger, reverse merger or any change of control. In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, the holders of the Class B Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any assets of the Corporation to the holders of the Common Stock, the amount of $.035 per share plus any and all accrued but unpaid dividends. During the fourth quarter, 2011, 200,000 shares of the Series B Preferred Stock were issued to a related party for reimbursement of $7,500 of legal and accounting fees paid on behalf of the Company. Common Stock As of June 30, 2019 and December 31, 2018, the Company had 27,566,515 and 19,975,927 shares of its $0.001 par value common stock issued and outstanding, respectively. In addition, as of June 30, 2019 and December 31, 2018, the Company had 288,666 and 1,168,666 shares of common stock issuable, respectively. During the six months ended June 30, 2019, the Company issued common shares as follows, · On January 8, 2019, the Company issued 70,588 common shares valued at $0.08 per share for a total of $5,647 to repay the outstanding amount of a convertible note of $17,688, resulting in a gain from debt extinguishment of $12,041. · On May 10, 2019, the Company issued 50,000 common shares valued at $0.25 for $12,500 to repay the loan from the President and Director of the Company. · In May 2019, the Company issued 190,000 common shares for cash proceeds of $43,500 · On June 18, 2019, the Company issued 6,400,000 common shares valued at $0.001 par value for total of $6,400 as partial consideration for the acquisition of assets from AH Original, Inc. (“AOH”), a common controlled corporation owned by the same owner group of the Company During the year ended December 31, 2018, the Company issued common shares as follows, · On June 15, 2018, 50,000 common shares were issued at a fair value of $5,500 as a commitment fee for the issuance of a $112,238 convertible note. In addition, the Company granted warrants to purchase 112,238 shares of common stock at $0.35 per share exercisable for a period of two years. The fair value of these warrants at the time they were granted was approximately $11,224 and was calculated using the Black-Scholes-Merton model (see Note 4). · On August 15, 2018, the Company issued 25,000 common shares valued at $0.17 per share for a total of $4,250 to extend the loans’ maturity date. · On August 20, 2018, the Company issued 97,500 common shares valued at $0.12 per share for a total of $11,700 as compensation to the president and CEO of the Company. · In October 2018, the Company issued 222,000 common shares valued at $0.15 for $33,300 to repay the loan from the President and Director of the Company. · In April 2018, the Company issued 250,000 common shares valued at $0.15 for $37,500 for consulting services which is being amortized over the one year service period. As of December 31, 2018, prepaid consulting expense related to this agreement was $11,507. Warrants Exercisable to Common Shares The following assumptions were used to determine the fair value for the warrants granted using a Black-Scholes-Merton pricing model during the six months ended June 30, 2019: Six Months Ended June 30, 2019 Fair value of common stock at measurement date $ 0.20 - $0.49 Expected term at issuance 2 years - 5 years Expected average volatility 324% - 631 % Expected dividend yield - Risk-free interest rate 2.33% - 2.57 % The below table summarizes the activity of warrants exercisable for common shares during the six months ended June 30, 2019 and the year ended December 31, 2018: Number of Weighted Average Shares Exercise Price Balance as of December 31, 2017 - $ - Granted 112,238 0.35 Exercised - - Forfeited - - Balance as of December 31, 2018 112,238 $ 0.35 Granted 588,125 0.28 Exercised - - Forfeited - - Balance as of June 30, 2019 700,363 $ 0.29 The following table summarizes information relating to outstanding and exercisable stock warrants as of June 30, 2019: Warrants Outstanding Weighted Average Weighted Warrants Remaining Contractual Average Exercise Exercisable Number of Number of Shares life (in years) Price Shares 700,363 3.40 $ 0.29 700,363 As of June 30, 2019 and December 31, 2018, the intrinsic value warrants outstanding was $0 and $0 based on the closing market price of $0.20 on June 30, 2019 and $0.17 on December 31, 2018, respectively. Stock Options During the year ended December 31, 2017, the Company granted 2,650,000 options to consultants, employees and management. One hundred thousand of those options had an exercise price of $.0001, and 250,000 options at an exercise price of $0.01 vested immediately and were valued at the fair value of the Company’s stock at the measurement date less the exercise price. The value of the options was $151,490 and recorded as stock based compensation. The other 2,300,000 of options vested immediately and the fair value of these options were calculated using the Black-Scholes-Merton model. The stock compensation expense related to these options for the year ended December 31, 2017 was $433,870. During the six months ended June 30, 2019, the expiry terms of 875,000 options granted during year ended December 31, 2017 were extended for two years, resulting in fair value adjustment of $46,513 recorded under stock based compensation expense. No stock options were issued during the year ended December 31, 2018. During the six months ended June 30, 2019, the Company granted 50,000 options to consultants with an exercise price of $0.50 vested immediately and the fair value of these options were calculated using the Black-Scholes-Merton model. The stock compensation expense related to these options was $37,061. The following assumptions were used to determine the fair value for the options granted using a Black-Scholes-Merton pricing model during the six months ended June 30, 2019: For the six months ended June 30, 2019 Fair values $ 0.30 Exercise price $ 0.50 Expected term at issuance 3 years Expected average volatility 94.62 % Expected dividend yield — Risk-free interest rate 2.34 % A summary of the change in stock purchase options outstanding for the six months ended June 30, 2019 and the year ended December 31, 2018 is as follows: Average Weighted Weighted Remaining Average Average Contractual Options Exercise Grant Date Life Outstanding Price Fair Value (Years) Balance - December 31, 2017 2,650,000 $ 0.33 $ 0.33 6.92 Options issued - - - - Options expired - - - - Options exercised - - - - Balance - December 31, 2018 2,650,000 $ 0.33 $ 0.30 5.92 Options issued 50,000 $ 0.50 $ 0.30 2.73 Options expired - - - - Options exercised - - - - Balance - June 30, 2019 2,700,000 $ 0.34 $ 0.30 5.37 The following table shows information on our vested and unvested options outstanding during the six months ended June 30, 2019 and the year ended December 31, 2018: Average Weighted Weighted Remaining Average Average Contractual Options Exercise Grant Date Life Outstanding Price Fair Value (Years) Balance - December 31, 2017, unvested - $ - $ - - Balance - December 31, 2018, unvested - $ - $ - - Options issued 50,000 $ 0.50 $ 0.30 2.73 Options vested 50,000 $ 0.50 $ 0.30 2.73 Options expired - - - - Options exercised - - - - Balance – June 30, 2019, unvested - $ - $ - - As of June 30, 2019 and December 31, 2018, the intrinsic value of 1,850,000 options and 350,000 options was $112,490 and $56,990 based on the closing market price of $0.20 on June 30, 2019 and $0.17 on December 31, 2018, respectively. |
Notes Payable
Notes Payable | 6 Months Ended |
Jun. 30, 2019 | |
Notes Payable | |
NOTE 4 - Notes Payable | Unsecured Notes Payable On November 25, 2014, the Company issued an unsecured promissory note to an individual in the amount of $100,000 at 10% interest and due on April 1, 2015. On April 1, 2016 the Company entered into a forbearance agreement. The Company was granted an extension of the note through September 30, 2016 in consideration of 150,000 shares of common stock valued at $150,000 with interest accruing after March 29, 2016 at 12%. The lender was issued an additional 50,000 shares valued at $50,000 to extend the note to August 31, 2017. The note and accrued interest was $166,355 and $157,855 as of June 30, 2019 and December 31, 2018. The initial extension fee was amortized ratably over the extension period of 180 days. The note remains unpaid as of June 30, 2019, and is currently in default. During the year ended December 31, 2016, the Company received two separate payments of $12,500, totaling $25,000, as secured notes. The notes are non-interest bearing, and have no terms of repayment. The balance of the notes was $25,000 as of June 30, 2019 and December 31, 2018. On December 12, 2016, the Company issued an unsecured promissory note to an investor. The note bears interest at 5% and matured on June 30, 2017. As of December 31, 2016, payments from the investor are $2,200. On January 11, 2017, the investor loaned an additional $5,000 related to the promissory note. The balance of this note plus accrued interest totals $8,089 and $7,909 as of June 30, 2019 and December 31, 2018, respectively. The notes are currently unpaid and in default. On March 14, 2017, the Company issued an unsecured promissory note to an investor in the amount of $5,000. The note bears interest at 4% and matures on March 14, 2018. The balance of this note plus interest totals $5,419 and $5,319 as of June 30, 2019 and December 31, 2018, respectively and is currently in default. Convertible Notes Payable – related party In August 2015, the Company issued an unsecured promissory note to an investor in the amount of $50,000, convertible to common stock at $1.00 per share. The note bears an interest rate of 8% per annum and matured on August 8, 2016. The note is currently unpaid and in default. The note does not contain a beneficial conversion feature. The balance of this note plus accrued interest totals were $65,500 and $63,500 at June 30, 2019 and December 31, 2018, respectively. Promissory Notes Payable – related party On June 18, 2019, the Company issued a promissory note at a principal amount of $447,150 as part of the consideration for the acquisition of assets from AH Originals, Inc., a corporation controlled by the same owner group of Global Fiber Technologies, Inc. The promissory note bears 3% interest per annum and have a one year term with eight options to extend the maturity date for three-month periods. The balance of this note, net of note discount of $211,123 plus accrued interest totals were $236,468 at June 30, 2019. Convertible Notes Payable On June 15, 2018, The Company issued a convertible promissory note to an investor in the amount of $112,238, with an original issue discount of $9,738, convertible into common stock at the lower of $0.35 per share or a fixed conversion price of 75% multiplied by the lowest traded price of the common stock during the ten consecutive trading day period immediately preceding the notice of conversion. The Company recorded an additional liability for the value transferred to the note holder by the ability of the note holder to obtain a conversion price at a fixed discount to the trading price of the Company’s common stock in the amount of $37,413 and has treated that amount as a discount to the note and is amortizing this discount over the life of the note to interest expense. Under U.S. GAAP, this type of note is known as Stock-Settled Debt. The note bears interest at 5% per annum and matures on June 15, 2019. In connection with issuance of the note, the Company issued warrants to purchase 112,238 shares of common stock at $0.35 per share exercisable for a period of two years. The fair value of these warrants at the time they were granted was $11,224 and was calculated using the Black-Scholes-Merton model. The market value of the stock and the historical volatility of the Company’s stock on the day the warrant was granted was $0.11 and 273%, respectively. The total beneficial conversion feature discount recognized was $56,650. The total discount of $115,024 is being amortized over the term of the note. On January 8, 2019, the note holder converted the remaining balance of debt and accrued interest outstanding of $17,688 into a total of 70,588 shares, resulting in a gain from extinguishment of debt of $12,041. The Company made payments totaling $135,000 to repay the balance due on the convertible note in January 2019. On January 3, 2019, the Company issued a convertible promissory note in the amount of $86,250, convertible into common stock at the lower of the lowest trading price within the prior twenty-five days of the execution of the note or a fixed conversion price of 50% multiplied by the lowest traded price of the common stock during the twenty-five consecutive trading day period immediately preceding the conversion date. The Company recorded $86,250 as a liability on stock settled debt associated with this convertible note. The note bears interest at 12% per annum and matures on October 3, 2019. In connection with issuance of the note, the Company issued warrants to purchase 215,625 shares of common stock at $0.20 per share exercisable for a period of five years. The fair value of these warrants at the time they were granted was $43,125 and was calculated using the Black-Scholes-Merton model. The market value of the stock and the historical volatility of the Company’s stock on the day the warrant was granted was $0.20 and 631%, respectively. The total beneficial conversion feature discount recognized was $118,125. The total discount of $172,500 is being amortized over the term of the note. The balance of the liability, note and accrued interest was $177,547 and the related unamortized discount was $59,603 as of June 30, 2019. On January 15, 2019, the Company issued a convertible promissory note in the amount of $60,000, with an original issue discount of $3,000, convertible into common stock at the lower of $0.21 per share or a fixed conversion price of 65% multiplied by the lowest traded price of the common stock during the ten consecutive trading day period immediately preceding the notice of conversion. The Company recorded $32,308 as a liability on stock settled debt associated with this convertible note. The note bears interest at 5% per annum and matures on January 15, 2020. The note bears interest at 5% per annum and matures on January 16, 2020. In connection with issuance of the note, the Company issued warrants to purchase 50,000 shares of common stock at $0.21 per share exercisable for a period of two years. The fair value of these warrants at the time they were granted was $10,276 and was calculated using the Black-Scholes-Merton model. The market value of the stock and the historical volatility of the Company’s stock on the day the warrant was granted was $0.21 and 324%, respectively. The total beneficial conversion feature discount recognized was $74,532. The total discount of $92,308 is being amortized over the term of the note. The balance of the liability, note and accrued interest was $93,672 and the related unamortized discount was $50,232 as of June 30, 2019. On January 23, 2019, the Company issued a convertible promissory note in the amount of $58,000, with an original issue discount of $5,000, convertible into common stock at a fixed conversion price of 60% of the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the notice of conversion. The Company recorded $38,667 as a liability on stock settled debt associated with this convertible note. The note bears interest at 10% per annum and matures on January 23, 2020. The total beneficial conversion feature discount recognized was $88,667. The total discount of $96,667 is being amortized over the term of the note. The balance of the liability, note and accrued interest was $99,178 and the related unamortized discount was $54,656 as of June 30, 2019. On February 7, 2019, the Company issued a convertible promissory note in the amount of $45,500, with an original issue discount of $4,000, convertible into common stock at the lower of the lowest trading price within the prior twenty-five days of the note or a fixed conversion price of 50% multiplied by the lowest traded price of the common stock during the twenty-five consecutive trading day period immediately preceding the conversion date. The Company recorded $45,500 as a liability on stock settled debt associated with this convertible note. The note bears interest at 12% per annum and matures on October 25, 2019. In connection with issuance of the note, the Company issued warrants to purchase 97,500 shares of common stock at $0.35 per share exercisable for a period of three years. The fair value of these warrants at the time they were granted was $47,531 and was calculated using the Black-Scholes-Merton model. The market value of the stock and the historical volatility of the Company’s stock on the day the warrant was granted was $0.49 and 324%, respectively. The total beneficial conversion feature discount recognized was $45,500. The total discount of $91,000 is being amortized over the term of the note. The balance of the liability, note and accrued interest was $93,139 and the related unamortized discount was $40,698 as of June 30, 2019. On April 8, 2019, the Company issued three convertible promissory notes in the amount of $38,500 for an aggregate amount of $115,500, convertible into common stock at the lower of the lowest trading price within the prior twenty days of the note or 60% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the conversion date. The Company recorded $77,001 as a liability on stock settled debt associated with these convertible notes. The notes bear interest at 8% per annum and mature on January 8, 2020. In connection with the issuance of the convertible notes, the Company granted warrants to purchase 225,000 shares of common stock at $0.35 exercisable for a period of five years. The fair value of these warrants at the time they were granted was $45,000 and was calculated using the Black-Scholes-Merton model. The market value of the stock and the historical volatility of the Company’s stock on the day the warrant was granted was $0.20 and 621%, respectively. The total beneficial conversion feature discount recognized was $134,001. The total discount of $192,501 is being amortized over the term of the note. The balance of the liability, note and accrued interest was $194,602 and the related unamortized discount was $133,785 as of June 30, 2019. The Company has amortized $358,722 of the debt discount during the six months ended June 30, 2019. As of June 30, 2019 and December 31, 2018, the total balance of convertible notes plus accrued interest was $319,165 and $99,968, net of debt discount of $338,974 and $52,720, respectively. Subscription Payable During the six months ended June 30, 2019 and the year ended December 31, 2018, the Company received $80,000 and $20,000 prepayment related to a future private placement offering. As of June 30, 2019 and December 31, 2018, the subscription payable was $100,000 and $20,000, respectively. |
Acquisitions Of Assets
Acquisitions Of Assets | 6 Months Ended |
Jun. 30, 2019 | |
Acquisitions Of Assets | |
NOTE 5 - Acquisitions Of Assets | On June 18, 2019, the Company completed its acquisition of assets from AH Originals, Inc., a corporation controlled by the same owner group of Global Fiber Technologies, Inc., for the consideration paid through the issuance of 6,400,000 shares of common stock, cash advances of $32,850 and the issuance of a promissory note of $447,150 bears 3% interest per annum and has a one year term with eight options to extend the maturity date for three-month periods. Management did not consider the transaction to be a business combination due to the common control of AHO and the Company. The assets were recorded at the carrying value. The stock was recorded at is par value and the debt as its fair value. Management considered the 3% interest per the note to be below market and recorded a discount of $211,123. The acquired assets and assumed liabilities from AH Originals, Inc. summarized as follows: Assets Acquisition Equipment $ 214,598 Inventory 60,815 Web Site 10,690 Patent 5,510 $ 291,613 Less Assumed Liabilities 16,336 $ 275,277 |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Jun. 30, 2019 | |
Discontinued Operations | |
NOTE 6 - Discontinued Operations | During 2014, the Company’s Leading Edge Fashions, LLC retail businesses, of which it owned 51%, was classified as discontinued operations. Based on the Company’s strategy to allocate resources to its businesses relative to their growth potential and those with the greater right to win in the marketplace, the Company determined that this business did not align with the Company’s long-term growth plans. As of June 30, 2019 and December 31, 2018, current liabilities from discontinued operations includes $84,281 accounts payable. During the six months ended June 30, 2019 and June 30, 2018, the Company had no income or loss from discontinued operations. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions | |
NOTE 7 - Related Party Transactions | During the six months ended June 30, 2019, the Company’s President paid on behalf of the Company $15,275 of expenses and was repaid $62,425 through cash and $12,500 through the issuance of 50,000 shares of common stock valued at $0.25. During the year ended December 31, 2018, the Company settled $33,300 of advances by issuing to the president of the Company 222,000 shares of common stock valued at $0.15 per share. The President of the Company was owed $172,058 and $231,708 at June 30, 2019 and December 31, 2018, respectively. During the six months ended June 30, 2019, the CEO and Director of the Company paid on behalf of the Company $10,121 of expenses. The CEO and Director of the Company was owed $33,710 and $23,589 at June 30, 2019 and December 31, 2018, respectively. During 2016, the Company received loans from the CEO and a member of the board of directors totaling $284,900. In the year ended December 31, 2017, the Company received additional loans from these individuals in the amount of $160,650. The loans bear interest at 5% per annum and matured on June 30, 2017 and September 30, 2017. During the year ended December 31, 2017, $241,059 of the notes and interest was converted at approximately $0.19 for 580,000 common shares. The conversion of debt resulted in a gain on extinguishment of debt in the amount of $130,859 in the year ended December 31, 2017. The balance of these notes and accrued interest were $239,477 and $234,273 as of June 30, 2019 and December 31, 2018, respectively. In March 2017, the Company loaned a related party $20,000. The loan bears interest at the rate of 5% per annum and has a term of six months. During the year ended December 31, 2017, $14,463 was repaid. During the year ended December 31, 2018, the loan balance of $5,936 was determined to be uncollectible and an allowance for doubtful accounts was set up for the full amount of the receivable. |
Commitment and Contingencies
Commitment and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitment and Contingencies | |
NOTE 8 - Commitments and Contingencies | On March 15, 2015 the Company entered into a trademark license agreement with True Beauty, LLC which controls the trademark EMME. EMME is a market pioneer and trusted voice of the “Full-Figured” market. Under this licensing agreement the Company has the right to design, produce and market the EMME® Activewear Collection. On April 13, 2016, the agreement was amended regarding the term and minimum royalties. The royalty expense was $0 for the three months ended March 31, 2019. On June 5, 2017, the Company and True Beauty, LLC, entered into an agreement to terminate the agreement. The Company is required to make twelve repayments totaling $37,500 to resolve all amounts outstanding. For the year ended December 31, 2018, the Company entered into a settlement agreement with True Beauty, LLC which controls the trademark EMME. The Company paid $5,000 to settle all outstanding balances with True Beauty, LLC. As a result, the Company recorded gain on settlement of debt of $5,394. As of the date of this filing, the Company is a party to three pending litigation matters. The Company does not believe it has any liability nor has it accrued any liability as of June 30, 2019 and December 31, 2018 for the following: One matter is entitled Randazzo LLC v. Avani Holdings LLC & Global Fashion Technologies, Inc. This litigation was initiated by the plaintiff in order to evict Avani Holdings LLC from its rented premises in California and to recover unpaid rent. ECTX does not operate out of the premises in question and has never signed any leases or other documents with the plaintiff. A judgment of eviction was entered, but ECTX does not operate out of the premises in question and therefore did not appear in the matter to oppose the judgment of eviction. The plaintiff is also seeking unpaid rent in the amount of $26,595. The second matter is entitled Patricia Witthuhn v. Global Fashion Technologies, Inc. This litigation was initiated by the plaintiff in order to collect wages allegedly due pursuant to her employment with Avani Holdings LLC. The Company never hired Ms. Witthuhn and never acquired Avani Holdings, LLC. Consequently, there is no legitimate cause of action against the Company. However, due to cash flow constraints, the Company is unable to hire outside counsel for this litigation. The amount being sought by the plaintiff is approximately $15,000. The third matter is entitled William Corso v. Global Fashion Technologies, Inc. This litigation was initiated by the plaintiff in order to collect wages allegedly due pursuant to his employment with Avani Holdings LLC. The Company never hired Mr. Corso and never acquired Avani Holdings, LLC. Consequently, there is no legitimate cause of action against the Company. However, due to cash flow constraints, the Company is unable to hire outside counsel for this litigation. The amount being sought by the plaintiff is approximately $40,000. On June 18, 2019, the Company completed its acquisition of assets from AH Originals, In. and assumed lease for the facility where the equipment purchased is located. The lease will be expired on September 30, 2019. The following is a schedule of minimum future rentals on leases as of June 30, 2019: Year Ending December 31: 2019 $ 11,850 Thereafter - Total minimum future rentals $ 11,850 |
Net Loss Per Share
Net Loss Per Share | 6 Months Ended |
Jun. 30, 2019 | |
Net Loss Per Share | |
NOTE 9 - Net Loss Per Share | Potentially dilutive securities are excluded from the calculation of net loss per share when their effect would be anti-dilutive. For all periods presented in the consolidated financial statements, all potentially dilutive securities have been excluded from the diluted share calculations as they were anti-dilutive as a result of the net losses incurred for the respective periods. Accordingly, basic shares equal diluted shares for all periods presented. Potentially dilutive securities were comprised of the following: June 30, December 31, 2019 2018 Warrants 700,363 112,238 Options 2,700,000 2,650,000 Convertible notes payable, including accrued interest 9,424,406 943,794 12,824,769 3,706,032 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events | |
NOTE 10 - Subsequent Events | Subsequent to June 30, 2019 and through the date that these financials were made available, the Company had the following subsequent events: On July 1, 2019, the Company issued 300,000 shares of common stock valued at $60,000, based on market price on the issuance dates, as partial consideration to a corporation for investor relations services. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Summary of Significant Accounting Policies (Policies) | |
Principles of Consolidation | The accompanying consolidated financial statements include all of the accounts of the Company and its wholly owned subsidiaries, Trident Merchant Group, Inc. and Progressive Fashions Inc., and its majority owned subsidiaries, Leading Edge Fashion, LLC, Pure361, LLC and ECO CHAIN 360, Inc. which are 51% owned. All significant intercompany accounts and transactions have been eliminated. As noted above in Note 1, our 51% owned subsidiaries, Pure361, Leading Edge Fashions, LLC and ECO CHAIN 360, Inc., had no operations, assets or liabilities as of June 30, 2019 and December 31, 2018. Because of this, a non-controlling interest is not reflected in these financial statements. In addition the Company has consolidated Authentic Heroes, Inc., Inc. of which the Company owns 80%. |
Cash and Cash Equivalents | Cash and cash equivalents include cash on hand and investments in money market funds. The Company considers all highly-liquid instruments with an original maturity of 90 days or less at the time of purchase to be cash equivalents. |
Inventories | Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value. On June 18, 2019, the Company acquired inventories from AH Originals, Inc. for an aggregate amount of $60,815. June 30, 2019 December 31, 2018 Raw Material $ 13,631 $ - Finished Goods 47,184 - $ 60,815 $ - |
Equipment | Property and equipment are stated at cost. Costs of replacements and major improvements are capitalized, and maintenance and repairs are charged to operations as incurred. Depreciation expense is provided primarily by the straight-line method over the estimated useful lives of the assets which is seven years. Depreciation expense amounted to $190 and $190 for the six months ended June 30, 2019 and 2018, respectively. On June 18, 2019, the Company acquired equipment from AH Originals, Inc. for an aggregate amount of $214,598. The long-lived assets of the Company are reviewed for impairment in accordance with ASC 360, “Property, Plant and Equipment” (“ASC 360”), whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the six months ended June 30, 2019 and 2018, no impairment losses have been identified. |
Intangible Assets | The Company accounts for intangible assets (including trademarks and website) in accordance with ASC 350 “Intangibles-Goodwill and Other” (“ASC 350”). ASC 350 requires that goodwill and other intangibles with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset has decreased below its carrying value. In addition, ASC 350 requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests when circumstances indicate that the recoverability of the carrying amount of goodwill may be in doubt. Application of the goodwill impairment test requires judgment, including the identification of reporting units; assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. Significant judgments required to estimate the fair value of reporting units include estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions or the occurrence of one or more confirming events in future periods could cause the actual results or outcomes to materially differ from such estimates and could also affect the determination of fair value and/or goodwill impairment at future reporting dates. The cost of intangible assets with determinable useful lives is amortized to reflect the pattern of economic benefits consumed, either on a straight-line or accelerated basis over the estimated periods benefited. Patents, technology and other intangibles with contractual terms are generally amortized over their respective legal or contractual lives. When certain events or changes in operating conditions occur, an impairment assessment is performed and lives of intangible assets with determinable lives may be adjusted. On June 18, 2019, the Company acquired intangible assets from AH Originals, Inc. for an aggregate amount of $16,200, which includes website of $10,690 and patent of $5,510. |
Prepaid interest and deposits | Prepaid interest and deposits consist of prepaid consulting fees, debt discounts, amounts paid for deposits on property, plant and equipment and other prepaid items. Prepaid interest is amortized over the life of the related liability. |
Income taxes | Income taxes are accounted for under the asset and liability method as stipulated by ASC 740 “Income Taxes.” Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities or a change in tax rate is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced to estimated amounts to be realized by the use of a valuation allowance. A valuation allowance is applied when in management’s view it is more likely than not that such deferred tax asset will be unable to be utilized. The Company adopted certain provisions under ASC Topic 740, which provide interpretative guidance for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Effective with the Company’s adoption of these provisions, interest related to the unrecognized tax benefits is recognized in the financial statements as a component of income taxes. In the unlikely event that an uncertain tax position exists in which the Company could incur income taxes, the Company would evaluate whether there is a probability that the uncertain tax position taken would be sustained upon examination by the taxing authorities. Reserves for uncertain tax positions would be recorded if the Company determined it is probable that a position would not be sustained upon examination or if payment would have to be made to a taxing authority and the amount is reasonably estimated. As of June 30, 2019 and December 31, 2018, the Company does not believe it has any uncertain tax positions that would result in the Company having a liability to the taxing authorities. The Company’s tax returns are subject to examination by the federal and state tax authorities for the years ended 2006 through 2018. |
Stock Based Compensation | We account for stock-based awards at fair value on the date of grant, and recognize compensation over the service-period that they are expected to vest. We estimate the fair value of stock options and stock purchase warrants using the Black-Scholes option pricing model. The estimated value of the portion of a stock-based award that is ultimately expected to vest, taking into consideration estimated forfeitures, is recognized as expense over the requisite service periods. The model includes subjective input assumptions that can materially affect the fair value estimates. The expected volatility is estimated based on the most recent historical period of time, of other comparative securities, equal to the weighted average life of the options. The estimate of stock awards that will ultimately vest requires judgment, and to the extent that actual forfeitures differ from estimated forfeitures, such differences are accounted for as a cumulative adjustment to compensation expenses and recorded in the period that estimates are revised. For the six months ended June 30, 2019 and 2018, the Company incurred $83,574 and $0 for stock options grant and extension of expiry term of previous stock options grant, respectively. |
Beneficial Conversion Feature | For conventional convertible debt where the rate of conversion is below market value, the Company records any “beneficial conversion feature” (“BCF”) intrinsic value as additional paid in capital and related debt discount. When the Company records a BCF, the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument. The discount is amortized over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. |
Debt Issue Costs | The Company may pay debt issue costs in connection with raising funds through the issuance of debt whether convertible or not or with other consideration. These costs are recorded as debt discounts and are amortized over the life of the debt to the statement of operations as amortization of debt discount. |
Original Issue Discount | If debt is issued with an original issue discount, the original issue discount is recorded to debt discount, reducing the face amount of the note and is amortized over the life of the debt to the statement of operations as amortization of debt discount. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. |
Use of Accounting Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the valuation of stock based awards issued and derivatives embedded in financial instruments. Estimates are used in the determination of depreciation, the valuation of non-cash issuances of common stock, stock options and warrants, valuing convertible notes for beneficial conversion features, among others. |
Fair Value | FASB ASC 820, Fair Value Measurements and Disclosure ASC 820 requires that assets and liabilities measured at fair value are classified and disclosed in one of the following three categories: Level 1 — Level 2 — Level 3 — The carrying amounts of cash, accrued compensation, accounts payable and other liabilities, accrued interest payable, and short-term portion of notes payable approximate fair value because of the short-term nature of these items. |
Concentration of credit risk | The carrying value of short-term financial instruments, including cash, restricted cash, trade accounts receivable, accounts payable, accrued expenses and short-term debt, approximates the fair value of these instruments. These financial instruments generally expose the Company to limited credit risk and have no stated maturities or have short-term maturities and carry interest rates that approximate market. The Company maintains cash balances at financial institutions that are insured by the FDIC. At June 30, 2019 and December 31, 2018, the Company had no amounts in excess of the FDIC limit. |
New Accounting Pronouncements | In July 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. This update addresses several aspects of the accounting for nonemployee share-based payment transactions and expands the scope of ASC 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The main provisions of the update change the way nonemployee awards are measured in the financial statements. Under the simplified standards, nonemployee options will be valued once at the date of grant, as compared to at each reporting period end under ASC 505-50. At adoption, all awards without established measurement dates will be revalued one final time, and a cumulative effect adjustment to retained earnings will be recorded as the difference between the pre-adoption value and new value. Companies will be permitted to make elections to establish the expected term and either recognize forfeitures as they occur or apply a forfeiture rate. Compensation expense recognition using a graded vesting schedule will no longer be permitted. This pending content is the result of the FASB’s Simplification Initiative, to maintain or improve the usefulness of the information provided to the users of financial statements while reducing cost and complexity in financial reporting. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. Because the Company does not currently have any outstanding awards to non-employees for which a measurement date has not been established the adoption of ASU 2018-07 does not have a material impact to the Company’s financial statements and related disclosures upon adoption. The adoption of this standard will change the way that the Company accounts for non-employee compensation in the future. In January 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842, |
Reclassification | Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported consolidated net loss. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | |
Schedule of Inventories | June 30, 2019 December 31, 2018 Raw Material $ 13,631 $ - Finished Goods 47,184 - $ 60,815 $ - |
Capital Stock (Tables)
Capital Stock (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Capital Stock (Tables) | |
Assumptions for warrants | Six Months Ended June 30, 2019 Fair value of common stock at measurement date $ 0.20 - $0.49 Expected term at issuance 2 years - 5 years Expected average volatility 324% - 631 % Expected dividend yield - Risk-free interest rate 2.33% - 2.57 % |
Summarizes the activity of warrants exercisable | Number of Shares Weighted Average Exercise Price Balance as of December 31, 2017 - $ - Granted 112,238 0.35 Exercised - - Forfeited - - Balance as of December 31, 2018 112,238 $ 0.35 Granted 588,125 0.28 Exercised - - Forfeited - - Balance as of June 30, 2019 700,363 $ 0.29 |
Stock Warrants | Warrants Outstanding Weighted Average Weighted Warrants Remaining Contractual Average Exercise Exercisable Number of Number of Shares life (in years) Price Shares 700,363 3.40 $ 0.29 700,363 |
Assuptions for stock options | For the six months ended June 30, 2019 Fair values $ 0.30 Exercise price $ 0.50 Expected term at issuance 3 years Expected average volatility 94.62 % Expected dividend yield Risk-free interest rate 2.34 % |
Stock purchase options outstanding | Average Weighted Weighted Remaining Average Average Contractual Options Exercise Grant Date Life Outstanding Price Fair Value (Years) Balance - December 31, 2017 2,650,000 $ 0.33 $ 0.33 6.92 Options issued - - - - Options expired - - - - Options exercised - - - - Balance - December 31, 2018 2,650,000 $ 0.33 $ 0.30 5.92 Options issued 50,000 $ 0.50 $ 0.30 2.73 Options expired - - - - Options exercised - - - - Balance - June 30, 2019 2,700,000 $ 0.34 $ 0.30 5.37 |
Vested and unvested options outstandingested and unvested options outstanding | Options Outstanding Weighted AverageExercisePrice Weighted AverageGrant DateFair Value Average RemainingContractualLife(Years) Balance - December 31, 2017, unvested - $ - $ - - Balance - December 31, 2018, unvested - $ - $ - - Options issued 50,000 $ 0.50 $ 0.30 2.73 Options vested 50,000 $ 0.50 $ 0.30 2.73 Options expired - - - - Options exercised - - - - Balance June 30, 2019, unvested - $ - $ - - |
ACQUISITIONS OF ASSETS (Tables)
ACQUISITIONS OF ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Acquisitions Of Assets | |
Schedule of business Acquisitions | Assets Acquisition Equipment $ 214,598 Inventory 60,815 Web Site 10,690 Patent 5,510 $ 291,613 Less Assumed Liabilities 16,336 $ 275,277 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
COMMITMENTS AND CONTINGENCIES (Tables) | |
Schedule of minimum future rentals on leases | Year Ending December 31: 2019 $ 11,850 Thereafter - Total minimum future rentals $ 11,850 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Net Loss Per Share (Tables) | |
Potentially dilutive securities | June 30, December 31, 2019 2018 Warrants 700,363 112,238 Options 2,700,000 2,650,000 Convertible notes payable, including accrued interest 9,424,406 943,794 12,824,769 3,706,032 |
DESCRIPTION OF BUSINESS (Detail
DESCRIPTION OF BUSINESS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jun. 18, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Common Stock, shares authorized | 400,000,000 | 400,000,000 | 400,000,000 | |||
Non-controlling interest | 51.00% | 51.00% | 51.00% | |||
Accumulated deficit | $ (31,710,273) | $ (31,710,273) | $ (31,023,302) | |||
Net loss | (280,952) | $ (35,029) | (686,971) | $ (158,370) | ||
Working capital deficit | $ (2,114,357) | $ (2,114,357) | (1,667,899) | |||
AHO [Member] | ||||||
Business acquisition consideration transferred shares issued | 6,400,000 | |||||
Business acquisition consideration transferred, promissory note issued | $ 447,150 | |||||
Promissory note, interest rate | 3.00% | |||||
Description for maturity period of promissory note | one year term with eight options to extend the maturity date for three-month periods | |||||
Shares of AHI issued to AHO under acquisition | 200,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | ||
Raw Material | $ 13,631 | |
Finished Goods | 47,184 | |
Inventories | $ 60,815 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Jun. 18, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2014 | |
Depreciation | $ 190 | $ 190 | |||||
Non-controlling interest | 51.00% | 51.00% | 51.00% | ||||
Stock-based compensation | $ 83,574 | $ 0 | |||||
Ownership interest | 51.00% | ||||||
AHO [Member] | |||||||
Business acquisition, inventories acquired | 60,815 | ||||||
Equipment acquisition consideration transferred | 214,598 | ||||||
Business acquisition consideration transferred, intangible assets acquired | 16,200 | ||||||
AHO [Member] | Website [Member] | |||||||
Business acquisition consideration transferred, intangible assets acquired | 10,690 | ||||||
AHO [Member] | Patent [Member] | |||||||
Business acquisition consideration transferred, intangible assets acquired | $ 5,510 | ||||||
AHI [Member] | |||||||
Ownership interest | 80.00% | 80.00% |
CAPITAL STOCK (Details)
CAPITAL STOCK (Details) - Warrants [Member] | 6 Months Ended |
Jun. 30, 2019$ / shares | |
Minimum [Member] | |
Fair value of common stock at measurement date | $ 0.20 |
Expected term at issuance | 2 years |
Expected average volatility | 324.00% |
Risk-free interest rate | 2.33% |
Maximum [Member] | |
Fair value of common stock at measurement date | $ 0.49 |
Expected term at issuance | 5 years |
Expected average volatility | 631.00% |
Risk-free interest rate | 2.57% |
CAPITAL STOCK (Details 1)
CAPITAL STOCK (Details 1) - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Exercised | ||
Granted | $ 0.50 | |
Exercised | ||
Forfeited | ||
Warrants [Member] | ||
Number of shares outstanding, beginning | 11,238 | |
Granted | 588,125 | 112,238 |
Exercised | ||
Forfeited | ||
Number of shares outstanding, ending | 700,363 | 11,238 |
Weighted average exercise price outstanding | $ 0.35 | |
Granted | 0.28 | 0.35 |
Exercised | ||
Forfeited | ||
Weighted average exercise price outstanding | $ 0.29 | $ 0.35 |
CAPITAL STOCK (Details 2)
CAPITAL STOCK (Details 2) - $ / shares | 6 Months Ended | ||
Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Number of exercisable | 2,700,000 | 2,650,000 | 2,650,000 |
Warrants Outstanding [Member] | |||
Number of Outstanding | 700,363 | ||
Weighted Average Remaining Contractual Life (Years) | 3 years 4 months 24 days | ||
Weighted average exercise price outstanding | $ 0.29 | ||
Number of exercisable | 700,363 |
CAPITAL STOCK (Details 3)
CAPITAL STOCK (Details 3) - Options [Member] | 6 Months Ended |
Jun. 30, 2019$ / shares | |
Fair values | $ 0.30 |
Exercise price | $ 0.50 |
Expected term at issuance | 3 years |
Expected average volatility | 94.62% |
Risk-free interest rate | 2.34% |
CAPITAL STOCK (Details 4)
CAPITAL STOCK (Details 4) - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Stock Options | ||
Number of shares outstanding, beginning | 2,650,000 | 2,650,000 |
Options issued | 50,000 | |
Options expired | ||
Exercised | ||
Number of shares outstanding, ending | 2,700,000 | 2,650,000 |
Weighted average excercise price | ||
Number of shares outstanding, beginning | $ 0.33 | $ 0.33 |
Options issued | 0.50 | |
Options expired | ||
Options exercised | ||
Number of shares outstanding, ending | 0.34 | 0.33 |
Weighted average grant date fair value | ||
Number of shares outstanding, beginning | 0.30 | 0.33 |
Options issued | ||
Number of shares outstanding, ending | $ 0.30 | $ 0.30 |
Weighted average remaining contractual life | ||
Weighted average contractual life, beginning | 5 years 11 months 1 day | 6 years 11 months 1 day |
Weighted average contractual life, issued | 2 years 8 months 23 days | |
Weighted average contractual life, ending | 5 years 4 months 13 days | 5 years 11 months 1 day |
CAPITAL STOCK (Details 5)
CAPITAL STOCK (Details 5) - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Stock Options | ||
Number of shares outstanding, beginning | 2,650,000 | 2,650,000 |
Options issued | 50,000 | |
Options expired | ||
Options exercised | ||
Number of shares outstanding, ending | 2,700,000 | 2,650,000 |
Weighted average excercise price | ||
Number of shares outstanding, beginning | $ 0.33 | $ 0.33 |
Options issued | 0.50 | |
Options expired | ||
Options exercised | ||
Number of shares outstanding, ending | 0.34 | 0.33 |
Weighted average grant date fair value | ||
Number of shares outstanding, beginning | 0.30 | 0.33 |
Options issued | ||
Number of shares outstanding, ending | $ 0.30 | $ 0.30 |
Weighted average remaining contractual life | ||
Weighted average contractual life, issued | 2 years 8 months 23 days | |
Vested And Unvested Options Outstanding [Member] | ||
Stock Options | ||
Number of shares outstanding, beginning | ||
Options issued | 50,000 | |
Options vested | 50,000 | |
Options expired | ||
Options exercised | ||
Number of shares outstanding, ending | ||
Weighted average excercise price | ||
Number of shares outstanding, beginning | ||
Options issued | 0.50 | |
Options vested | 0.50 | |
Options expired | ||
Options exercised | ||
Number of shares outstanding, ending | ||
Weighted average grant date fair value | ||
Number of shares outstanding, beginning | ||
Options issued | 0.30 | |
Options vested | 0.30 | |
Number of shares outstanding, ending | ||
Weighted average remaining contractual life | ||
Weighted average contractual life, issued | 2 years 8 months 23 days | |
Weighted average contractual life, vested | 2 years 8 months 23 days |
CAPITAL STOCK (Details Narrativ
CAPITAL STOCK (Details Narrative) - USD ($) | Jan. 08, 2019 | Aug. 15, 2018 | Oct. 31, 2018 | Aug. 20, 2018 | Jun. 15, 2018 | Apr. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2011 | Jun. 18, 2019 | May 31, 2019 | May 10, 2019 |
Preferred Stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||
Preferred Stock, shares authorized | 1,000,000 | 1,000,000 | 1,000,000 | |||||||||||||
Preferred Stock, shares issued | 200,000 | 200,000 | 200,000 | |||||||||||||
Preferred Stock, shares outstanding | 200,000 | 200,000 | 200,000 | |||||||||||||
Common Stock, par or stated value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||
Common Stock, shares issued | 70,588 | 27,566,515 | 27,566,515 | 19,975,927 | 6,400,000 | 190,000 | ||||||||||
Common Stock, shares outstanding | 27,566,515 | 27,566,515 | 19,975,927 | |||||||||||||
Common Stock, shares issuable | 288,666 | 288,666 | 1,168,666 | |||||||||||||
Share Price | $ 0.08 | $ 0.17 | ||||||||||||||
Repayment of outstanding convertible note | $ 17,688 | |||||||||||||||
Common stock issued, value | 5,647 | $ 6,400 | $ 43,500 | |||||||||||||
Gain from extinguishment of debt | $ 12,041 | $ (12,041) | $ 130,859 | |||||||||||||
Shares issued for Services | 250,000 | |||||||||||||||
Shares issued for Services, amount | $ 37,500 | |||||||||||||||
Prepaid Consulting Expense | $ 11,507 | |||||||||||||||
Shares issued for debt | 580,000 | 580,000 | ||||||||||||||
Shares issued for debt, amount | $ 241,059 | $ 241,059 | ||||||||||||||
Shares issued for cash | 25,000 | |||||||||||||||
Shares issued for Cash, amount | $ 4,250 | |||||||||||||||
Common stock shares issuable upon exercise of stock options | 918,666 | 918,666 | 1,168,666 | |||||||||||||
Intrinsic value | $ 0 | $ 0 | $ 0 | |||||||||||||
Market price | $ 0.151 | |||||||||||||||
Shares issued for debt | 580,000 | 580,000 | ||||||||||||||
Shares issued for debt, amount | $ 241,059 | $ 241,059 | ||||||||||||||
Stock options One [Member] | ||||||||||||||||
Stock based compensation expense | $ 37,061 | |||||||||||||||
Expiry terms description | Company granted 50,000 options to consultants with an exercise price of $0.50 vested immediately and the fair value of these options were calculated using the Black-Scholes-Merton model. | |||||||||||||||
Exercise price | $ 0.50 | |||||||||||||||
Stock options [Member] | ||||||||||||||||
Common stock shares issuable upon exercise of stock options | 2,650,000 | 2,650,000 | ||||||||||||||
Intrinsic value | $ 112,490 | $ 112,490 | $ 56,990 | |||||||||||||
Stock based compensation expense | $ 151,490 | |||||||||||||||
Expiry terms description | the expiry terms of 875,000 options granted during year ended December 31, 2017 were extended for two years, | |||||||||||||||
Description for exercise price | One hundred thousand of those options had an exercise price of $.0001, and 250,000 options at an exercise price of $0.01 vested immediately and were valued at the fair value of the Company’s stock at the measurement date less the exercise price | |||||||||||||||
Stock options vested | 2,300,000 | 2,300,000 | ||||||||||||||
Fair value of stock options vested | $ 433,870 | $ 433,870 | ||||||||||||||
Class of warrants or rights outstanding | 1,850,000 | 1,850,000 | 350,000 | |||||||||||||
President and Director [Member] | ||||||||||||||||
Common Stock, shares issued | 70,588 | 27,566,515 | 27,566,515 | 19,975,927 | 50,000 | |||||||||||
Share Price | $ 0.15 | $ 0.25 | ||||||||||||||
Common stock issued, value | $ 5,647 | $ 12,500 | ||||||||||||||
Shares issued for debt | 222,000 | |||||||||||||||
Shares issued for debt | 222,000 | 222,000 | ||||||||||||||
Shares issued for debt, amount | $ 33,300 | $ 33,300 | ||||||||||||||
President and CEO [Member] | ||||||||||||||||
Share Price | $ 0.12 | |||||||||||||||
Shares issued for cash | 97,500 | |||||||||||||||
Shares issued for Cash, amount | $ 11,700 | |||||||||||||||
Consulting [Member] | ||||||||||||||||
Class B Preferred stock issue for services, shares | 200,000 | |||||||||||||||
Class B Preferred stock issue for services, amount | $ 7,500 | |||||||||||||||
Convertible Notes Payable [Member] | ||||||||||||||||
Shares issued for Services | 50,000 | |||||||||||||||
Shares issued for Services, amount | $ 5,500 | |||||||||||||||
Warrant for common shares | 112,238 | |||||||||||||||
Warrant, per share | $ 0.35 | |||||||||||||||
Warrants granted | $ 11,224 | |||||||||||||||
Fair value of warrants | $ 112,238 | |||||||||||||||
Class B Preferred Stock Number of Shares | ||||||||||||||||
Preferred Stock, par value | $ .001 | |||||||||||||||
Preferred Stock, shares authorized | 1,000,000 | |||||||||||||||
Shares issued for Services | ||||||||||||||||
Preferred Stock Voting Rights | 10,000 votes per share | |||||||||||||||
Dividend Rate | 8.00% | |||||||||||||||
Redemption description | The Class B Preferred Stock shall be redeemed by the Corporation for 100% of the original purchase price plus the amount of cash dividends accrued on the earlier of 6 months from the date of issuance, or the date that the Corporation received its funding from any outside source in conjunction with a merger, reverse merger or any change of control. |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) | Apr. 08, 2019USD ($)integer$ / sharesshares | Feb. 07, 2019USD ($)$ / sharesshares | Jan. 15, 2019USD ($)$ / sharesshares | Jan. 08, 2019USD ($)shares | Jan. 03, 2019USD ($)$ / sharesshares | Mar. 14, 2017USD ($) | Jan. 11, 2017USD ($) | Dec. 12, 2016 | Jun. 18, 2019USD ($)integershares | Jan. 23, 2019USD ($) | Jun. 15, 2018USD ($)$ / sharesshares | Dec. 31, 2016USD ($) | Aug. 31, 2015USD ($)$ / sharesshares | Jun. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($)shares | Dec. 31, 2017USD ($)$ / shares | Dec. 31, 2016USD ($) | Dec. 31, 2019USD ($)shares | May 31, 2019shares |
Conversion price | $ / shares | $ 0.19 | $ 0.19 | $ 0.19 | |||||||||||||||||||
Prepayment related to future private placement offering | $ 80,000 | $ 20,000 | ||||||||||||||||||||
Subscription payable | $ 100,000 | $ 100,000 | $ 20,000 | |||||||||||||||||||
Common stock | shares | 70,588 | 6,400,000 | 27,566,515 | 27,566,515 | 19,975,927 | 190,000 | ||||||||||||||||
Benefitial conversion feature | $ 181,099 | |||||||||||||||||||||
Accrued interest | $ 204,863 | 204,863 | $ 196,083 | |||||||||||||||||||
Amortization of debt discount | 358,722 | 4,793 | ||||||||||||||||||||
Gain from extinguishment of debt | $ 12,041 | (12,041) | $ 130,859 | |||||||||||||||||||
AH Originals, Inc [Member] | ||||||||||||||||||||||
Interest rate | 3.00% | |||||||||||||||||||||
Debt discount | $ 211,123 | |||||||||||||||||||||
Promissory note | 447,150 | |||||||||||||||||||||
Convertible Promissory Notes 5 [Member] | ||||||||||||||||||||||
Convertible promissory note | $ 38,500 | |||||||||||||||||||||
Common stock | shares | 225,000 | |||||||||||||||||||||
Exercisable period | 5 years | |||||||||||||||||||||
Common stock exercisable price | $ / shares | $ 0.35 | |||||||||||||||||||||
Convertible promissory note aggregate amount | $ 115,500 | |||||||||||||||||||||
Convertible promissory note conversion description | convertible into common stock at the lower of the lowest trading price within the prior twenty days of the note or 60% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the conversion date. | |||||||||||||||||||||
Number of convertible note | integer | 3 | |||||||||||||||||||||
Interest rate | 8.00% | |||||||||||||||||||||
Maturity Date | Jan. 8, 2020 | |||||||||||||||||||||
Fair value of warrants | $ 47,531 | |||||||||||||||||||||
Share price | $ / shares | $ 0.49 | |||||||||||||||||||||
Expected average volatility | 621.00% | |||||||||||||||||||||
Benefitial conversion feature | $ 134,001 | |||||||||||||||||||||
Accrued interest | 192,501 | 192,501 | ||||||||||||||||||||
Debt discount | 133,785 | 133,785 | ||||||||||||||||||||
Promissory Notes Payable [Member] | AH Originals, Inc [Member] | ||||||||||||||||||||||
Interest rate | 3.00% | |||||||||||||||||||||
Accrued interest | $ 236,468 | |||||||||||||||||||||
Debt discount | 211,123 | |||||||||||||||||||||
Promissory note | $ 447,150 | |||||||||||||||||||||
Convertible Promissory Note 4 [Member] | ||||||||||||||||||||||
Interest rate | 12.00% | |||||||||||||||||||||
Maturity Date | Oct. 25, 2019 | |||||||||||||||||||||
Fair value of warrants | $ 47,531 | |||||||||||||||||||||
Share price | $ / shares | $ 0.49 | |||||||||||||||||||||
Expected average volatility | 324.00% | |||||||||||||||||||||
Benefitial conversion feature | $ 45,500 | |||||||||||||||||||||
Accrued interest | 93,139 | 93,139 | ||||||||||||||||||||
Debt discount | 91,000 | |||||||||||||||||||||
Note payable issued | $ 45,500 | |||||||||||||||||||||
Terms of conversion feature | Convertible into common stock at the lower of the lowest trading price within the prior twenty-five days of the note or a fixed conversion price of 50% multiplied by the lowest traded price of the common stock during the twenty-five consecutive trading day period immediately preceding the conversion date | |||||||||||||||||||||
Liabilities related to stock settled | $ 45,500 | |||||||||||||||||||||
Shares issuable upon exercise of warrants | shares | 97,500 | |||||||||||||||||||||
Exercise price or warrants or rights | $ / shares | $ 0.35 | |||||||||||||||||||||
Maturity period of warrants | 3 years | |||||||||||||||||||||
Original issue discount | $ 4,000 | |||||||||||||||||||||
Unamortized discount | 40,698 | 40,698 | ||||||||||||||||||||
Convertible Promissory Note 3 [Member] | ||||||||||||||||||||||
Interest rate | 10.00% | |||||||||||||||||||||
Maturity Date | Jan. 23, 2020 | |||||||||||||||||||||
Benefitial conversion feature | $ 88,667 | |||||||||||||||||||||
Accrued interest | 99,178 | 99,178 | ||||||||||||||||||||
Debt discount | 96,667 | |||||||||||||||||||||
Note payable issued | $ 58,000 | |||||||||||||||||||||
Terms of conversion feature | Convertible into common stock at a fixed conversion price of 60% of the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the notice of conversion | |||||||||||||||||||||
Liabilities related to stock settled | $ 38,667 | |||||||||||||||||||||
Original issue discount | $ 5,000 | |||||||||||||||||||||
Unamortized discount | 54,656 | 54,656 | ||||||||||||||||||||
Convertible Promissory Note 2 [Member] | ||||||||||||||||||||||
Interest rate | 12.00% | |||||||||||||||||||||
Maturity Date | Oct. 3, 2019 | |||||||||||||||||||||
Fair value of warrants | $ 43,125 | |||||||||||||||||||||
Share price | $ / shares | $ 0.20 | |||||||||||||||||||||
Expected average volatility | 631.00% | |||||||||||||||||||||
Benefitial conversion feature | $ 118,125 | |||||||||||||||||||||
Accrued interest | 177,547 | 177,547 | ||||||||||||||||||||
Debt discount | 172,500 | |||||||||||||||||||||
Note payable issued | $ 86,250 | |||||||||||||||||||||
Terms of conversion feature | Convertible into common stock at the lower of the lowest trading price within the prior twenty-five days of the execution of the note or a fixed conversion price of 50% multiplied by the lowest traded price of the common stock during the twenty-five consecutive trading day period immediately preceding the conversion date | |||||||||||||||||||||
Liabilities related to stock settled | $ 86,250 | |||||||||||||||||||||
Shares issuable upon exercise of warrants | shares | 215,625 | |||||||||||||||||||||
Exercise price or warrants or rights | $ / shares | $ 0.20 | |||||||||||||||||||||
Maturity period of warrants | 5 years | |||||||||||||||||||||
Unamortized discount | 59,603 | 59,603 | ||||||||||||||||||||
Convertible Promissory Note 1 [Member] | ||||||||||||||||||||||
Interest rate | 5.00% | |||||||||||||||||||||
Maturity Date | Jan. 15, 2020 | |||||||||||||||||||||
Fair value of warrants | $ 10,276 | |||||||||||||||||||||
Share price | $ / shares | $ 0.21 | |||||||||||||||||||||
Expected average volatility | 324.00% | |||||||||||||||||||||
Benefitial conversion feature | $ 74,532 | |||||||||||||||||||||
Accrued interest | 93,672 | 93,672 | ||||||||||||||||||||
Debt discount | 92,308 | |||||||||||||||||||||
Note payable issued | $ 60,000 | |||||||||||||||||||||
Terms of conversion feature | Convertible into common stock at the lower of $0.21 per share or a fixed conversion price of 65% multiplied by the lowest traded price of the common stock during the ten consecutive trading day period immediately preceding the notice of conversion | |||||||||||||||||||||
Liabilities related to stock settled | $ 32,308 | |||||||||||||||||||||
Shares issuable upon exercise of warrants | shares | 50,000 | |||||||||||||||||||||
Exercise price or warrants or rights | $ / shares | $ 0.21 | |||||||||||||||||||||
Maturity period of warrants | 2 years | |||||||||||||||||||||
Original issue discount | $ 3,000 | |||||||||||||||||||||
Unamortized discount | 50,232 | 50,232 | ||||||||||||||||||||
Unsecured Notes Payable Three [Member] | Investor [Member] | ||||||||||||||||||||||
Interest rate | 4.00% | |||||||||||||||||||||
Maturity Date | Mar. 14, 2018 | |||||||||||||||||||||
Notes Payable | $ 5,000 | 5,419 | 5,419 | 5,319 | ||||||||||||||||||
Unsecured Notes Payable Two [Member] | Investor [Member] | ||||||||||||||||||||||
Interest rate | 5.00% | |||||||||||||||||||||
Maturity Date | Jun. 30, 2017 | |||||||||||||||||||||
Notes Payable | 8,089 | 8,089 | 7,909 | |||||||||||||||||||
Proceeds from unsecured notes | $ 5,000 | $ 2,200 | ||||||||||||||||||||
Unsecured Notes Payable One [Member] | ||||||||||||||||||||||
Notes Payable | $ 25,000 | $ 25,000 | 25,000 | |||||||||||||||||||
Proceeds from unsecured notes | $ 12,500 | |||||||||||||||||||||
Gross proceeds from unsecured notes | $ 25,000 | |||||||||||||||||||||
Unsecured Notes Payable [Member] | November 25, 2014 [Member] | ||||||||||||||||||||||
Interest rate | 10.00% | 10.00% | ||||||||||||||||||||
Note payable issued | $ 100,000 | $ 100,000 | ||||||||||||||||||||
Notes Payable | 166,355 | $ 166,355 | 157,855 | |||||||||||||||||||
Unsecured Notes Payable [Member] | April 1, 2016 [Member] | Forbearance agreement [Member] | ||||||||||||||||||||||
Interest rate | 12.00% | |||||||||||||||||||||
Maturity Date | Sep. 30, 2016 | |||||||||||||||||||||
Shares to be issued under agreement, shares | shares | 150,000 | |||||||||||||||||||||
Shares to be issued under agreement, value | $ 150,000 | |||||||||||||||||||||
Shares issued against extension of maturity date, shares | shares | 50,000 | |||||||||||||||||||||
Shares issued against extension of maturity date, value | $ 50,000 | |||||||||||||||||||||
Amendment to maturity date | Aug. 31, 2017 | |||||||||||||||||||||
Convertible Promissory Note [Member] | Investor [Member] | ||||||||||||||||||||||
Interest rate | 5.00% | |||||||||||||||||||||
Fair value of warrants | $ 11,224 | |||||||||||||||||||||
Share price | $ / shares | $ 0.11 | |||||||||||||||||||||
Expected average volatility | 273.00% | |||||||||||||||||||||
Benefitial conversion feature | $ 56,650 | |||||||||||||||||||||
Debt discount | $ 37,413 | |||||||||||||||||||||
Shares issuable upon exercise of warrants | shares | 112,238 | |||||||||||||||||||||
Exercise price or warrants or rights | $ / shares | $ 0.35 | |||||||||||||||||||||
Maturity period of warrants | 2 years | |||||||||||||||||||||
Original issue discount | $ 9,738 | |||||||||||||||||||||
Notes Payable | $ 112,238 | 319,165 | $ 319,165 | 99,968 | ||||||||||||||||||
Date Issued | Jun. 15, 2019 | |||||||||||||||||||||
Conversion price description | the lower of $0.35 per share or 75% multiplied by the lowest traded price of the common stock during the ten consecutive trading day period immediately preceding the notice of conversion | |||||||||||||||||||||
Debt discount including original issue discount | $ 115,024 | 338,974 | 338,974 | 52,720 | ||||||||||||||||||
Amortization of debt discount | 358,722 | |||||||||||||||||||||
Debt conversion converted amount | $ 17,688 | |||||||||||||||||||||
Debt conversion converted instrument shares issued | shares | 70,588 | |||||||||||||||||||||
Gain from extinguishment of debt | $ 12,041 | |||||||||||||||||||||
Repayment of convertible debt | $ 135,000 | |||||||||||||||||||||
Unsecured Notes Payable Four [Member] | Investor [Member] | ||||||||||||||||||||||
Conversion price | $ / shares | $ 1 | |||||||||||||||||||||
Interest rate | 8.00% | |||||||||||||||||||||
Maturity Date | Aug. 8, 2016 | |||||||||||||||||||||
Fair value of warrants | ||||||||||||||||||||||
Shares issuable upon exercise of warrants | shares | ||||||||||||||||||||||
Maturity period of warrants | ||||||||||||||||||||||
Notes Payable | $ 50,000 | $ 65,500 | $ 65,500 | $ 63,500 |
ACQUISITIONS OF ASSETS (Details
ACQUISITIONS OF ASSETS (Details) | Jun. 18, 2019USD ($) |
Total acquired assets and assumed liabilities, gross | $ 291,613 |
Less Assumed Liabilities | 16,336 |
Total acquired assets and assumed liabilities, net | 275,277 |
AH Originals, Inc. [Member] | Web Site [Member] | |
Acquired assets and assumed liabilities | 10,690 |
AH Originals, Inc. [Member] | Patent [Member] | |
Acquired assets and assumed liabilities | 5,510 |
AH Originals, Inc. [Member] | Inventory [Member] | |
Acquired assets and assumed liabilities | 60,815 |
AH Originals, Inc. [Member] | Equipment [Member] | |
Acquired assets and assumed liabilities | $ 214,598 |
ACQUISITIONS OF ASSETS (Detai_2
ACQUISITIONS OF ASSETS (Details Narrative) - AH Originals, Inc. [Member] | 1 Months Ended |
Jun. 18, 2019USD ($) | |
Acquisition of assets from related party | $ 6,400,000 |
Promissory note | $ 447,150 |
Interest rate | 3.00% |
Prepayment amount | $ 32,850 |
Debt discount | $ 211,123 |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details Narrative) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2014 |
DISCONTINUED OPERATIONS (Details Narrative) | |||
Ownership | 51.00% | ||
Current liabilities from discontinued operations | $ 84,281 | $ 84,281 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Jan. 08, 2019 | Oct. 31, 2018 | Mar. 31, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | May 10, 2019 | Aug. 15, 2018 |
Gain from extinguishment of debt | $ 12,041 | $ (12,041) | $ 130,859 | |||||||||
Issuance shares of common stock, Shares | 50,000 | |||||||||||
Issuance shares of common stock, Value | $ 12,500 | |||||||||||
Common stock value per share | $ 0.25 | |||||||||||
Repayment of related party advance | $ 62,425 | 75,000 | ||||||||||
Related party loans and accrued interest | $ 239,477 | $ 239,477 | $ 234,273 | |||||||||
Interest rate | 5.00% | |||||||||||
Shares issued for debt | 580,000 | 580,000 | ||||||||||
Shares issued for debt, amount | $ 241,059 | $ 241,059 | ||||||||||
Price per share | $ 0.19 | $ 0.19 | $ 0.19 | |||||||||
Loan maturity date description | June 30, 2017 and September 30, 2017 | |||||||||||
Bad debt expenses | 5,936 | |||||||||||
Advances from related party | $ 205,767 | $ 205,767 | $ 255,296 | |||||||||
Expenses paid by related party | $ 25,396 | $ 129,658 | ||||||||||
Shares issued for debt | 580,000 | 580,000 | ||||||||||
Share Price | $ 0.08 | $ 0.17 | ||||||||||
Loan to Related Party[Member] | ||||||||||||
Interest rate | 5.00% | |||||||||||
Loan to related party | $ 20,000 | |||||||||||
President and Director [Member] | ||||||||||||
Shares issued for debt | 222,000 | 222,000 | ||||||||||
Shares issued for debt, amount | $ 33,300 | $ 33,300 | ||||||||||
Shares issued for debt | 222,000 | |||||||||||
Share Price | $ 0.15 | $ 0.25 | ||||||||||
CEO And Board Of Directors [Member] | ||||||||||||
Advances from related party | 33,710 | $ 33,710 | $ 23,589 | |||||||||
Proceeds from Related Party | $ 284,900 | |||||||||||
President [Member] | ||||||||||||
Repayment of related party advance | ||||||||||||
Advances from related party | $ 172,058 | 172,058 | $ 231,708 | |||||||||
Expenses paid by related party | $ 15,275 | |||||||||||
Individual [Member] | ||||||||||||
Proceeds from Related Party | $ 160,650 | |||||||||||
Loan To Related Party [Member] | ||||||||||||
Reduction of loans receivable, related party for payment of an accrued liability | $ 14,463 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) | Jun. 30, 2019USD ($) |
Year Ending December 31: | |
2019 | $ 11,850 |
Thereafter | |
Total minimum future rentals | $ 11,850 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended |
Jun. 18, 2019 | Mar. 31, 2019 | Jun. 30, 2019 | |
Royalty expense | $ 0 | ||
Lease expire date | Sep. 30, 2019 | ||
Pending Litigation #1 [Member] | |||
Alleged Damages | 26,595 | ||
Pending Litigation #2 [Member] | |||
Alleged Damages | 15,000 | ||
Pending Litigation #3 [Member] | |||
Alleged Damages | $ 40,000 | ||
Settlement Agreement [Member] | True Beauty, LLC [Member] | |||
Date | 3/15/2015 | ||
Gain on settlement | $ 5,394 | ||
Litigation settlement, damages short | 37,500 | ||
Litigation settlement, amount paid | $ 5,000 |
NET LOSS PER SHARE (Details)
NET LOSS PER SHARE (Details) - shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Potentially dilutive securities | 12,824,769 | 3,706,032 |
Warrants [Member] | ||
Potentially dilutive securities | 700,363 | 112,238 |
Convertible Notes Payable [Member] | ||
Potentially dilutive securities | 9,424,406 | 943,794 |
Stock options #1 [Member] | ||
Potentially dilutive securities | 2,700,000 | 2,650,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] | Jul. 02, 2019USD ($)shares |
Common stock issued for services, shares | shares | 300,000 |
Common stock issued for services, value | $ | $ 60,000 |