Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 07, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | Max Sound Corporation | |
Entity Central Index Key | 1,353,499 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | Yes | |
Is Entity a Voluntary Filer? | Yes | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 1,938,358,872 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
Balance Sheets (Unaudited)
Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash | $ 3,042 | $ 185,026 |
Prepaid expenses | 97,481 | 62,230 |
Debt offering costs - net | 32,031 | 42,499 |
Total Current Assets | 132,554 | 289,755 |
Property and equipment, net | 50,655 | 61,423 |
Other Assets | ||
Security deposit | 413 | 413 |
Total Other Assets | 413 | 413 |
Total Assets | 183,622 | 351,591 |
Current Liabilities | ||
Accounts payable | 307,648 | 238,594 |
Accrued expenses | 692,196 | 453,387 |
Demand Note | 20,000 | |
Derivative liabilities | 4,956,605 | 5,906,940 |
Convertible note payable, net of debt discount of $832,238 and $1,227,865 respectively | 5,188,155 | 4,369,733 |
Total Current Liabilities | 11,144,604 | 10,988,654 |
Stockholders' Deficit | (10,960,982) | (10,637,063) |
Preferred stock, $0.0001 par value; 10,000,000 shares authorized, No shares issued and outstanding Series, A Convertible Preferred stock, $0.00001 par value; 10,000,000 shares authorized, 5,000,000 and 0 shares issued and outstanding, respectively | 50 | 50 |
Common stock, $0.00001 par value; 4,250,000,000 shares authorized, 1,862,959,202 and 935,642,114 shares issued and outstanding, respectively | 18,758 | 9,355 |
Additional paid-in capital | 67,308,177 | 64,355,387 |
Treasury stock | (534,575) | (519,575) |
Accumulated deficit | (77,753,392) | (74,482,280) |
Total Stockholders' Deficit | (10,960,982) | (10,637,063) |
Total Liabilities and Stockholders' Deficit | $ 183,622 | $ 351,591 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Common stock, shares outstanding | 2,866,652 | |
Common Stock | ||
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 4,250,000,000 | 2,250,000,000 |
Common stock, shares issued | 1,862,959,202 | |
Common stock, shares outstanding | 935,642,114 | |
Preferred Stock | ||
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Series A Preferred Stock | ||
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 5,000,000 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Revenue | ||||
Operating Expenses | ||||
General and administrative | 107,721 | 157,362 | 319,690 | 899,267 |
Consulting | 30,000 | 20,750 | 92,600 | 160,582 |
Professional fees | 99,525 | 57,909 | 416,404 | 287,662 |
Website development | 8,700 | 23,700 | 28,000 | |
Compensation | 353,361 | 198,000 | 677,361 | 608,000 |
Total Operating Expenses | 599,307 | 434,021 | 1,529,755 | 1,983,511 |
Loss from Operations | (599,307) | (434,021) | (1,529,755) | (1,983,511) |
Other Income / (Expense) | ||||
Other income | 26 | 36,532 | ||
Interest expense | (129,459) | (70,462) | (329,710) | (234,607) |
Derivative Expense | (30,579) | (764,557) | (573,751) | (3,269,969) |
Amortization of debt offering costs | (19,046) | (21,471) | (81,743) | (79,471) |
Loss on debt settlement | 14,305 | (239,203) | (301,965) | |
Amortization of debt discount | (544,586) | (1,065,142) | (2,200,803) | (3,912,707) |
Change in fair value of embedded derivative liability | 1,392,436 | 227,527 | 1,683,827 | 303,824 |
Total Other Income / (Expense) | 668,766 | (1,679,800) | (1,741,357) | (7,458,363) |
Provision for Income Taxes | ||||
Net Income (Loss) | $ 69,459 | $ (2,113,821) | $ (4,091,433) | $ (9,441,874) |
Net Loss Per Share - Diluted | $ 0 | $ 0 | $ 0 | $ (0.01) |
Weighted average number of shares outstanding during the year Diluted | 1,494,672,259 | 836,376,412 | 1,188,458,679 | 752,906,044 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash Flows From Operating Activities: | ||
Net Loss | $ (4,091,433) | $ (9,441,874) |
Adjustments to reconcile net loss to net cash used in operations | ||
Depreciation/Amortization | 35,868 | 60,383 |
Stock and stock options issued for services | 54,600 | 105,894 |
Warrants issued for services | 191,361 | 91,556 |
Amortization of intangible assets | 84,585 | |
Amortization of debt offering costs | 81,743 | 79,471 |
Amortization of debt discount | 2,200,803 | 3,912,707 |
Change in fair value of derivative liability | (1,683,827) | (318,129) |
Gain on debt extinguishment | (35,200) | |
Derivative Expense | 573,751 | 3,269,969 |
Changes in operating assets and liabilities: | ||
Cash paid on accrued interest | 4,927 | |
(Increase)/Decrease in prepaid expenses | (35,251) | 20,451 |
Increase accounts payable | 69,066 | 422,180 |
Increase in accrued expenses | 321,373 | 259,537 |
Increase in judgement payable | 820,321 | |
Net Cash Used In Operating Activities | (1,466,552) | (1,488,470) |
Cash Flows From Investing Activities: | ||
Purchase of property equipment | (25,100) | (6,398) |
Net Cash Used In Investing Activities | (25,100) | (6,398) |
Cash Flows From Financing Activities: | ||
Repayment of convertible note | 233,743 | 1,197,096 |
Proceeds from issuance of convertible note, less offering costs and OID costs paid | 1,578,411 | 2,550,348 |
Repayment of note payable | (20,000) | (60,000) |
Cash paid on common stock repurchase | 15,000 | |
Net Cash Provided by Financing Activities | 1,309,668 | 1,293,252 |
Net Decrease in Cash | (181,984) | (201,616) |
Cash at Beginning of Year | 185,026 | 211,064 |
Cash at End of Year | 3,042 | 9,448 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 4,297 | |
Cash paid for taxes | ||
Supplemental disclosure of non-cash investing and financing activities: | ||
Shares issued in conversion of convertible debt and accrued interest | 1,158,967 | 1,129,849 |
Reclassification to additional paid in capital for financial instruments that ceased to be a derivative liability | 1,557,265 | 3,365,559 |
Reclass of convertible debt to demand note | $ 100,000 |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Organization | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
Summary of Significant Accounting Policies and Organization | NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION (A) Organization and Basis of Presentation Max Sound Corporation (the "Company") was incorporated in Delaware on December 9, 2005, under the name 43010, Inc. The Company business operations are focused primarily on developing and launching audio technology software. Effective March 1, 2011, the Company filed with the State of Delaware a Certificate of Amendment of Certificate of Incorporation changing our name from So Act Network, Inc. to Max Sound Corporation. On August 9, 2016 the Company has moved a level down from OTCQB to OTC Pink Current Information where it is within the continued standards and pricing requirements as found in Section 2 of the OTCQB Eligibility Standards . It is management's opinion, however, that all material adjustments (consisting of normal and recurring adjustments) have been made which are necessary for a fair financial statements presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year. These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC on March 31, 2017. (B) Use of Estimates In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates. (C) Cash and Cash Equivalents For purposes of the cash flow statements, the Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. As of September 30, 2017 and December 31, 2016, the Company had no cash equivalents. (D) Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is provided using the straight-line method over the estimated useful life of three to five years. (E) Research and Development The Company has adopted the provisions of FASB Accounting Standards Codification No. 350, Intangibles - Goodwill & Other . (F) Concentration of Credit Risk The Company at times has cash in banks in excess of FDIC insurance limits. The Company had $0 in excess of FDIC insurance limits as of September 30, 2017 and December 31, 2016. (G) Revenue Recognition The Company recognized revenue on arrangements in accordance with FASB Codification Topic 605, “Revenue Recognition” (“ASC Topic 605”). Under ASC Topic 605, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured. The Company has not yet commenced revenue generating activities. (H) Impairment of Long-Lived Assets and Intangible Assets with Definite Life The Company accounts for its long-lived assets in accordance with ASC Topic 360-10-05, “Accounting for the Impairment or Disposal of Long-Lived Assets.” ASC Topic 360-10-05 requires that long-lived assets, such as technology rights, be reviewed for impairment annually, or whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposable value. The Company recorded $1,008,035 and $15,703,617 in impairment of the intangible asset for the year ended December 31, 2016 and the year ended December 31, 2015, respectively. As of December 31, 2016 the intangible assets were fully impaired. (I) Loss Per Share In accordance with accounting guidance now codified as FASB ASC Topic 260, “Earnings per Share,” The computation of basic and diluted loss per share for the nine months ended September 30, 2017 and 2016 excludes the common stock equivalents of the following potentially dilutive securities because their inclusion would be anti-dilutive: September 30, 2017 September 30, 2016 Stock Warrants (Exercise price - $0.25 - $.52/share) 19,220,690 18,270,690 Stock Options (Exercise price - $0.00250/share) 95,332,500 2,866,652 Convertible Debt (Exercise price - $0.0004 - $.0007/share) 12,625,229,167 2,791,745,292 Series A Convertible Preferred Shares ($0.0/share) 125,000,000 125,000,000 Total 12,864,782,357 2,937,882,634 The Company’s obligations to issue shares upon conversion of its outstanding convertible notes, the exercise of stock options and warrants and conversion of its preferred stock (the “Convertible Instruments”) at current market prices for its common stock exceeds by the 10,477,741,559 authorized but unissued shares of Common Stock as of the date of this report (the “Potentially Issuable Shares”). While it is uncertain whether the Company would receive requests to issue all of the Potentially Issuable Shares and the number of such shares fluctuates based on the market price of the Company’s common stock, the Company may increase the number of its authorized shares of common stock or effectuate a recapitalization, or a combination of both, in order to make available additional shares of its Common Stock for the Potentially Issuable Shares. Such action would require shareholder approval. Until such time as the Company has a sufficient number of shares of its Common Stock for issuance to cover the Potentially Issuable Shares, the Company could be subject to penalties and damages to the holders of the Convertible Instruments in the event it does not deliver the Potentially Issuable Shares upon request by a holder of the Convertible Instruments. Furthermore, the lack of available shares of common stock may be deemed a default under one or more of the Convertible Instruments. (J) Income Taxes The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”) Income Taxes. Under ASC 740-10-25, 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. 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 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company's federal income tax returns are no longer subject to examination by the IRS for the years prior to 2012, and the related state income tax returns are no longer subject to examination by state authorities for the years prior to 2011. (K) Business Segments The Company operates in one segment and therefore segment information is not presented. (L) Recent Accounting Pronouncements In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (ASU 2017-01), which revises the definition of a business and provides new guidance in evaluating when a set of transferred assets and activities is a business. This guidance will be effective for us in the first quarter of 2018 on a prospective basis, and early adoption is permitted. The Company has not yet determined the potential effects of the adoption of ASU 2016-15 on its Financial Statements. In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04), which eliminates step two from the goodwill impairment test. Under ASU 2017-04, an entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value up to the amount of goodwill allocated to that reporting unit. This guidance will be effective for us in the first quarter of 2020 on a prospective basis, and early adoption is permitted. The Company has not yet determined the potential effects of the adoption of ASU 2016-15 on its Financial Statements. In January 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) 2016-01, which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Changes to the current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Company is currently evaluating the impact of adopting this guidance. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Topic 842 affects any entity that enters into a lease, with some specified scope exemptions. The guidance in this Update supersedes Topic 840, Leases. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For public companies, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating the impact of adopting ASU No. 2016-02 on our financial statements. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) that clarifies how to apply revenue recognition guidance related to whether an entity is a principal or an agent. ASU 2016-08 clarifies that the analysis must focus on whether the entity has control of the goods or services before they are transferred to the customer and provides additional guidance about how to apply the control principle when services are provided and when goods or services are combined with other goods or services. The effective date for ASU 2016-08 is the same as the effective date of ASU 2014-09 as amended by ASU 2015-14, for annual reporting periods beginning after December 15, 2017, including interim periods within those years. The Company has not yet determined the impact of ASU 2016-08 on its financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation, or ASU No. 2016-09. The areas for simplification in this Update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public entities, the amendments in this Update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted in any interim or annual period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements, forfeitures, and intrinsic value should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively. Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term should be applied prospectively. An entity may elect to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using either a prospective transition method or a retrospective transition method. We are currently evaluating the impact of adopting ASU No. 2016-09 on our financial statements. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which provides further guidance on identifying performance obligations and improves the operability and understandability of licensing implementation guidance. The effective date for ASU 2016-10 is the same as the effective date of ASU 2014-09 as amended by ASU 2015-14, for annual reporting periods beginning after December 15, 2017, including interim periods within those years. In May 2016, the FASB issued ASU 2016-12 “Revenue from Contracts with Customers (Topic 606) - Narrow-Scope Improvements and Practical Expedients,” which amends the guidance on transition, collectability, non-cash consideration, and the presentation of sales and other similar taxes. ASU 2016-12 clarifies that, for a contract to be considered completed at transition, all (or substantially all) of the revenue must have been recognized under legacy GAAP. In addition, ASU 2016-12 clarifies how an entity should evaluate the collectability threshold and when an entity can recognize nonrefundable consideration received as revenue if an arrangement does not meet the standard’s contract criteria. The standard allows for both retrospective and modified retrospective methods of adoption. The Company has not yet determined the impact of ASU 2016-10 on its financial statements. In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Statements," which requires companies to measure credit losses utilizing a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2019 (fiscal year 2021 for the Company). The Company has not yet determined the potential effects of the adoption of ASU 2016-13 on its Financial Statements. In August 2016, the FASB issued ASU 2016-15, "Classification of Certain Cash Receipts and Cash Payments," which aims to eliminate diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows, and other Topics. ASU 2016-15 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2017 (fiscal year 2019 for the Company). The Company has not yet determined the potential effects of the adoption of ASU 2016-15 on its Financial Statements. In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, Interest–Imputation of Interest (Subtopic 835-30) (“ASU 2015-03”), which changes the presentation of debt issuance costs in financial statements. ASU 2015-03 requires an entity to present such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs will continue to be reported as interest expense. It is effective for annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The new guidance will be applied retrospectively to each prior period presented. The Company is currently in the process of evaluating the impact of adoption of ASU 2015-03 on its balance sheets. All other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable. (M) Fair Value of Financial Instruments The carrying amounts on the Company’s financial instruments including accounts payable, derivative liability, convertible note payable, and note payable, approximate fair value due to the relatively short period to maturity for these instruments. We adopted accounting guidance for financial and non-financial assets and liabilities (ASC 820). The adoption did not have a material impact on our results of operations, financial position or liquidity. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use. The following are the major categories of liabilities measured at fair value on a recurring basis: as of September 30, 2017 and December 31, 2016, using quoted prices in active markets for identical liabilities (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3): September 30, 2017 December 31, 2016 Fair Value Measurement Using Fair Value Measurement Using Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Derivative Liabilities — 4,956,605 — 4,956,605 — 5,906,940 — 5,906,940 (N) Stock-Based Compensation In December 2004, the FASB issued FASB Accounting Standards Codification No. 718, Compensation - Stock Compensation. Under FASB Accounting Standards Codification No. 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant. The Company applies this statement prospectively. Equity instruments (“instruments”) issued to other than employees are recorded on the basis of the fair value of the instruments, as required by FASB Accounting Standards Codification No. 718. FASB Accounting Standards Codification No. 505, Equity Based Payments to Non-Employees defines the measurement date and recognition period for such instruments. In general, the measurement date is when either a (a) performance commitment, as defined, is reached or (b) the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in the FASB Accounting Standards Codification. (O) Reclassification Certain amounts from prior periods have been reclassified to conform to the current period presentation. These reclassifications had no impact on the Company's net loss or cash flows. (P) Derivative Financial Instruments Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option-pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments. Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives. In addition, the fair value of freestanding derivative instruments such as warrants, are also valued using the Black-Scholes option-pricing model. (Q) Original Issue Discount For certain convertible debt issued, the Company provides the debt holder with an original issue discount. The original issue discount is recorded to debt discount, reducing the face amount of the note and is amortized to interest expense over the life of the debt. (R) Debt Issue Costs and Debt Discount The Company may pay debt issue costs, and record debt discounts in connection with raising funds through the issuance of convertible debt. These costs are amortized to interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. (S) Licensing & Distribution On June 20, 2015, the Company entered into a license agreement with Santok LTD of United Kingdom (“Santok). The term of the agreement is three years. Santok will pay the Company a royalty fee of $1.50 for each licensed product. Santok guarantees to the Company a minimum total of 150,000 cumulative licensed product installation with a minimum total guaranteed value of $225,000 over the three years of the agreement. If the total royalty paid is less than the guaranteed value, Santok will pay the difference. On July 13, 2015, the Company entered into a license agreement with Luna Mobile, Inc. of United States (“Luna). The term of the agreement is three years. Luna will pay the Company a royalty fee of $1.50 for each licensed product manufactured and sold. As of September 30, 2017 Luna Mobile continues to seek to distribute its products. |
Going Concern
Going Concern | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
Going Concern | NOTE 2 GOING CONCERN As reflected in the accompanying condensed unaudited financial statements, the Company had a net loss of $3,271,112 for the nine months ended September 30, 2017, has an accumulated deficit of $77,753,392 as of September 30, 2017, and has negative cash flow from operations of $1,466,552 for the nine months ended September 30, 2017. As the Company continues to incur losses, transition to profitability is dependent upon the successful commercialization of its products and achieving a level of revenues adequate to support the Company’s cost structure. The Company may never achieve profitability, and unless and until it does, the Company will continue to need to raise additional cash. Management intends to fund future operations through additional private or public debt or equity offerings. Based on the Company’s operating plan, existing working capital at December 31, 2016 was not sufficient to meet the cash requirements to fund planned operations through December 31, 2017 without additional sources of cash. The Company continues to explore various financing alternatives, including debt and equity financings and strategic partnerships, as well as trying to generate revenue. However, at this time, the Company has no commitments to obtain any additional funds, and there can be no assurance such funds will be available on acceptable terms or at all. If the Company is unable to obtain additional funding and improve its operations, the Company’s financial condition and results of operations may be materially adversely affected and the Company may not be able to continue operations. This raises substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern and do not include adjustments that might result from the outcome of this uncertainty. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 3 DEBT AND ACCOUNTS PAYABLE Debt consists of the following: AS of September 30, 2017 As of December 31, 2016 Convertible debt $ 6,020,393 $ 5,597,598 Less: debt discount (832,238 ) (1,227,865 ) Convertible debt - net 5,188,155 4,369,733 Demand note — 20,000 Total current debt 5,188,155 $ 4,389,733 (A) Convertible Debt During the nine months ended September 30, 2017 and year ended December 31, 2016, the Company issued convertible notes totaling $1,737,855, less the original issue discount and debt issue costs of $154,444, for net proceeds of $1,578,411 and $3,392,813, respectively. The convertible notes issued for nine months ended September 30, 2017 and year ended December 31, 2016, consist of the following terms: The convertible notes issued for nine months ended September 30, 2017 and year ended December 31, 2016, consist of the following terms: Nine months ended September 30, 2017 Amount of Principal Raised Year ended December 31, 2016 Amount of Principal Raised Interest Rate 0% - 12% 0% - 10% Default interest rate 14% - 22% 14% - 22% Maturity November 4, 2015 –August 3, 2018 November 4, 2015 –March 10, 2018 Conversion terms 1 65% of the “Market Price”, which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period prior to the conversion. 3,515,900 3,412,400 Conversion terms 2 65% of the “Market Price”, which is the one lowest trading prices for the common stock during the ten (10) trading day period prior to the conversion. 974,3597 624,087 Conversion terms 3 70% of the “Market Price”, which is the average of the lowest three (3) trading prices for the common stock during the fifteen (15) trading day period prior to the conversion. paid on conversion paid on conversion Conversion terms 4 75% of the “Market Price”, which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period prior to the conversion. 765,000 765,000 Conversion terms 5 60% of the “Market Price”, which is the lowest trading prices for the common stock during the fifteen (15) trading day period prior to the conversion. paid on conversion paid on conversion Conversion terms 6 Conversion at $0.10 per share Paid on conversion Paid on conversion Conversion terms 7 60% of the “Market Price”, which is the lowest trading prices for the common stock during the ten (10) trading day period prior to the conversion. paid on conversion 127,000 Conversion terms 8 65% of the “Market Price”, which is the two lowest trading prices for the common stock during the ten (10) trading day period prior to the conversion. 373,555 536,669 Conversion terms 9 65% of the “Market Price”, which is the two lowest trading prices for the common stock during the fifteen (15) trading day period prior to the conversion. paid on conversion 79,810 Conversion terms 10 65% of the “Market Price”, which is the one lowest trading prices for the common stock during the fifteen (15) trading day period prior to the conversion. paid on conversion paid on conversion Conversion terms 11 60% of the “Market Price”, which is the two lowest trading prices for the common stock during the twelve (12) trading day period prior to the conversion. paid on conversion 52,632 Conversion terms 12 61% of the “Market Price”, which is the average of the three lowest trading prices for the common stock during the ten (10) trading day period prior to the conversion. 123,000 — Convertible Debt 6,020,393 5,597,598 Less: Debt Discount (832,238 ) (1,227,865 ) Convertible Debt - net $ 5,188,155 $ 4,369,733 The debt holders are entitled, at their option, to convert all or part of the principal and accrued interest into shares of the Company’s common stock at conversion prices and terms discussed above. The Company classifies embedded conversion features in these notes and warrants as a derivative liability due to management’s assessment that the Company may not have sufficient authorized number of shares of common stock required to net-share settle or due to the existence of a ratchet due to an anti-dilution provision. See Note 4 regarding accounting for derivative liabilities. During the nine months ended September 30, 2017, the Company converted debt and accrued interest, totaling $1,158,967 into 934,317,088 shares of common stock During the year ended December 31, 2016, the Company converted debt and accrued interest, totaling $1,189,849 into 420,556,227 shares of common stock Convertible debt consisted of the following activity and terms: Convertible Debt Balance as of December 31, 2016 5,597,598 4% - 10% November 4, 2015 - March 10, 2018 Borrowings during the nine months ended September 30, 2017 1,737,855 8 % Non-Cash Reclassification of accrued interest converted 77,650 Repayments (233,743 ) Conversion of debt to into 934,317,088 shares of common stock with a valuation of $1,158,967 ($0.00058 - $0.00731/share) including the accrued interest of $77,650 (1,158,967 ) Convertible Debt Balance as of September 30, 2017 6,020,393 4% - 8% November 4, 2015 –August 31, 2018 (B) Debt Issue Costs During the nine months ended September 30, 2017, the Company paid debt issue costs totaling $71,275 During the nine months ended September 30, 2016, the Company paid debt issue costs totaling $51,939. The following is a summary of the Company’s debt issue costs: Nine months ended September 30, 2017 Year Ended December 31, 2016 Debt issue costs $ 333,898 262,623 Accumulated amortization of debt issue costs (301,867 ) (220,124 ) Debt issue costs - net $ 32,031 42,499 During the nine months ended September 30, 2017 and 2016 the Company amortized $81,743 and $79,471 of debt issue costs, respectively. (C) Debt Discount & Original Issue Discount During the nine months ended September 30, 2017 and year ended December 31, 2016, the Company recorded debt discounts totaling $1,805,178 and $3,313,472, respectively. The debt discount and the original issue discount recorded in 2017 and 2016 pertains to convertible debt that contains embedded conversion options that are required to be bifurcated and reported at fair value and original issue discounts. The Company amortized $2,200,803 and $3,912,707 during the nine months ended September 30, 2017 and 2016, respectively, to amortization of debt discount expense. Nine months ended September 30, 2017 Year Ended December 31, 2016 Debt discount $ 12,161,572 10,356,394 Accumulated amortization of debt discount (11,329,334 ) (9,128,529 ) Debt discount - Net $ 832,238 1,227,865 (D) Line of Credit – Related Party On July 6, 2017, the Company entered into a two year line of credit agreement with the principal stockholder in the amount of $100,000. The line of credit carries an interest rate of 4%. As of September 30, 2017, the principal stockholder has not advanced the Company any funds under the terms of this line of credit agreement. |
Convertible Debt - Derivative L
Convertible Debt - Derivative Liabilities | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
Convertible Debt - Derivative Liabilities | NOTE 4 DERIVATIVE LIABILITIES The Company identified conversion features embedded within convertible debt issued in 2016 and 2015 and warrants issued in 2016 and 2015. The Company has determined that the features associated with the embedded conversion option should be accounted for at fair value as a derivative liability. As a result of the application of ASC No. 815, the fair value of the conversion feature is summarized as follow: Derivative Liability -December 31, 2016 $ 5,906,940 Fair value at the commitment date for convertible instruments 2,290,760 Change in fair value of embedded derivative liability for warrants issued (212,753 ) Change in fair value of embedded derivative liability for convertible instruments (1,471,074 ) Reclassification to additional paid in capital for financial instruments that ceased to be a derivative liability (1,170,774 ) Change from repayments (386,494 ) Derivative Liability –September 30, 2017 $ 4,956,605 The Company recorded the debt discount to the extent of the gross proceeds raised, and expensed immediately the remaining value of the derivative as it exceeded the gross proceeds of the note. The Company recorded a derivative expense for the nine months ended September 30, 2017 and 2016 of $543,172 and $2,505,412, respectively. The fair value at the commitment and re-measurement dates for the Company’s derivative liabilities were based upon the following management assumptions as of September 30, 2017: Commitment Date Re-measurement Date Expected dividends: — — Expected volatility: 133% - 262% 151%-341.13 Expected term: 0.08 - 3 Years 0.01–1.65 Years Risk free interest rate: 0.06% - 1.60% 0.01% - 1.01% The fair value at the commitment and re-measurement dates for the Company’s derivative liabilities were based upon the following management assumptions as of December 31, 2016: Commitment Date Re-measurement Date Expected dividends: — — Expected volatility: 133% - 262% 157% -216% Expected term: 0.08 - 3 Years 0.01–2.40 Years Risk free interest rate: 0.06% - 1.60% 0.12% - .1.47% |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
Property and Equipment | NOTE 5 PROPERTY AND EQUIPMENT At September 30, 2017 and December 31, 2016, respectively, property and equipment is as follows: September 30, 2017 December 31, 2016 Website Development $ 294,795 $ 294,795 Furniture and Equipment 143,071 117,971 Leasehold Improvements 6,708 6,708 Software 54,598 54,598 Music Equipment 2,578 2,578 Office Equipment 80,710 80,710 Domain Name 1,500 1,500 Sign 628 628 Total 584,588 559,488 Less: accumulated depreciation and amortization (533,933 ) (498,065 ) Property and Equipment, Net $ 50,655 $ 61,423 Depreciation/amortization expense for the nine months ended September 30, 2017 and 2016 totaled $35,868 and $60,383, respectively. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 6 STOCKHOLDERS’ DEFICIT On March 4, 2015, the Company with the consent of the Majority Shareholder and Unanimous Written Consent of the Board of Directors created and authorized the issuance of Series A Convertible Preferred stock, with a par value of $0.00001 per share. The face amount of state value of each Preferred Share of stock is $0.96 and the conversion price of $0.04 per share. On June 24, 2015, the Company with the consent of the Majority Shareholder and Unanimous Written Consent of the Board of Directors filed with the State of Delaware an Amended Certificate of Incorporation increasing the authorized shares of common stock by 120,000,000 shares of common stock from 450,000,000 million shares of common stock to 570,000,000 shares of common stock. On September 24, 2015, the Company with the consent of the Majority Shareholder and Unanimous Written Consent of the Board of Directors filed with the State of Delaware an Amended Certificate of Incorporation increasing the authorized shares of common stock by 120,000,000 shares of common stock from 450,000,000 million shares of common stock to 570,000,000 shares of common stock. On August 19, 2015, the Company with the consent of the Majority Shareholder and Unanimous Written Consent of the Board of Directors filed with the State of Delaware an Amended Certificate of Incorporation increasing the authorized shares of common stock by 280,000,000 shares of common stock from 570,000,000 million shares of common stock to 850,000,000 shares of common stock. On January 13, 2016, the Company with the consent of the Majority Shareholder and Unanimous Written Consent of the Board of Directors filed with the Securities and Exchange Commission a Schedule 14C and with the State of Delaware an Amended Certificate of Incorporation increasing the authorized shares of common stock by 800,000,000 shares of common stock from 850,000,000 million shares of common stock to 1,650,000,000 shares of common stock. On April 4, 2017, the Company with the consent of the Majority Shareholder and Unanimous Written Consent of the Board of Directors filed with the Securities and Exchange Commission a Schedule 14C and with the State of Delaware an Amended Certificate of Incorporation increasing the authorized shares of common stock by 600,000,000 shares of common stock from 1,650,000,000 shares of common stock to 2,250,000,000 shares of common stock. On April 23, 2017, the Company with the consent of the Majority Shareholder and Unanimous Written Consent of the Board of Directors filed with the Securities and Exchange Commission a Schedule 14C and with the State of Delaware an Amended Certificate of Incorporation increasing the authorized shares of common stock by 1,000,000,000 shares of common stock from 2,250,000,000 shares of common stock to 3,250,000,000 shares of common stock. On October 4, 2017, the Company with the consent of the Majority Shareholder and Unanimous Written Consent of the Board of Directors filed with the Securities and Exchange Commission a Schedule 14C and with the State of Delaware an Amended Certificate of Incorporation increasing the authorized shares of common stock by 1,000,000,000 shares of common stock from 3,250,000,000 shares of common stock to 4,250,000,000 shares of common stock. (A) Common Stock During the nine months ended September 30, 2017, the Company issued the following common stock: Transaction Type Quantity Valuation Range of Value per share Conversion of convertible debt and accrued interest 934,317,088 $ 1,158,967 $0.00058 to- $0.00731 Services - rendered 6,000,000 54,600 $0.0011 - $0.0107 Shares repurchased (13,000,000 ) (15,000 ) $ .0014 Total shares issued 927,317,088 $ 1,198,567 During the year ended December 31, 2016, the Company issued the following common stock: Transaction Type Quantity Valuation Range of Value per share Conversion of convertible debt and accrued interest 420,556,227 $ 1,189,849 $0.00143 to- $0.01056 Services rendered 12,775,195 115,600 $0.09-$0.013 Patents 80,000,000 1,600,000 $ 0.02 Total shares issued 513,331,422 $ 2,905,449 The Company maintains on its books and within the above financials, debt to Venture Champion Asia Limited and ICG USA LLC or its designee(s) which is currently in default and has not been converted due to ICG’s settled administrative proceeding with the SEC, where the Company awaits any rightful exemption or regulatory no-action that would render any forward moving action compliant by all the parties. The Company announced that it entered into an Agreement with Vedanti Systems Limited and Vedanti Licensing Limited (VLL) that resolves their dispute over the international Optimized Data Transmission (ODT) patent portfolio previously owned by Vedanti. The Agreement further provides that VLL and the Company will become co-owners of the pioneering portfolio. In consideration of the patent portfolio purchase, the Company issued 80,000,000 shares of its common stock to VLL. This patent portfolio consists of patents in the following countries: The United States, Australia, Austria, Cyprus, Denmark, Spain, Finland, France, Ireland, Italy, Luxembourg, Monaco, Portugal, Sweden, Turkey, Belgium, Switzerland/ Liechtenstein, United Kingdom, Greece, Netherlands and Germany. The Company continues to pursue its litigations against Google. Return of Shares and Issuance of Preferred shares On March 4, 2015 the Company filed a form 8K with the SEC associated with the Company entering into a Securities Exchange Agreement and the Company filing with the Secretary of State Delaware a Certificate of Designations, Preferences and Rights whereby, among other things, the Company for good and valuable consideration, agreed that in consideration of a large shareholder exchanging 120,000,000 shares of common stock back to the Company, the shareholder would receive 5,000,000 shares of Series A Convertible Preferred Stock of the Company at a Stated Value of $0.96 per share and a Conversion Price of $0.04 per share. These 5,000,000 Series A Convertible Preferred Shares represent33.4% of the Company’s voting rights and control and accrue dividends at a rate of 8% per annum Stated Value, payable in cash or in kind at the election of the Board of Directors. For the nine months ended September 30, 2017 and for the year ended December 31, 2016, the Company has not declared dividends. (B) Stock Warrants The following tables summarize all warrant grants as of September 30, 2017, and the related changes during these periods are presented below: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in Years) Balance, December 31, 2016 19,970,690 $ 0.01 2.2 Granted — Exercised — Cancelled/Forfeited (750,000 ) Balance, September 30, 2017 19,220,690 $ 0.01 1.5 A summary of all outstanding and exercisable warrants as of September 30, 2017 is as follows: Weighted Average Aggregate Intrinsic Exercise Warrants Warrants Remaining Value Price Outstanding Exercisable Contractual Life $ 0.01 2,000,000 2,000,000 1.41 $ — $ 0.005 1,000,000 1,000,000 1.65 $ — $ 0.0029 8,620,690 8,620,690 1.49 $ — $ 0.006 5,600,000 5,600,000 1.64 $ 0.12 2,000,000 2,000,000 1.01 $ — 19,220,690 19,220,690 1.5 $ — A summary of all outstanding and exercisable warrants as of December 31, 2016 is as follows: Weighted Average Aggregate Intrinsic Exercise Warrants Warrants Remaining Value Price Outstanding Exercisable Contractual Life $ 0.01 2,000,000 2,000,000 1.41 $ — $ 0.005 1,000,000 1,000,000 1.65 $ — $ 0.0029 8,620,690 8,620,690 1.49 $ — $ 0.006 5,600,000 5,600,000 1.64 $ 0.12 2,000,000 2,000,000 1.01 $ — 19,220,690 19,220,690 1.5 $ — (C) Stock Options On July 6, 2017, Company's Chief Financial Officer ("CFO"), the Company issued 95,332,500 options to buy common shares of the Company's stock at $0.00253 per share, good for three years to the CFO. The Company recognized an expense of $191,361 for nine months ended September 30, 2017. The Company recorded the fair value of the options based on the fair value of each option grant estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions: Expected dividends 0% Expected volatility 178.27% Expected term 3 Years Risk free interest rate 0.69% The following tables summarize all option grants as of September 30, 2017, and the related changes during these periods are presented below: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life Outstanding – December 31, 2016 2,866,652 $ 0.13 1.02 Granted 95,332,500 $ 0.0025 2 Exercised — $ — — Forfeited or Canceled (2,866,652 ) $ — — Outstanding – September 30, 2017 95,332,500 $ 0.0025- 2- Exercisable – September 30, 2017 95,332,500 |
Commitments
Commitments | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS | NOTE 7 COMMITMENTS (A) Employment Agreement On January 31, 2016 Mr. Lloyd Trammell (“Trammell”) submitted a notice of resignation ending employment on March 1, 2016. In connection with Trammell’s resignation a dispute arose between the Company and Trammell concerning Trammell’s desiring to sell 13 million shares of the Company’s stock. The Company filed an action in the Superior court of the State of California, County of San Diego (assigned Case No. 37-2016-00033037-CU-MU-NC) seeking to enjoin or restrict the sale of the Company shares. The lawsuit was settled July 26, 2017 amicably and the Company has agreed to buy back the referenced shares for $15,000. Further, in the event closing of the buyback is delayed by any availability of funds, the Company agrees to pay an additional amount to Trammel equal to $150 per day for each day beyond August 1 st On January 8, 2016, the Company extended the employment agreement with its CEO, John Blaisure for an additional five years. The Company issued 12,000,000 shares of Company’s common stock as part of the compensation with a fair value of $105,600 ($0.0088) based on the stock trading price. (B) Consulting Agreement On April 14, 2016, the Company entered into an agreement, for consulting services, for which the Company issued 1,000,000 warrants at a strike price of ($0.005/share) per share. On March 6, 2016, the Company entered into a revised engagement with its corporate counsel, McMenamin Law Group, for corporate legal services to be provided by legal counsel beginning July 28, 2015 through December 31, 2016, pursuant to which the Company has agreed to issue a five (5) year warrant at an exercise price totaling $25,000 at a strike price of ($0.0029/share) per share of common stock of the Company, which share price was the closing price of the Company’s stock on March 3, 2016. In addition the Company has agreed to pay McMenamin Law Group cash consideration totaling $15,000 on or before March 31, 2016, or a funding of the Company, whichever occurs first. As of December 31, 2016, the payment was not made. This new engagement shall replace and supersede any previous engagements or other agreements between the Company and McMenamin Law Group. On October 14, 2016 the Company entered into a new engagement with its corporate counsel McMenamin Law Group, for corporate legal services to be provided from January 1, 2017 through December 31, 2017. Specifically the Company agreed to pay a flat fee totaling $32,500 in the following installment, (i) $10,000 on October 17, 2016, (ii) $7,500 on January 3, 2017, (iii) $7,500 on June 30, 2017, and (iv) $7,500 on June 30, 2017. (C) Other Agreements On February 21, 2017 the Company entered into an Agreement with architect Eli Attia. This Agreement terminated and replaced the previous Representation Agreement and allows the Company to continue to pursue litigations against Google and Flux. |
Litigation
Litigation | 9 Months Ended |
Sep. 30, 2017 | |
Loss Contingency [Abstract] | |
LITIGATION | NOTE 8 LITIGATION From time to time, the Company has become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm its business. On January 21, 2015, the Company filed a patent infringement action against Netflix Inc., Netflix Luxembourg S.a.r.l. and Netflix International B.V. with the District Court of Mannheim, Germany. The asserted patent is the same patent as in the German proceedingsagainst Google Inc. and its subsidiaries. The Complaint alleges that Netflix Inc. and its subsidiaries are offering and transmitting video streams to German customers as part of their video-on-demand business model; the videos being encoded and transmitted in a manner claimed and protected by the patent. The Company primarily seeks a permanent injunction against the Defendants, plus damages and information regarding past infringements. The Company, on or about December 2015 upon advice of counsel, decided withdraw the litigation prior to oral argument, which withdrawal is without prejudice to re-file the lawsuit in the future. The Company intends to vigorously prosecute these various patent infringement litigations. The Company believes it has a good likelihood of success associated with these patent infringement lawsuits. However, no assurance can be given by the Company as to the ultimate outcome of these actions or its effect on the Company. The law firm is prosecuting this action on a contingency fee basis. On January 26, 2015, the Company was named as a defendant in an action filed in the Superior Court for the State of California and the County of Los Angeles captioned Bibicoff Family Trust v. Max Sound Corporation (Case No. SC123679). The parties participated in mediation and arrived successfully at a settlement and resolution of the matter. In March 2017 the Company successfully completed paying the agreed upon settlement amount. On August 11, 2014, the Company and VSL simultaneously filed trade secret and patent infringement actions against Google, Inc., and its subsidiaries YouTube, LLC, and On2 Technologies, Inc., relating to proprietary and patented technology owned by Vedanti Systems Limited (“Vedanti”), a subsidiary of VSL. The patent infringement complaint was originally filed in the U.S. District Court for the District of Delaware; the trade secret suit was filed in Superior Court of California, County of Santa Clara. On September 30, 2014, the Company filed notices of voluntary dismissal without prejudice as to both lawsuits. On October 1, 2014, the Company amended the patent complaint and filed it in the U.S. District Court for the Northern District of California. In this patent lawsuit, the Company contends that, in 2010, while Google was in discussions with Vedanti about the possibility of acquiring Vedanti's patented digital video streaming techniques and other proprietary methods, Google gained access to and received technical guidance regarding Vedanti’s proprietary codec, a computer program capable of encoding and decoding a digital data stream or signal. The lawsuit further alleges that soon after Google and Vedanti initiated negotiations, Google willfully infringed Vedanti's patent by incorporating Vedanti's patented technology into Google's own VP8, VP9, WebM, YouTube, Google Adsense, Google Play, Google TV, Chromebook, Google Drive, Google Chromecast, Google Play-per-view, Google Glasses, Google+, Google’s Simplify, Google Maps, and Google Earth, without compensating Vedanti for such use. On May 13, 2015 Google's “motion to dismiss” was denied by the Northern District of California court in a seven page order, stating that Max Sound had sufficiently alleged the existence and validity of the '339 Patent. However, on November 24, 2015, the court granted a second motion to dismiss for lack of subject matter jurisdiction based on the defendants’ argument that the agreements between the Company and VSL/Vedanti did not clearly give the Company standing to enforce the patent rights. The Company appealed that decision on February 22, 2016. One January 18, 2017 the Company received a notice from the Federal Circuit Court of Appeals that affirmed the order of the District Court dismissing MAXD's patent infringement lawsuit against Google for lack of standing. The Court did not issue a written decision explaining its reasoning or that the Company's arguments were not correct; however, The Company believes that their decision was predicated on the fact that as now co-owners of the patents with Vedanti, the Company can simply re-file together against Google. The Court also issued an order denying Google's motion arguing that the Company's appeal should be dismissed as moot. On September 25, 2017, the Court issued an order that the Company should reimburse defendants for its attorneys’ fees in the amount of $820,321.41. The Company believes that the Order for fees is without merit and has appealed. In connection with the dismissal of the aforementioned litigation, the Company initiated an arbitration against VSL Communications, Ltd., Vedanti Systems, Ltd., Constance Nash, Robert Newell and eTech Investments as respondents before the American Arbitration Association for breach of contract, fraud, and other causes of action. Subsequently, the Company is pursuing in arbitration claims against VSL to enforce the agreement and to compel VSL to comply with the agreement’s terms and conditions that inter alia VSL must fully cooperate with the Company to cure any issues the Court raised with standing to pursue the claims. On January 17, 2017 the AAA notified the Company’s counsel that the respondent’s counterclaim was withdrawn this arbitration claim was formally concluded. On December 5, 2014, the Company, along with renowned architect Eli Attia, filed a lawsuit in the Superior Court of California, County of Santa Clara, against Google, its co-founders Sergey Brin and Larry Page, Google’s spinoff company Flux Factory, and senior executives of Flux. Plaintiffs’ allege misappropriation of trade secrets, breach of contract and other contract-related claims, breach of confidence, slander of title, violation of California’s Unfair Competition Law (California Business and Professionals Code §§ 17200 et seq.), and fraud, and also a claim for declaratory relief. The lawsuit contends that Google and the other Defendants stole Mr. Attia’s trade secrets, proprietary information, and know-how regarding a revolutionary architecture design and building process that he alone had invented, known as Engineered Architecture. Defendants are alleged to have engaged Mr. Attia in 2010 and 2011 to translate his architectural technology into software for a proof of concept, with the goal of determining at that point whether to continue with full-scale development with Mr. Attia. Instead, the lawsuit claims that once Mr. Attia had disclosed the trade secrets and proprietary information Defendants needed to bring the technology to market, they severed ties with Mr. Attia, and continued to use his technology without a license and without compensation, in order to bring the technology to market themselves. Plaintiffs seek a permanent injunction against Google, damages (including punitive damages), and restitution. As exclusive agent to Eli Attia to enforce all rights with respect to the subject technology, the Company has retained Buether Joe & Carpenter LLC to represent the Company in the suit, on a contingency fee basis. The case will be vigorously prosecuted, and the Company believes it has a good likelihood of success. Defendants have filed multiple demurrers to the complaint, and the Court has issued orders allowing the case to proceed. Defendants filed another demurrer on March 17, 2016, which was denied by the Court on August 12, 2016. On October 4, 2017, the Court granted Mr. Attia leave to amend the complaint to add causes of action against defendants for civil violations of the federal Rackateer Influenced and Corrupt Organizations Act (commonly known as RICO). Subsequently, on October 23, 2017, the defendants removed the lawsuit from California state court to the federal district court in the Northern District of California, San Jose Division. The parties continue to file motions and are expected to begin the discovery phase of the litigation. On June 1, 2016, the Company was named as a defendant in an action filed in the Superior Court of the State of California, County of Los Angeles – Central District, captioned Adli Law Group, PC v. Max Sound Corporation (Case No. BC621886). Plaintiff alleges two causes of action for Breach of Contract and a cause of action for Common Counts, all arising out of the Company’s alleged failure to pay for Plaintiff’s legal services. Despite the fact that the Company was never served with the Complaint, default was entered against the Company. The Default has been set aside and the Company has responded to the Complaint with an Answer and Cross-Complaint for Breach of Contract, Professional Negligence, Breach of Fiduciary Duty, Conversion, and Fraud, due to the fact, that among other things, Adli Law reassigned the Company's primary patent to itself. The parties have begun the discovery phase of the litigation and the Judge has set a status hearing for January 19, 2018. On September 22, 2016, the Company filed an action in the Superior Court of the State of California, County of San Diego – North County Regional Center, captioned Max Sound Corporation v. Globex Transfer, LLC (Case No. 37-2016-0003037-CU-MC-NC). The Company requests injunctive relief and declaratory relief regarding the release of 13 million restricted shares of Company stock. On September 26, 2016, the Court granted the Company a preliminary injunction, enjoining Defendant from releasing any restriction of the subject shares without first obtaining the Company’s consent, pending the outcome of the litigation.” In November 2016, the Company entered into an agreement with Vedanti Licensing Limited ("VLL") and Vedanti Systems Limited ("Vedanti") under (the "VLL/Max Sound Agreement") granting the Company co-ownership of U.S. Patent No. 7,974,339 (the "`339 Patent") along with the other patents owned by Vedanti Systems Limited. Thus, the Company is now a co-owner with VLL of the `339 Patent and ODT Patent portfolio, pursuant to the VLL/Max Sound Agreement, the Company and VLL intend to file new lawsuit against Google and others for infringement as co-owners. On December 20, 2016 Companies House, the United Kingdom's registrar of companies, notified the Company that VSL Communications Limited was dissolved, thereafter voiding any remaining agreement with VSL Communications or its previous Officers, Directors or Management. No assurance can be given as to the ultimate outcome of these actions or their effect on the Company. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 9 SUBSEQUENT EVENTS On October 2, 2017, the Company entered into a two year line of credit agreement with the principal stockholder in the amount of $200,000. The line of credit carries an interest rate of 4%. Subsequent to September 30, 2017, the principal shareholder advanced $26,070 to the Company under the terms of the line of credit agreement Dated July 6, 2017 (See Note 3 (D)). On October 2, 2017, the Company, in exchange for Greg Halpern's consideration issuing the Company a line of credit of $100,000 on July 6, 2017 and another line of credit of $200,000 October Mr. $960,000 Mr. October 4, 2017, the Company’s Board approved the adoption of the Certificate of Amendment to the Amended and Restated Certificate of Incorporation, which authorizes an increase in the number of authorized shares of Common Stock from 3,250,000,000 shares of Common Stock to 4,250,000,000 shares of common stock. On October 10, 2017 the Company converted a total of $43,803.73 in convertible debt comprised of principal and interest into 74,878,171 common shares. On October 12, 2017 the Company entered into a new engagement with its corporate counsel McMenamin Law Group, for corporate legal services to be provided from January 1, 2018 through December 31, 2018. Specifically the Company agreed to pay a flat fee totaling $32,500 in the following installment, (i) $10,000 on January 2, 2018, (ii) $7,500 on March 31, 2018, (iii) $7,500 on June 30, 2018, and (iv) $7,500 on October 31, 2018. On October 20, 2017, the Company entered into an agreement with Power Up Lending Group, LTD to issue up to $78,000 in a convertible note. The note matures on July 30, 2018 and bears an interest charge of 12%. The conversion price equals the “Variable Conversion Price”, which is 61% of the “Market Price”, which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period prior to the conversion. The holder of the note has a right to convert all or any part of the outstanding unpaid principal amount into shares of common stock after nine months. The Company received $75,000 proceeds on October 25, 2017. On October 31, 2017 the Company converted a total of $38,359 in convertible debt comprised of principal and interest into 84,306,000 common shares. On November 8, 2017, the Company, at Greg , On November 8, 2017, the principal shareholder advanced $9,000 additional capital to the Company under the terms of the line of credit agreement Dated July 6, 2017. |
Summary of Significant Accoun15
Summary of Significant Accounting Policies and Organization (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
Organization and Basis of Presentation | (A) Organization and Basis of Presentation Max Sound Corporation (the "Company") was incorporated in Delaware on December 9, 2005, under the name 43010, Inc. The Company business operations are focused primarily on developing and launching audio technology software. Effective March 1, 2011, the Company filed with the State of Delaware a Certificate of Amendment of Certificate of Incorporation changing our name from So Act Network, Inc. to Max Sound Corporation. On August 9, 2016 the Company has moved a level down from OTCQB to OTC Pink Current Information where it is within the continued standards and pricing requirements as found in Section 2 of the OTCQB Eligibility Standards . It is management's opinion, however, that all material adjustments (consisting of normal and recurring adjustments) have been made which are necessary for a fair financial statements presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year. These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC on March 31, 2017. |
Use of Estimates | (B) Use of Estimates In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates. |
Cash and Cash Equivalents | (C) Cash and Cash Equivalents For purposes of the cash flow statements, the Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. As of September 30, 2017 and December 31, 2016, the Company had no cash equivalents. |
Property and Equipment | (D) Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is provided using the straight-line method over the estimated useful life of three to five years. |
Research and Development | (E) Research and Development The Company has adopted the provisions of FASB Accounting Standards Codification No. 350, Intangibles - Goodwill & Other . |
Concentration of Credit Risk | (F) Concentration of Credit Risk The Company at times has cash in banks in excess of FDIC insurance limits. The Company had $0 in excess of FDIC insurance limits as of September 30, 2017 and December 31, 2016. |
Revenue Recognition | (G) Revenue Recognition The Company recognized revenue on arrangements in accordance with FASB Codification Topic 605, “Revenue Recognition” (“ASC Topic 605”). Under ASC Topic 605, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured. The Company has not yet commenced revenue generating activities. |
Impairment of Long-Lived Assets | (H) Impairment of Long-Lived Assets and Intangible Assets with Definite Life The Company accounts for its long-lived assets in accordance with ASC Topic 360-10-05, “Accounting for the Impairment or Disposal of Long-Lived Assets.” ASC Topic 360-10-05 requires that long-lived assets, such as technology rights, be reviewed for impairment annually, or whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposable value. The Company recorded $1,008,035 and $15,703,617 in impairment of the intangible asset for the year ended December 31, 2016 and the year ended December 31, 2015, respectively. As of December 31, 2016 the intangible assets were fully impaired. |
Loss Per Share | (I) Loss Per Share In accordance with accounting guidance now codified as FASB ASC Topic 260, “Earnings per Share,” The computation of basic and diluted loss per share for the nine months ended September 30, 2017 and 2016 excludes the common stock equivalents of the following potentially dilutive securities because their inclusion would be anti-dilutive: September 30, 2017 September 30, 2016 Stock Warrants (Exercise price - $0.25 - $.52/share) 19,220,690 18,270,690 Stock Options (Exercise price - $0.00250/share) 95,332,500 2,866,652 Convertible Debt (Exercise price - $0.0004 - $.0007/share) 12,625,229,167 2,791,745,292 Series A Convertible Preferred Shares ($0.0/share) 125,000,000 125,000,000 Total 12,864,782,357 2,937,882,634 The Company’s obligations to issue shares upon conversion of its outstanding convertible notes, the exercise of stock options and warrants and conversion of its preferred stock (the “Convertible Instruments”) at current market prices for its common stock exceeds by the 10,477,741,559 authorized but unissued shares of Common Stock as of the date of this report (the “Potentially Issuable Shares”). While it is uncertain whether the Company would receive requests to issue all of the Potentially Issuable Shares and the number of such shares fluctuates based on the market price of the Company’s common stock, the Company may increase the number of its authorized shares of common stock or effectuate a recapitalization, or a combination of both, in order to make available additional shares of its Common Stock for the Potentially Issuable Shares. Such action would require shareholder approval. Until such time as the Company has a sufficient number of shares of its Common Stock for issuance to cover the Potentially Issuable Shares, the Company could be subject to penalties and damages to the holders of the Convertible Instruments in the event it does not deliver the Potentially Issuable Shares upon request by a holder of the Convertible Instruments. Furthermore, the lack of available shares of common stock may be deemed a default under one or more of the Convertible Instruments. |
Income Taxes | (J) Income Taxes The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”) Income Taxes. Under ASC 740-10-25, 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. 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 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company's federal income tax returns are no longer subject to examination by the IRS for the years prior to 2012, and the related state income tax returns are no longer subject to examination by state authorities for the years prior to 2011. |
Business Segments | (K) Business Segments The Company operates in one segment and therefore segment information is not presented. |
Recent Accounting Pronouncements | (L) Recent Accounting Pronouncements In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (ASU 2017-01), which revises the definition of a business and provides new guidance in evaluating when a set of transferred assets and activities is a business. This guidance will be effective for us in the first quarter of 2018 on a prospective basis, and early adoption is permitted. The Company has not yet determined the potential effects of the adoption of ASU 2016-15 on its Financial Statements. In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04), which eliminates step two from the goodwill impairment test. Under ASU 2017-04, an entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value up to the amount of goodwill allocated to that reporting unit. This guidance will be effective for us in the first quarter of 2020 on a prospective basis, and early adoption is permitted. The Company has not yet determined the potential effects of the adoption of ASU 2016-15 on its Financial Statements. In January 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) 2016-01, which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Changes to the current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Company is currently evaluating the impact of adopting this guidance. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Topic 842 affects any entity that enters into a lease, with some specified scope exemptions. The guidance in this Update supersedes Topic 840, Leases. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For public companies, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating the impact of adopting ASU No. 2016-02 on our financial statements. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) that clarifies how to apply revenue recognition guidance related to whether an entity is a principal or an agent. ASU 2016-08 clarifies that the analysis must focus on whether the entity has control of the goods or services before they are transferred to the customer and provides additional guidance about how to apply the control principle when services are provided and when goods or services are combined with other goods or services. The effective date for ASU 2016-08 is the same as the effective date of ASU 2014-09 as amended by ASU 2015-14, for annual reporting periods beginning after December 15, 2017, including interim periods within those years. The Company has not yet determined the impact of ASU 2016-08 on its financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation, or ASU No. 2016-09. The areas for simplification in this Update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public entities, the amendments in this Update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted in any interim or annual period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements, forfeitures, and intrinsic value should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively. Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term should be applied prospectively. An entity may elect to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using either a prospective transition method or a retrospective transition method. We are currently evaluating the impact of adopting ASU No. 2016-09 on our financial statements. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which provides further guidance on identifying performance obligations and improves the operability and understandability of licensing implementation guidance. The effective date for ASU 2016-10 is the same as the effective date of ASU 2014-09 as amended by ASU 2015-14, for annual reporting periods beginning after December 15, 2017, including interim periods within those years. In May 2016, the FASB issued ASU 2016-12 “Revenue from Contracts with Customers (Topic 606) - Narrow-Scope Improvements and Practical Expedients,” which amends the guidance on transition, collectability, non-cash consideration, and the presentation of sales and other similar taxes. ASU 2016-12 clarifies that, for a contract to be considered completed at transition, all (or substantially all) of the revenue must have been recognized under legacy GAAP. In addition, ASU 2016-12 clarifies how an entity should evaluate the collectability threshold and when an entity can recognize nonrefundable consideration received as revenue if an arrangement does not meet the standard’s contract criteria. The standard allows for both retrospective and modified retrospective methods of adoption. The Company has not yet determined the impact of ASU 2016-10 on its financial statements. In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Statements," which requires companies to measure credit losses utilizing a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2019 (fiscal year 2021 for the Company). The Company has not yet determined the potential effects of the adoption of ASU 2016-13 on its Financial Statements. In August 2016, the FASB issued ASU 2016-15, "Classification of Certain Cash Receipts and Cash Payments," which aims to eliminate diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows, and other Topics. ASU 2016-15 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2017 (fiscal year 2019 for the Company). The Company has not yet determined the potential effects of the adoption of ASU 2016-15 on its Financial Statements. In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, Interest–Imputation of Interest (Subtopic 835-30) (“ASU 2015-03”), which changes the presentation of debt issuance costs in financial statements. ASU 2015-03 requires an entity to present such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs will continue to be reported as interest expense. It is effective for annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The new guidance will be applied retrospectively to each prior period presented. The Company is currently in the process of evaluating the impact of adoption of ASU 2015-03 on its balance sheets. All other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable. |
Fair Value of Financial Instruments | (M) Fair Value of Financial Instruments The carrying amounts on the Company’s financial instruments including accounts payable, derivative liability, convertible note payable, and note payable, approximate fair value due to the relatively short period to maturity for these instruments. We adopted accounting guidance for financial and non-financial assets and liabilities (ASC 820). The adoption did not have a material impact on our results of operations, financial position or liquidity. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use. The following are the major categories of liabilities measured at fair value on a recurring basis: as of September 30, 2017 and December 31, 2016, using quoted prices in active markets for identical liabilities (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3): September 30, 2017 December 31, 2016 Fair Value Measurement Using Fair Value Measurement Using Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Derivative Liabilities — 4,956,605 — 4,956,605 — 5,906,940 — 5,906,940 |
Stock-Based Compensation | (N) Stock-Based Compensation In December 2004, the FASB issued FASB Accounting Standards Codification No. 718, Compensation - Stock Compensation. Under FASB Accounting Standards Codification No. 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant. The Company applies this statement prospectively. Equity instruments (“instruments”) issued to other than employees are recorded on the basis of the fair value of the instruments, as required by FASB Accounting Standards Codification No. 718. FASB Accounting Standards Codification No. 505, Equity Based Payments to Non-Employees defines the measurement date and recognition period for such instruments. In general, the measurement date is when either a (a) performance commitment, as defined, is reached or (b) the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in the FASB Accounting Standards Codification. |
Reclassification | (O) Reclassification Certain amounts from prior periods have been reclassified to conform to the current period presentation. These reclassifications had no impact on the Company's net loss or cash flows. |
Derivative Financial Instruments | (P) Derivative Financial Instruments Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option-pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments. Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives. In addition, the fair value of freestanding derivative instruments such as warrants, are also valued using the Black-Scholes option-pricing model. |
Original Issue Discount | (Q) Original Issue Discount For certain convertible debt issued, the Company provides the debt holder with an original issue discount. The original issue discount is recorded to debt discount, reducing the face amount of the note and is amortized to interest expense over the life of the debt. |
Debt Issue Costs and Debt Discount | (R) Debt Issue Costs and Debt Discount The Company may pay debt issue costs, and record debt discounts in connection with raising funds through the issuance of convertible debt. These costs are amortized to interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. |
Licensing and Distribution | (S) Licensing & Distribution On June 20, 2015, the Company entered into a license agreement with Santok LTD of United Kingdom (“Santok). The term of the agreement is three years. Santok will pay the Company a royalty fee of $1.50 for each licensed product. Santok guarantees to the Company a minimum total of 150,000 cumulative licensed product installation with a minimum total guaranteed value of $225,000 over the three years of the agreement. If the total royalty paid is less than the guaranteed value, Santok will pay the difference. On July 13, 2015, the Company entered into a license agreement with Luna Mobile, Inc. of United States (“Luna). The term of the agreement is three years. Luna will pay the Company a royalty fee of $1.50 for each licensed product manufactured and sold. As of September 30, 2017 Luna Mobile continues to seek to distribute its products. |
Summary of Significant Accoun16
Summary of Significant Accounting Policies and Organization (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of potentially dilutive securities | September 30, 2017 September 30, 2016 Stock Warrants (Exercise price - $0.25 - $.52/share) 19,220,690 18,270,690 Stock Options (Exercise price - $0.00250/share) 95,332,500 2,866,652 Convertible Debt (Exercise price - $0.0004 - $.0007/share) 12,625,229,167 2,791,745,292 Series A Convertible Preferred Shares ($0.0/share) 125,000,000 125,000,000 Total 12,864,782,357 2,937,882,634 |
Fair Value of Financial Instruments | September 30, 2017 December 31, 2016 Fair Value Measurement Using Fair Value Measurement Using Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Derivative Liabilities — 4,956,605 — 4,956,605 — 5,906,940 — 5,906,940 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Summary of Convertable Debt | AS of September 30, 2017 As of December 31, 2016 Convertible debt $ 6,020,393 $ 5,597,598 Less: debt discount (832,238 ) (1,227,865 ) Convertible debt - net 5,188,155 4,369,733 Demand note — 20,000 Total current debt 5,188,155 $ 4,389,733 |
Convertible Debt | Nine months ended September 30, 2017 Amount of Principal Raised Year ended December 31, 2016 Amount of Principal Raised Interest Rate 0% - 12% 0% - 10% Default interest rate 14% - 22% 14% - 22% Maturity November 4, 2015 –August 3, 2018 November 4, 2015 –March 10, 2018 Conversion terms 1 65% of the “Market Price”, which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period prior to the conversion. 3,515,900 3,412,400 Conversion terms 2 65% of the “Market Price”, which is the one lowest trading prices for the common stock during the ten (10) trading day period prior to the conversion. 974,3597 624,087 Conversion terms 3 70% of the “Market Price”, which is the average of the lowest three (3) trading prices for the common stock during the fifteen (15) trading day period prior to the conversion. paid on conversion paid on conversion Conversion terms 4 75% of the “Market Price”, which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period prior to the conversion. 765,000 765,000 Conversion terms 5 60% of the “Market Price”, which is the lowest trading prices for the common stock during the fifteen (15) trading day period prior to the conversion. paid on conversion paid on conversion Conversion terms 6 Conversion at $0.10 per share Paid on conversion Paid on conversion Conversion terms 7 60% of the “Market Price”, which is the lowest trading prices for the common stock during the ten (10) trading day period prior to the conversion. paid on conversion 127,000 Conversion terms 8 65% of the “Market Price”, which is the two lowest trading prices for the common stock during the ten (10) trading day period prior to the conversion. 373,555 536,669 Conversion terms 9 65% of the “Market Price”, which is the two lowest trading prices for the common stock during the fifteen (15) trading day period prior to the conversion. paid on conversion 79,810 Conversion terms 10 65% of the “Market Price”, which is the one lowest trading prices for the common stock during the fifteen (15) trading day period prior to the conversion. paid on conversion paid on conversion Conversion terms 11 60% of the “Market Price”, which is the two lowest trading prices for the common stock during the twelve (12) trading day period prior to the conversion. paid on conversion 52,632 Conversion terms 12 61% of the “Market Price”, which is the average of the three lowest trading prices for the common stock during the ten (10) trading day period prior to the conversion. 123,000 — |
Convertable Debt Terms | Convertible Debt Balance as of December 31, 2016 5,597,598 4% - 10% November 4, 2015 - March 10, 2018 Borrowings during the nine months ended September 30, 2017 1,737,855 8 % Non-Cash Reclassification of accrued interest converted 77,650 Repayments (233,743 ) Conversion of debt to into 934,317,088 shares of common stock with a valuation of $1,158,967 ($0.00058 - $0.00731/share) including the accrued interest of $77,650 (1,158,967 ) Convertible Debt Balance as of September 30, 2017 6,020,393 4% - 8% November 4, 2015 –August 31, 2018 |
Debt Issue Costs | Nine months ended September 30, 2017 Year Ended December 31, 2016 Debt issue costs $ 333,898 262,623 Accumulated amortization of debt issue costs (301,867 ) (220,124 ) Debt issue costs - net $ 32,031 42,499 |
Debt Discount | Nine months ended September 30, 2017 Year Ended December 31, 2016 Debt discount $ 12,161,572 10,356,394 Accumulated amortization of debt discount (11,329,334 ) (9,128,529 ) Debt discount - Net $ 832,238 1,227,865 |
Convertible Debt - Derivative18
Convertible Debt - Derivative Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
Fair Value of the Conversion Feature | Derivative Liability -December 31, 2016 $ 5,906,940 Fair value at the commitment date for convertible instruments 2,290,760 Change in fair value of embedded derivative liability for warrants issued (212,753 ) Change in fair value of embedded derivative liability for convertible instruments (1,471,074 ) Reclassification to additional paid in capital for financial instruments that ceased to be a derivative liability (1,170,774 ) Change from repayments (386,494 ) Derivative Liability –September 30, 2017 $ 4,956,605 |
Management Assumptions | Commitment Date Re-measurement Date Expected dividends: — — Expected volatility: 133% - 262% 151%-341.13 Expected term: 0.08 - 3 Years 0.01–1.65 Years Risk free interest rate: 0.06% - 1.60% 0.01% - 1.01% |
Management Assumptions | Commitment Date Re-measurement Date Expected dividends: — — Expected volatility: 133% - 262% 157% -216% Expected term: 0.08 - 3 Years 0.01–2.40 Years Risk free interest rate: 0.06% - 1.60% 0.12% - .1.47% |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
Summary of property and equipment | September 30, 2017 December 31, 2016 Website Development $ 294,795 $ 294,795 Furniture and Equipment 143,071 117,971 Leasehold Improvements 6,708 6,708 Software 54,598 54,598 Music Equipment 2,578 2,578 Office Equipment 80,710 80,710 Domain Name 1,500 1,500 Sign 628 628 Total 584,588 559,488 Less: accumulated depreciation and amortization (533,933 ) (498,065 ) Property and Equipment, Net $ 50,655 $ 61,423 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Summary of Common Stock | Transaction Type Quantity Valuation Range of Value per share Conversion of convertible debt and accrued interest 934,317,088 $ 1,158,967 $0.00058 to- $0.00731 Services - rendered 6,000,000 54,600 $0.0011 - $0.0107 Shares repurchased (13,000,000 ) (15,000 ) $ .0014 Total shares issued 927,317,088 $ 1,198,567 |
Summary of warrants activity | Weighted Average Aggregate Intrinsic Exercise Warrants Warrants Remaining Value Price Outstanding Exercisable Contractual Life $ 0.01 2,000,000 2,000,000 1.41 $ — $ 0.005 1,000,000 1,000,000 1.65 $ — $ 0.0029 8,620,690 8,620,690 1.49 $ — $ 0.006 5,600,000 5,600,000 1.64 $ 0.12 2,000,000 2,000,000 1.01 $ — 19,220,690 19,220,690 1.5 $ — |
Summary of all outstanding and exercisable warrants | Weighted Average Aggregate Intrinsic Exercise Warrants Warrants Remaining Value Price Outstanding Exercisable Contractual Life $ 0.01 2,000,000 2,000,000 1.41 $ — $ 0.005 1,000,000 1,000,000 1.65 $ — $ 0.0029 8,620,690 8,620,690 1.49 $ — $ 0.006 5,600,000 5,600,000 1.64 $ 0.12 2,000,000 2,000,000 1.01 $ — 19,220,690 19,220,690 1.5 $ — |
Summary of Stock Options | Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life Outstanding – December 31, 2016 2,866,652 $ 0.13 1.02 Granted 95,332,500 $ 0.0025 2 Exercised — $ — — Forfeited or Canceled (2,866,652 ) $ — — Outstanding – September 30, 2017 95,332,500 $ 0.0025- 2- Exercisable – September 30, 2017 95,332,500 |
Summary of Significant Accoun21
Summary of Significant Accounting Policies and Organization (Details) - shares | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Preferred Stock | ||
Summary of potentially dilutive securities | ||
Potentially dilutive securities | 125,000,000 | 125,000,000 |
Convertible Debt Securities [Member] | ||
Summary of potentially dilutive securities | ||
Potentially dilutive securities | 12,625,229,167 | 2,791,745,292 |
Equity Option [Member] | ||
Summary of potentially dilutive securities | ||
Potentially dilutive securities | 95,332,500 | 2,866,652 |
Warrant [Member] | ||
Summary of potentially dilutive securities | ||
Potentially dilutive securities | 19,220,690 | 18,270,690 |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Notes to Financial Statements | ||||
Net Loss (Income) | $ 69,459 | $ (2,113,821) | $ (4,091,433) | $ (9,441,874) |
Working Capital Deficit | (77,753,392) | |||
Cash Flow from Operations | $ (1,466,552) | $ (1,488,470) |
Debt - Summary of Convertable D
Debt - Summary of Convertable Debt (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
Convertible debt | $ 6,020,393 | $ 5,597,598 |
Less: debt discount | (832,238) | (1,227,865) |
Convertible debt - net | 5,188,155 | 4,369,733 |
Demand note | 20,000 | |
Total current debt | $ 5,188,155 | $ 4,389,733 |
Debt - Convertible Debt (Detail
Debt - Convertible Debt (Details) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Debt Disclosure [Abstract] | |
Borrowings during period | $ 1,737,855 |
Repayments | 233,743 |
Conversion of debt to into 934,317,088 shares of common stock with a valuation of $1,158,967 ($0.00058 - $0.00731/share) including the accrued interest of $77,650 | 1,158,967 |
Convertible Debt Ending Balance, Value | $ 6,020,393 |
Debt - Debt Issue Costs (Detail
Debt - Debt Issue Costs (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Debt Disclosure [Abstract] | ||
Debt issue costs | $ 333,898 | $ 262,623 |
Accumulated amortization of debt issue costs | (301,867) | (220,124) |
Debt issue costs - net | $ 32,031 | $ 42,499 |
Debt - Debt Discount (Details)
Debt - Debt Discount (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Debt Disclosure [Abstract] | ||
Debt discount | $ 12,161,572 | $ 10,356,394 |
Accumulated amortization of debt discount | (11,329,334) | (9,128,529) |
Debt discount - Net | $ 832,238 | $ 1,227,865 |
Debt - Schedule Of Debt Instrum
Debt - Schedule Of Debt Instruments (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Conversion Terms 1 | ||
Conversion Terms | 65% of the Market Price, which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period prior to the conversion. | 65% of the Market Price, which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period prior to the conversion. |
Amount of Principle Raised | $ 3,515,900 | $ 3,412,400 |
Conversion Terms 2 | ||
Conversion Terms | 65% of the Market Price, which is the lowest trading prices for the common stock during the ten (10) trading day period prior to the conversion. | 65% of the Market Price, which is the lowest trading prices for the common stock during the ten (10) trading day period prior to the conversion. |
Amount of Principle Raised | $ 974,359 | $ 624,087 |
Conversion Terms 3 | ||
Conversion Terms | 70% of the Market Price, which is the average of the lowest three (3) trading prices for the common stock during the fifteen (15) trading day period prior to the conversion. | 70% of the Market Price, which is the average of the lowest three (3) trading prices for the common stock during the fifteen (15) trading day period prior to the conversion. |
Amount of Principle Raised | ||
Conversion Terms 4 | ||
Conversion Terms | 75% of the Market Price, which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period prior to the conversion. | 75% of the Market Price, which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period prior to the conversion. |
Amount of Principle Raised | $ 765,000 | $ 765,000 |
Conversion Terms 5 | ||
Conversion Terms | 60% of the Market Price, which is the lowest trading prices for the common stock during the fifteen (15) trading day period prior to the conversion. | 60% of the Market Price, which is the lowest trading prices for the common stock during the fifteen (15) trading day period prior to the conversion. |
Amount of Principle Raised | ||
Conversion Terms 6 | ||
Conversion Terms | Conversion at $0.10 per share | Conversion at $0.10 per share |
Amount of Principle Raised | ||
Conversion Terms 7 | ||
Conversion Terms | 60% of the Market Price, which is the lowest trading prices for the common stock during the ten (10) trading day period prior to the conversion. | 60% of the Market Price, which is the lowest trading prices for the common stock during the ten (10) trading day period prior to the conversion. |
Amount of Principle Raised | $ 127,000 | |
Conversion Terms 8 | ||
Conversion Terms | 65% of the Market Price, which is the two lowest trading prices for the common stock during the ten (10) trading day period prior to the conversion. | 65% of the Market Price, which is the two lowest trading prices for the common stock during the ten (10) trading day period prior to the conversion. |
Amount of Principle Raised | $ 373,555 | $ 536,669 |
Conversion Terms 9 | ||
Conversion Terms | 65% of the Market Price, which is the two lowest trading prices for the common stock during the fifteen (15) trading day period prior to the conversion. | 65% of the Market Price, which is the two lowest trading prices for the common stock during the fifteen (15) trading day period prior to the conversion. |
Amount of Principle Raised | $ 79,810 | |
Conversion Terms 10 | ||
Conversion Terms | 60% of the Market Price, which is the lowest trading prices for the common stock during the fifteen (15) trading day period prior to the conversion. | 60% of the Market Price, which is the lowest trading prices for the common stock during the fifteen (15) trading day period prior to the conversion. |
Amount of Principle Raised | $ 52,632 | |
Debt Instruments | ||
Convertible Debt | 6,020,393 | 5,597,598 |
Less: Debt Discount | (832,238) | (1,227,865) |
Convertible Debt - net | $ 5,188,155 | $ 4,369,733 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 |
Summary of property and equipment | |||
Total | $ 559,488 | $ 584,588 | |
Less: accumulated depreciation and amortization | (498,065) | (533,933) | |
Property & Equipment, Net | $ 50,655 | 61,423 | $ 50,655 |
Furniture and Equipment [Member] | |||
Summary of property and equipment | |||
Total | 143,071 | 117,971 | |
Internet Domain Names [Member] | |||
Summary of property and equipment | |||
Total | 1,500 | 1,500 | |
Sign [Member] | |||
Summary of property and equipment | |||
Total | 628 | 628 | |
Office Equipment [Member] | |||
Summary of property and equipment | |||
Total | 80,710 | 80,710 | |
Computer Software, Intangible Asset [Member] | |||
Summary of property and equipment | |||
Total | 54,598 | 54,598 | |
Leasehold Improvements [Member] | |||
Summary of property and equipment | |||
Total | 6,708 | 6,708 | |
Music Equipment [Member] | |||
Summary of property and equipment | |||
Total | 2,578 | ||
Website Development [Member] | |||
Summary of property and equipment | |||
Total | $ 294,795 | $ 294,795 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Common Stock (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Conversion of convertible debt and accrued interest, Shares | 934,317,088 | 420,556,227 |
Conversion of convertible debt and accrued interest, Value | $ 1,158,967 | $ 1,189,849 |
Services - rendered, Shares | 6,000,000 | 12,775,195 |
Services - rendered, Value | $ 54,600 | $ 12,775,195 |
Shares issued for Patents, Shares | 0 | 80,000,000 |
Shares issued for Patents, Value | 0 | 1,600,000 |
Shares issued for Patents, Value per share | $ 0 | $ 0 |
Shares Repurchased, Shares | 13,000,000 | 0 |
Shares Repurchased, Value | $ 15,000 | $ 0 |
Total shares issued, Shares | 927,317,088 | 513,331,422 |
Total shares issued, Value | 1,198,567 | 2,905,449 |
Maximum | ||
Conversion of convertible debt and accrued interest, Value per share | $ 0.00731 | |
Shares Repurchased, Value per share | .0014 | |
Minimum | ||
Conversion of convertible debt and accrued interest, Value per share | 0.00058 | |
Shares Repurchased, Value per share | $ .0014 |
Stockholders' Equity - Summar30
Stockholders' Equity - Summary of warrants activity (Details) | Sep. 30, 2017$ / sharesshares |
Equity [Abstract] | |
Number of Warrants, Balance | 19,970,690 |
Number of Warrants, Granted | |
Number of Warrants, Cancelled / Forfeited | (750,000) |
Weighted Average Exercise Price, Balance | $ / shares | $ .01 |
Stockholders' Equity - Summar31
Stockholders' Equity - Summary of all outstanding and exercisable warrants (Details) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Warrants Outstanding | 19,220,690 | 19,220,690 |
Warrants Exercisable | 19,220,690 | 19,220,690 |
$ 0.01 | ||
Exercise Price | $ 0.01 | |
Warrants Outstanding | 2,000,000 | |
Warrants Exercisable | 2,000,000 | |
$ 0.005 | ||
Exercise Price | $ 0.005 | |
Warrants Outstanding | 1,000,000 | |
Warrants Exercisable | 1,000,000 | |
$ 0.0029 | ||
Exercise Price | $ 0.0029 | |
Warrants Outstanding | 8,620,690 | |
Warrants Exercisable | 8,620,690 | |
$ 0.006 | ||
Exercise Price | $ 0.006 | |
Warrants Outstanding | 5,600,000 | |
Warrants Exercisable | 5,600,000 | |
$ 0.12 | ||
Exercise Price | $ 0.12 | |
Warrants Outstanding | 2,000,000 | |
Warrants Exercisable | 2,000,000 |
Stockholders' Equity - Summar32
Stockholders' Equity - Summary of option activity (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Equity [Abstract] | ||
Outstanding, Shares at Year End | 2,866,652 | |
Granted | 95,332,500 | |
Exercized | ||
Forfeited or Canceled | (2,866,652) | |
Exercisable, Shares | 95,332,500 | |
Weighted Average Excerise Price | $ .0025 |