Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Mar. 26, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Max Sound Corp | |
Entity Central Index Key | 0001353499 | |
Document Type | 10-K | |
Document Period End Date | Dec. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Is Entity Emerging Growth Company? | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Public Float | $ 1,835,800 | |
Entity Common Stock, Shares Outstanding | 6,577,102,823 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2018 | |
Entity Shell Company | false |
Financial Position
Financial Position - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current Assets | ||
Cash | $ 449 | $ 745 |
Prepaid expenses | 59,730 | |
Total Current Assets | 449 | 60,475 |
Property and equipment, net | 44,063 | |
Total Assets | 449 | 104,538 |
Current Liabilities | ||
Accounts payable | 675,295 | 399,761 |
Accrued expenses | 1,245,600 | 814,930 |
Accrued expenses - related party | 404,429 | 43,000 |
Judgment payable | 819,626 | 819,626 |
Line of credit - related party | 306,575 | 34,156 |
Derivative liability | 13,849,591 | 5,909,121 |
Convertible note payable, net of debt discount of $169,377 and $610,686, and related debt issue costs of $3,525 and $27,436, respectively | 5,987,527 | 5,474,816 |
Total Current Liabilities | 23,288,643 | 13,495,410 |
Stockholders' Deficit | ||
Common stock, $0.00001 par value; 4,250,000,000 shares authorized, 6,573,852,824 and 2,158,961,689 shares issued and outstanding, respectively | 65,867 | 21,718 |
Additional paid-in capital | 70,776,084 | 68,564,307 |
Treasury stock | (534,575) | (534,575) |
Accumulated deficit | (93,595,670) | (81,442,422) |
Total Stockholders' Deficit | (23,288,194) | (13,390,872) |
Total Liabilities and Stockholders' Deficit | 449 | 104,538 |
Preferred Stock | ||
Stockholders' Deficit | ||
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, 10,000,000 and 5,000,000 shares issued and outstanding, respectively | ||
Series A Convertible Preferred Stock | ||
Stockholders' Deficit | ||
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, 10,000,000 and 5,000,000 shares issued and outstanding, respectively | $ 100 | $ 100 |
Financial Position (Parenthetic
Financial Position (Parenthetical) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Debt discount | $ 169,377 | $ 610,686 |
related debt issue costs | $ 3,525 | $ 27,436 |
Preferred stock, par value | $ 0.0001 | |
Preferred stock, shares authorized | 10,000,000 | |
Preferred stock, shares issued | 0 | |
Preferred stock, shares outstanding | 0 | |
Common stock, par value | $ 0.00001 | |
Common stock, shares authorized | 4,250,000,000 | |
Common stock, shares issued | 6,490,519,491 | |
Common stock, shares outstanding | 2,158,961,689 | |
Series A Convertible Preferred Stock | ||
Preferred stock, par value | $ 0.00001 | |
Preferred stock, shares authorized | 10,000,000 | |
Preferred stock, shares issued | 10,000,000 | |
Preferred stock, shares outstanding | 10,000,000 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | ||
Revenue | ||
Operating Expenses | ||
General and administrative | 357,225 | 371,720 |
Consulting | 294,034 | 126,950 |
Professional fees | 221,244 | 551,469 |
Website development | 4,000 | 28,700 |
Compensation | 600,000 | 839,361 |
Judgment payable | 888,821 | |
Total Operating Expenses | 1,476,503 | 2,807,021 |
Loss from Operations | (1,476,503) | (2,807,021) |
Other Income / (Expense) | ||
Other income | 26 | |
Interest expense | (453,469) | (1,399,786) |
Interest expense – related party | (418,510) | |
Derivative Expense | (375,302) | (639,224) |
Amortization of debt offering costs | (44,426) | (96,338) |
Gain/(Loss) on debt settlement | (239,203) | |
Amortization of debt discount | (1,276,576) | (2,647,357) |
Change in fair value of embedded derivative liability | (8,080,251) | 868,761 |
Impairment of fixed assets | (28,211) | |
Total Other Income / (Expense) | (10,676,745) | (4,153,121) |
Provision for Income Taxes | ||
Net Loss | $ (12,153,248) | $ (6,960,142) |
Net Loss Per Share - Basic and Diluted | $ 0 | $ 0 |
Statement of Changes in Stockho
Statement of Changes in Stockholder's Equity - USD ($) | Preferred StockSeries A Convertible | Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Treasury Stock | Total |
Beginning Balance, Shares at Dec. 31, 2016 | 5,000,000 | 935,642,115 | |||||
Beginning Balance, Value at Dec. 31, 2016 | $ 50 | $ 9,355 | $ 64,355,387 | $ (74,482,280) | $ (519,575) | $ (10,637,063) | |
Common stock issued in exchange for warrant forgiveness, Shares | 800,000,000 | ||||||
Common stock issued in exchange for warrant forgiveness, Value | $ 960,000 | ||||||
Common stock issued for services ($0.009/sh), Shares | 6,878,968 | 6,000,000 | |||||
Common stock issued for services ($0.009/sh), Value | $ 69 | 54,531 | $ 54,600 | ||||
Convertible debt, accrued interest and penalty conversion into common stock, Shares | 1,229,440,607 | 1,229,440,607 | |||||
Convertible debt, accrued interest and penalty conversion into common stock, Value | $ 12,294 | 1,296,949 | $ 1,309,243 | ||||
Common stock issued in exchange for accounts payable ($0.01/sh), Shares | |||||||
Common stock issued in exchange for accounts payable ($0.01/sh), Value | |||||||
Common stock issued in exchange accrued interest - related party ($0.0012/sh), Shares | 800,000,000 | ||||||
Common stock issued in exchange accrued interest - related party ($0.0012/sh), Value | $ 8,000 | 952,000 | 960,000 | ||||
Preferred stock issued in exchange for common stock - related party, Shares | 5,000,000 | (800,000,000) | |||||
Preferred stock issued in exchange for common stock - related party, Value | $ 50 | $ (8,000) | 7,950 | 0 | |||
Buyback of common shares, Shares | (13,000,000) | ||||||
Buyback of common shares, Value | (15,000) | (15,000) | |||||
Warrants issued to services to related party, Shares | |||||||
Warrants issued to services to related party, Value | 191,361 | 191,361 | |||||
Reclassification of derivative liability associated with convertible debt, Shares | |||||||
Reclassification of derivative liability associated with convertible debt, Value | 1,706,129 | 1,706,129 | |||||
Net Loss | (6,960,142) | (6,960,142) | |||||
Ending Balance, Shares at Dec. 31, 2017 | 10,000,000 | 6,573,852,824 | |||||
Ending Balance, Value at Dec. 31, 2017 | $ 100 | $ 65,867 | 70,776,084 | (93,595,670) | (534,575) | (13,390,872) | |
Common stock issued in exchange for warrant forgiveness, Shares | 9,200,000 | ||||||
Common stock issued in exchange for warrant forgiveness, Value | $ 92 | 2,668 | $ 2,760 | ||||
Common stock issued for services ($0.009/sh), Shares | 32,678,571 | 32,678,571 | |||||
Common stock issued for services ($0.009/sh), Value | $ 327 | 46,173 | $ 46,200 | ||||
Convertible debt, accrued interest and penalty conversion into common stock, Shares | 4,373,012,563 | 4,289,679,230 | |||||
Convertible debt, accrued interest and penalty conversion into common stock, Value | $ 43,730 | 834,484 | $ 878,214 | ||||
Reclassification of derivative liability associated with convertible debt, Shares | |||||||
Reclassification of derivative liability associated with convertible debt, Value | 1,328,452 | 1,328,452 | |||||
Net Loss | (12,153,248) | (12,153,248) | |||||
Ending Balance, Shares at Dec. 31, 2018 | 10,000,000 | 65,867 | |||||
Ending Balance, Value at Dec. 31, 2018 | $ 100 | $ 6,573,852,824 | $ 70,776,084 | $ (93,595,670) | $ (534,575) | $ (23,288,194) |
Statement of Changes in Stock_2
Statement of Changes in Stockholder's Equity (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Stockholders' Equity [Abstract] | ||
Common Stock Issued for Services, Value Per Share | $ 0.0008 | $ 0.009 |
Common stock issued in exchange for accounts payable, Value Per Share | .01 | 0.01 |
Common stock issued in exchange accrued interest - related party, Value Per Share | $ .0012 | $ .0012 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash Flows From Operating Activities: | ||
Net Loss | $ (12,153,248) | $ (6,960,142) |
Adjustments to reconcile net loss to net cash used in operations | ||
Depreciation/Amortization | 15,852 | 42,459 |
Loss on impairment of fixed assets | 28,211 | |
Stock and stock options issued for services | 46,500 | 54,600 |
Warrant issued to employees – related party | 191,361 | |
Stock issued in exchange of warrant forgiveness | 2,760 | |
Amortization of debt offering costs | 44,426 | 96,338 |
Amortization of debt discount | 1,276,575 | 2,647,357 |
Change in fair value of derivative liability | 8,080,251 | (868,761) |
Derivative Expense | $ 375,302 | $ 639,224 |
Changes in operating assets and liabilities: | ||
Shares issued for interest – related party | 960,000 | |
Cash paid on accrued interest | $ (4,927) | |
Decrease in prepaid expenses | 59,730 | 2,500 |
Increase accounts payable | 276,349 | 161,169 |
Decrease in security deposit | 413 | |
Increase in accrued expenses | 485,642 | 451,925 |
Increase in accrued expenses – related party | 361,429 | 43,306 |
Increase in judgment payable | 819,626 | |
Net Cash Used In Operating Activities | (1,100,221) | (1,723,552) |
Cash Flows From Investing Activities: | ||
Purchase of property equipment | (25,100) | |
Net Cash Used In Investing Activities | (25,100) | |
Cash Flows From Financing Activities: | ||
Proceeds from stockholder loans / lines of credit | 557,679 | 48,500 |
Repayment from stockholder loans / lines of credit | (284,954) | (15,000) |
Repayment of convertible note | (233,743) | |
Proceeds from issuance of convertible note, less offering costs and OID costs paid | 827,200 | 1,799,264 |
Repayment of note payable | (20,000) | |
Cash paid on common stock repurchase | (15,000) | |
Net Cash Provided by Financing Activities | 1,099,925 | 1,564,371 |
Net Decrease in Cash | (296) | (184,281) |
Cash at Beginning of Year | 745 | 185,026 |
Cash at End of Year | 449 | 745 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 4,927 | |
Cash paid for taxes | 8,709 | 2,832 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Shares issued in conversion of convertible debt and accrued interest | 878,214 | 1,309,243 |
Conversion of common to preferred stock | 8,000 | |
Reclassification to additional paid in capital for financial instruments that ceased to be a derivative liability | $ 1,328,452 | $ 1,706,129 |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Organization | 12 Months Ended |
Dec. 31, 2018 | |
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 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. (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 December 31, 2018 and December 31, 2017, 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 December 31, 2018 and December 31, 2017. (G) Revenue Recognition Effective January 1, 2018, the Company recognizes revenue in accordance with Accounting Standards Codification 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific revenue recognition guidance throughout the Industry Topics of the Accounting Standards Codification. The updated guidance states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also provides for additional disclosures with respect to revenues and cash flows arising from contracts with customers. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2017, and the Company adopted the standard using the modified retrospective approach effective January 1, 2018. (H) 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 years ended December 31, 2018 and 2017 excludes the common stock equivalents of the following potentially dilutive securities because their inclusion would be anti-dilutive: December 31, 2018 December 31, 2017 Stock Warrants (Exercise price - $0.25 - $.52/share) 11,620,690 19,220,690 Stock Options (Exercise price - $0.00250/share) 95,332,500 95,332,500 Convertible Debt (Exercise price - $0.0001 - $.000150/share) 85,342,765,754 8,399,417,649 Series A Convertible Preferred Shares ($0.01/share) 250,000,000 250,000,000 Total 85,699,718,944 8,763,970,809 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 82,273,571,767 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. (I) 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. On December 22, 2017, the 2017 Tax Cuts and Jobs Act (the Tax Act) was enacted into law and the new legislation contains several key tax provisions that affected us, including a one-time mandatory transition tax on accumulated foreign earnings and a reduction of the corporate income tax rate to 21% effective January 1, 2018, among others. We are required to recognize the effect of the tax law changes in the period of enactment, such as determining the transition tax, remeasuring our U.S. deferred tax assets and liabilities as well as reassessing the net realizability of our deferred tax assets and liabilities. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), which allows us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. Since the Tax Act was passed late in the fourth quarter of 2017, and ongoing guidance and accounting interpretation are expected over the next 12 months, we consider the accounting of the transition tax, deferred tax re-measurements, and other items to be incomplete due to the forthcoming guidance and our ongoing analysis of final year-end data and tax positions. We expect to complete our analysis within the measurement period in accordance with SAB 118. The net deferred tax liability in the accompanying balance sheets includes the following amounts of deferred tax assets and liabilities: 2018 2017 Deferred tax liability: $ — $ — Deferred tax asset Temporary differences Net Operating Loss Carryforward 9,973,745 9,307,403 Valuation allowance (9,973,745) (9,307,403) Net deferred tax asset — — Net deferred tax liability $ — $ — The provision for income taxes has been computed as follows: 2018 2017 Expected income tax recovery (expense) at the statuary rate of 27.64% $ (3,358,672) $ (1,923,505) Tax effect of expenses that are not deductible for income tax purposes (net of other amounts deductible for tax purposes) 106,748 181,294 Tax effect of differences in the timing of deductibility of items for income tax purposes: (2,585,582) 141,066 Utilization of non-capital tax losses to offset current taxable income — — Change in valuation allowance 666,342 1,601,145 Provision for income taxes $ — $ — The valuation allowance was established to reduce the deferred tax asset to the amount that will more likely than not be realized. This is necessary due to the Company’s continued operating losses and the uncertainty of the Company’s ability to offset future taxable income through 2037. The net change in the valuation allowance for the year ended December 31, 2018 and 2017 was an increased/ (decreased) of $666,342 and $1,601,145, respectively. The components of income tax expense related to continuing operations are as follows: 2018 2017 Federal Current $ — $ — Deferred — — $ — $ — State and Local Current $ — $ — Deferred — — $ — $ — 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. (J) Business Segments The Company operates in one segment and therefore segment information is not presented. (K) Recent Accounting Pronouncements 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 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 evaluated the impact of adopting the new standard and concluded that there was no material impact on the Company’s revenue recognition policy. 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 adoption of this guidance did not have a material impact on our financial statements. In October 2016, the FASB issued Accounting Standards Update No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers Other than Inventory (ASU 2016-16), which requires companies to recognize the income-tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs, rather than when the asset has been sold to an outside party. We adopted the new standard effective January 1, 2018, using the modified retrospective transition approach. The adoption of this guidance did not have a material impact on our financial statements. In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18), which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. We adopted the new standard effective October 1, 2018, using the retrospective transition approach for all periods presented. The adoption of this guidance did not have a material impact on our financial statements. 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. We adopted the new standard effective October 1, 2018 on a prospective basis. The adoption of this guidance did not have a material impact on our 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 commencing on January 1, 2020 on a prospective basis, and early adoption is permitted. We do not expect the standard to have a material impact on our financial statements. All other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable. (L) 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 December 31, 2018 and December 31, 2017, using quoted prices in active markets for identical liabilities (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3): December 31 , 2018 December 31, 2017 Fair Value Measurement Using Fair Value Measurement Using Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Derivative Liabilities — 13,849,591 — 13,849,591 — 5,909,121 — 5,909,121 (M) 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. (N) 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. (O) 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. (P) 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. (Q) 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. |
Going Concern
Going Concern | 12 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Going Concern | NOTE 2 GOING CONCERN As reflected in the accompanying financial statements, the Company had a net loss of $12,153,248 for the year ended December 31, 2018, has an accumulated deficit of $93,595,670 as of December 31, 2018, and has negative cash flow from operations of $1,100,221 for the year ended December 31, 2018. 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, 2018 was not sufficient to meet the cash requirements to fund planned operations through December 31, 2019 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 | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 3 DEBT AND ACCOUNTS PAYABLE Debt consists of the following: AS of December 31, 2018 As of December 31, 2017 Line of credit– related party $ 306,575 $ 34,156 Accrued interest – related party 233,484 - Accrued expenses – related party 170,945 43,000 Convertible debt $ 6,160,429 6,112,938 Less: debt discount (169,377 ) (610,686 ) Less: debt issue costs (3,525 ) (27,436 ) Convertible debt - net 5,987,527 5,474,816 Total current debt 6,698,531 $ 5,551,972 (A) Line of credit – related party Line of credit with the principal stockholder consisted of the following activity and terms: Principal Interest Rate Balance – December 31, 2016 $- Borrowings during the year ended December 31, 2017 48,850 Interest accrual 306 Repayments ($15,000 ) Balance - December 31, 2017 $ 34,156 Borrowings during the years ended December 31, 2018 557,299 4 % Interest accrual 3,792 Repayments (284,957 ) Balance - December 31, 2018 $ 310,290 Accounts payable consists of the following : As of December 31, 2018 As of December 31, 2017 Accounts Payable $ 675,295 $ 399,761 Total accounts payable $ 675,295 $ 399,761 (B) Convertible Debt During the year ended December 31, 2018 and year ended December 31, 2017, the Company issued convertible notes totaling $869,579, less the original issue discount and debt issue costs of $42,379, for net proceeds of $827,200 and $1,753,411, respectively. The convertible notes issued for years December 31, 2018 and 31, 2017, consist of the following terms: Year ended December 31, 2018 Amount of Principal Raised Year ended December 31, 2017 Amount of Principal Raised Interest Rate 0% - 12% 0% - 12% Default interest rate 14% - 22% 14% - 22% Maturity November 4, 2015 –May 22, 2019 November 4, 2015 –December 7, 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. 3,691,578 3,495,100 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. 1,131,560 1,164,777 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. 50,000 Paid on conversion 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. 265,050 487,061 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. 204,579 Paid on conversion 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 Paid on conversion 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. 52,662 201,000 Convertible Debt 6,160,429 6,112,938 Less: Debt Discount (169,377 ) (610,686 ) Less: Debt Issue Costs (3,525 ) (27,436 ) Convertible Debt - net 5,987,527 5,474,816 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 year ended December 31, 2018, the Company converted debt and accrued interest, totaling $878,214 into 4,289,679,230 shares of common stock During the year ended December 31, 2017, the Company converted debt and accrued interest, totaling $1,309,243 into 1,229,440,607 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 year ended December 31, 2017 1,972,868 8 % Non-Cash Reclassification of accrued interest converted 85,459 Conversion of debt to into 1,229,440,607 shares of common stock with a valuation of 1,309,243 ($0.00045 - $0.00731/share) including the accrued interest of $85,459 (824,381 ) Convertible Debt Balance as of December 31, 2017 6,112,938 4% - 10% November 4, 2015 –December 7, 2018 Borrowings during the year ended December 31, 2018 869,579 8 % Non-Cash Reclassification of accrued interest converted 56,126 Conversion of debt to into 4,373,012,563 shares of common stock with a valuation of 878,214 ($0.0006 - $0.00065/share) including the accrued interest of $56,126 (878,214 ) Convertible Debt Balance as of December 31, 2018 6,160,429 4% - 12% November 4, 2015 –May 22, 2019 (B) Debt Issue Costs During the years ended December 31, 2018, the Company paid debt issue costs totaling $20,500 During the year ended December 31, 2017, the Company paid debt issue costs totaling $77,525. The following is a summary of the Company’s debt issue costs: Year ended December 31 , 2018 Year Ended December 31, 2017 Debt issue costs $ 362,423 343,898 Accumulated amortization of debt issue costs (358,898 ) (316,462 ) Debt issue costs – net $ 3,525 27,436 During the years ended December 31, 2018 and 2017 the Company amortized $44,426 and $96,338, of debt issue costs, respectively. (C) Debt Discount & Original Issue Discount During the years ended December 31, 2018 and 2017, the Company recorded debt discounts totaling $813,386 and $2,647,357, respectively. The debt discount and the original issue discount recorded in 2018 and 2017 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 $1,276,576 and $2,647,357 during the years ended December 31, 2018 and 2017, respectively, to amortization of debt discount expense. Years the ended December 31, 2018 Year Ended December 31, 2017 Debt discount $ 13,221,839 12,386,574 Accumulated amortization of debt discount (13,052,462 ) (11,775,888 ) Debt discount - Net $ 169,377 610,686 (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. Subsequently, 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%. As of December 31, 2017, the principal stockholder has advanced $47,450 to the Company and was repaid $15,000 under the terms of this line of credit agreement. As of December 31, 2017 $34,156 is owed under the line of credit including the accrued interest of $306. During the year ended December 31, 2018, the principal stockholder has advanced $557,299 accrued $3,792 in interest and was repaid $284,957 under the terms of this line of credit. The line of credit balance and accrued interest as of December 31, 2018 is $310,290. |
Convertible Debt - Derivative L
Convertible Debt - Derivative Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Convertible Debt - Derivative Liabilities | NOTE 4 DERIVATIVE LIABILITIES The Company identified conversion features embedded within convertible debt issued in 2018 and 2017. 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 2,577,074 Change in fair value of embedded derivative liability for warrants issued (200,480) Change in fair value of embedded derivative liability for convertible instruments (668,281) Reclassification to additional paid in capital for financial instruments that ceased to be a derivative liability (1,319,638 ) Change from repayments (386,494 ) Derivative Liability -December 31, 2017 $ 5,909,121 Fair value at the commitment date for convertible instruments 1,188,688 Change in fair value of embedded derivative liability for warrants issued 17,993 Change in fair value of embedded derivative liability for convertible instruments 8,062,258 Reclassification to additional paid in capital for financial instruments that ceased to be a derivative liability (1,328,469 ) Derivative Liability –December 31, 2018 $ 13,849,591 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 years ended December 31, 2018 and 2017 of $375,302 and $639,224 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 December 31, 2018: Commitment Date Re-measurement Date Expected dividends: — — Expected volatility: 133% - 262% 296.54%-579.57% Expected term: 0.08 - 3 Years 0.11–1.01 Years Risk free interest rate: 0.06% - 2.31% 2.23% - 2.63% 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, 2017: Commitment Date Re-measurement Date Expected dividends: — — Expected volatility: 133% - 262% 90.12% -297% Expected term: 0.08 - 3 Years 0.01–1.40 Years Risk free interest rate: 0.06% - 1.60% 0.01% - .1.83% |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 5 PROPERTY AND EQUIPMENT At December 31, 2018 and 2017, respectively, property and equipment is as follows: December 31, 2018 December 31, 2017 Website Development $ 294,795 $ 294,795 Furniture and Equipment 143,071 143,071 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 584,588 584,588 Less: impairment of assets (28,211) - Less: accumulated depreciation and amortization (556,377 ) (540,525 ) Property and Equipment, Net $ - $ 44,063 Depreciation expense for the years ended December 31, 2018 and 2017 totaled $15,852 and $42,459, respectively. During the year ended December 31, 2018, the Company recorded an asset impairment of $28,211 consisting of office furniture and equipment. The assets are fully impaired and the remaining carrying value is $0 for the year ended December 31, 2018. |
Stockholders' Deficit
Stockholders' Deficit | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
STOCKHOLDERS' DEFICIT | NOTE 6 STOCKHOLDERS’ DEFICIT 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. On February 1, 2018, 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 5,750,000,000 shares of common stock from 4,250,000,000 shares of common stock to 10,000,000,000 shares of common stock. (A) Common Stock During the years ended December 31, 2018, the Company issued the following common stock: Transaction Type Quantity Valuation Range of Value per share Conversion of convertible debt and accrued interest 4,373,012,563 $ 878,214 $0.0006 to- $0.00065 Services - rendered 32,678,571 46,200 $ 0.0026 Shares issued in exchange for warrant forgiveness 9,200,000 2,760 $ 0.0003 Total shares issued 4,414,891,134 $ 927,474 During the year ended December 31, 2017, the Company issued the following common stock: Transaction Type Quantity Valuation Range of Value per share Conversion of convertible debt and accrued interest 1,229,440,607 $ 1,309,243 $0.00045 to- $0.00731 Services - rendered 6,000,000 54,600 $0.0011 - $0.0107 Shares issued in exchange of interest – related party 800,000,000 960,000 $ 0.00001 Shares repurchased (13,000,000 ) (15,000 ) $ .0014 Total shares issued 1,222,440,607 $ 2,308,843 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 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 on October 2, 2017 and for Mr. Halpern's forgiveness of $960,000 of interest owed to Mr. Halpern for his Preferred Shares accrued dividend rate of 8% per annum of his already owned 5 million Series A Convertible Preferred Shares, the Board deemed it proper to grant Mr. Halpern an additional 800,000,000 shares of the Company's common stock, which at Mr. Halpern's election he may convert into 5,000,000 additional Series A Convertible Preferred Shares with the same voting rights and percentages as his previously granted and owned 5,000,000 Series A Convertible Preferred Shares. On November 8, 2017, the Company, at Greg Halpern's election, converted 800,000,000 shares of Common Stock into 5,000,000 Series A Convertible Preferred Shares representing 33.4% of the Company’s voting rights and control adding to Halpern’s existing 33.4% holdings, equaling 66.8% of the Company’s total voting rights and control. 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 represent 33.4% 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 years ended December 31, 2018 and 2017, respectively, the Company has not declared dividends. (B) Stock Warrants The following tables summarize all warrant grants as of December 31, 2018, 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, 2017 19,220,690 $ 0.01 1.2 Granted — Exercised — Cancelled/Forfeited (7,600,000 ) Balance, December 31, 2018 11,620,690 $ 0.01 0.2 On May 7, 2018, the Company issued 9,200,000 shares of Company’s common stock to consultant in exchange for forgiveness of Warrant Agreement with the Company with a fair value of $2,760 ($0.0003/Share). A summary of all outstanding and exercisable warrants as of December 31, 2018 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 0.16 $ — $ 0.005 1,000,000 1,000,000 0.40 $ — $ 0.0029 8,620,690 8,620,690 0.25 $ — 13,620,690 13,620,690 0.25 $ — A summary of all outstanding and exercisable warrants as of December 31, 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 1.16 $ — $ 0.005 1,000,000 1,000,000 1.40 $ — $ 0.0029 8,620,690 8,620,690 1.25 $ — $ 0.006 5,600,000 5,600,000 1.39 $ 0.12 2,000,000 2,000,000 0.77 $ — 19,220,690 19,220,690 1.2 $ — (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 year ended December 31, 2018. 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 December 31, 2018, and the related changes during these periods are presented below: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in Years) 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 – December 31, 2017 95,332,500 $ 0.13 1.02 Exercised — $ — — Forfeited or Canceled - ) $ — — Outstanding – December 31, 2018 95,332,500 $ 0.0025- 1.51- Exercisable – December 31, 2018 95,332,500 |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS | NOTE 7 COMMITMENTS (A) Consulting Agreement On July 1, 2018 the Company entered into a new engagement with a consultant for a period of one year. Either Consultant or the Company may terminate the agreement at any time and for any reason by giving the other party 5 day notice. In connection with this agreement, the consultant will receive a compensation equal to $120,000 on or before June 30, 2019. No payments have been made as of December 31, 2018 and the amount was accrued. On March 5, 2018 the Company entered into a consulting services agreement with a consultant. The agreement will continue until March 5, 2019. During the last nine months of the agreement, either Consultant or the Company may terminate the agreement at any time and for any reason by giving the other party 5 day notice. In connection with this agreement, the consultant received shares of common stock and hourly compensation. On April 4, 2018 the Company issued 2,678,571 shares of Company’s common stock in connection with March 5, 2018 consulting agreement with a f air value of On January 29, 2018 the Company entered into a consulting services agreement with a consultant. The agreement will continue until January 29, 2019. During the last nine months of the agreement, either Consultant or the Company may terminate the agreement at any time and for any reason by giving the other party 30 day notice. In connection with this agreement, the consultant received 30,000,000 shares of common stock each upon the executing of the agreement with a fair value of $45,000 ($0.0015/share). 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 September 30, 2018, and (iv) $7,500 on October 31, 2018. (B) 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 | 12 Months Ended |
Dec. 31, 2018 | |
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 proceedings against 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. For the years ended December 31, 2018 and 2017, respectively, the Company recorded judgement payable on the balance sheet for $819,626, respectively. 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 Racketeer 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 | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 9 SUBSEQUENT EVENTS Subsequent to December 31, 2018, principal shareholder paid an aggregate $56,351 in expenses on Company’s behalf as an advance under the terms of the line of credit agreement (See Note 3 (D)). |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies and Organization (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
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 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. |
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 December 31, 2018 and December 31, 2017, 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 December 31, 2018 and December 31, 2017. |
Revenue Recognition | G) Revenue Recognition Effective January 1, 2018, the Company recognizes revenue in accordance with Accounting Standards Codification 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific revenue recognition guidance throughout the Industry Topics of the Accounting Standards Codification. The updated guidance states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also provides for additional disclosures with respect to revenues and cash flows arising from contracts with customers. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2017, and the Company adopted the standard using the modified retrospective approach effective January 1, 2018. |
Loss Per Share | (H) 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 years ended December 31, 2018 and 2017 excludes the common stock equivalents of the following potentially dilutive securities because their inclusion would be anti-dilutive: December 31, 2018 December 31, 2017 Stock Warrants (Exercise price - $0.25 - $.52/share) 11,620,690 19,220,690 Stock Options (Exercise price - $0.00250/share) 95,332,500 95,332,500 Convertible Debt (Exercise price - $0.0001 - $.000150/share) 85,342,765,754 8,399,417,649 Series A Convertible Preferred Shares ($0.01/share) 250,000,000 250,000,000 Total 85,699,718,944 8,763,970,809 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 82,273,571,767 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 | (I) 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. On December 22, 2017, the 2017 Tax Cuts and Jobs Act (the Tax Act) was enacted into law and the new legislation contains several key tax provisions that affected us, including a one-time mandatory transition tax on accumulated foreign earnings and a reduction of the corporate income tax rate to 21% effective January 1, 2018, among others. We are required to recognize the effect of the tax law changes in the period of enactment, such as determining the transition tax, remeasuring our U.S. deferred tax assets and liabilities as well as reassessing the net realizability of our deferred tax assets and liabilities. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), which allows us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. Since the Tax Act was passed late in the fourth quarter of 2017, and ongoing guidance and accounting interpretation are expected over the next 12 months, we consider the accounting of the transition tax, deferred tax re-measurements, and other items to be incomplete due to the forthcoming guidance and our ongoing analysis of final year-end data and tax positions. We expect to complete our analysis within the measurement period in accordance with SAB 118. The net deferred tax liability in the accompanying balance sheets includes the following amounts of deferred tax assets and liabilities: 2018 2017 Deferred tax liability: $ — $ — Deferred tax asset Temporary differences Net Operating Loss Carryforward 9,973,745 9,307,403 Valuation allowance (9,973,745) (9,307,403) Net deferred tax asset — — Net deferred tax liability $ — $ — The provision for income taxes has been computed as follows: 2018 2017 Expected income tax recovery (expense) at the statuary rate of 27.64% $ (3,358,672) $ (1,923,505) Tax effect of expenses that are not deductible for income tax purposes (net of other amounts deductible for tax purposes) 106,748 181,294 Tax effect of differences in the timing of deductibility of items for income tax purposes: (2,585,582) 141,066 Utilization of non-capital tax losses to offset current taxable income — — Change in valuation allowance 666,342 1,601,145 Provision for income taxes $ — $ — The valuation allowance was established to reduce the deferred tax asset to the amount that will more likely than not be realized. This is necessary due to the Company’s continued operating losses and the uncertainty of the Company’s ability to offset future taxable income through 2037. The net change in the valuation allowance for the year ended December 31, 2018 and 2017 was an increased/ (decreased) of $666,342 and $1,601,145, respectively. The components of income tax expense related to continuing operations are as follows: 2018 2017 Federal Current $ — $ — Deferred — — $ — $ — State and Local Current $ — $ — Deferred — — $ — $ — 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 | (J) Business Segments The Company operates in one segment and therefore segment information is not presented. |
Recent Accounting Pronouncements | K) Recent Accounting Pronouncements 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 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 evaluated the impact of adopting the new standard and concluded that there was no material impact on the Company’s revenue recognition policy. 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 adoption of this guidance did not have a material impact on our financial statements. In October 2016, the FASB issued Accounting Standards Update No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers Other than Inventory (ASU 2016-16), which requires companies to recognize the income-tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs, rather than when the asset has been sold to an outside party. We adopted the new standard effective January 1, 2018, using the modified retrospective transition approach. The adoption of this guidance did not have a material impact on our financial statements. In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18), which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. We adopted the new standard effective October 1, 2018, using the retrospective transition approach for all periods presented. The adoption of this guidance did not have a material impact on our financial statements. 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. We adopted the new standard effective October 1, 2018 on a prospective basis. The adoption of this guidance did not have a material impact on our 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 commencing on January 1, 2020 on a prospective basis, and early adoption is permitted. We do not expect the standard to have a material impact on our financial statements. All other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable. |
Fair Value of Financial Instruments | (L) 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 December 31, 2018 and December 31, 2017, using quoted prices in active markets for identical liabilities (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3): December 31 , 2018 December 31, 2017 Fair Value Measurement Using Fair Value Measurement Using Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Derivative Liabilities — 13,849,591 — 13,849,591 — 5,909,121 — 5,909,121 |
Stock-Based Compensation | (M) 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 | (N) 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 | O) 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 | P) 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 | Q) 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. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies and Organization (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of potentially dilutive securities | December 31, 2018 December 31, 2017 Stock Warrants (Exercise price - $0.25 - $.52/share) 11,620,690 19,220,690 Stock Options (Exercise price - $0.00250/share) 95,332,500 95,332,500 Convertible Debt (Exercise price - $0.0001 - $.000150/share) 85,342,765,754 8,399,417,649 Series A Convertible Preferred Shares ($0.01/share) 250,000,000 250,000,000 Total 85,699,718,944 8,763,970,809 |
Fair Value of Financial Instruments | December 31 , 2018 December 31, 2017 Fair Value Measurement Using Fair Value Measurement Using Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Derivative Liabilities — 13,849,591 — 13,849,591 — 5,909,121 — 5,909,121 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Summary of Convertible Debt | AS of December 31, 2018 As of December 31, 2017 Line of credit– related party $ 306,575 $ 34,156 Accrued interest – related party 233,484 - Accrued expenses – related party 170,945 43,000 Convertible debt $ 6,160,429 6,112,938 Less: debt discount (169,377 ) (610,686 ) Less: debt issue costs (3,525 ) (27,436 ) Convertible debt - net 5,987,527 5,474,816 Total current debt 6,698,531 $ 5,551,972 |
Line of Credit With Principal Stockholder | Principal Interest Rate Balance – December 31, 2016 $- Borrowings during the year ended December 31, 2017 48,850 Interest accrual 306 Repayments ($15,000 ) Balance - December 31, 2017 $ 34,156 Borrowings during the years ended December 31, 2018 557,299 4 % Interest accrual 3,792 Repayments (284,957 ) Balance - December 31, 2018 $ 310,290 |
Accounts Payable | As of December 31, 2018 As of December 31, 2017 Accounts Payable $ 675,295 $ 399,761 Total accounts payable $ 675,295 $ 399,761 |
Convertible Debt | Year ended December 31, 2018 Amount of Principal Raised Year ended December 31, 2017 Amount of Principal Raised Interest Rate 0% - 12% 0% - 12% Default interest rate 14% - 22% 14% - 22% Maturity November 4, 2015 –May 22, 2019 November 4, 2015 –December 7, 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. 3,691,578 3,495,100 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. 1,131,560 1,164,777 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. 50,000 Paid on conversion 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. 265,050 487,061 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. 204,579 Paid on conversion 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 Paid on conversion 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. 52,662 201,000 Convertible Debt 6,160,429 6,112,938 Less: Debt Discount (169,377 ) (610,686 ) Less: Debt Issue Costs (3,525 ) (27,436 ) Convertible Debt - net 5,987,527 5,474,816 |
Convertible Debt Terms | Convertible Debt Balance as of December 31, 2016 5,597,598 4% - 10% November 4, 2015 –March 10, 2018 Borrowings during the year ended December 31, 2017 1,972,868 8 % Non-Cash Reclassification of accrued interest converted 85,459 Conversion of debt to into 1,229,440,607 shares of common stock with a valuation of 1,309,243 ($0.00045 - $0.00731/share) including the accrued interest of $85,459 (824,381 ) Convertible Debt Balance as of December 31, 2017 6,112,938 4% - 10% November 4, 2015 –December 7, 2018 Borrowings during the year ended December 31, 2018 869,579 8 % Non-Cash Reclassification of accrued interest converted 56,126 Conversion of debt to into 4,373,012,563 shares of common stock with a valuation of 878,214 ($0.0006 - $0.00065/share) including the accrued interest of $56,126 (878,214 ) Convertible Debt Balance as of December 31, 2018 6,160,429 4% - 12% November 4, 2015 –May 22, 2019 |
Debt Issue Costs | Year ended December 31 , 2018 Year Ended December 31, 2017 Debt issue costs $ 362,423 343,898 Accumulated amortization of debt issue costs (358,898 ) (316,462 ) Debt issue costs – net $ 3,525 27,436 |
Debt Discount | Years the ended December 31, 2018 Year Ended December 31, 2017 Debt discount $ 13,221,839 12,386,574 Accumulated amortization of debt discount (13,052,462 ) (11,775,888 ) Debt discount - Net $ 169,377 610,686 |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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 2,577,074 Change in fair value of embedded derivative liability for warrants issued (200,480) Change in fair value of embedded derivative liability for convertible instruments (668,281) Reclassification to additional paid in capital for financial instruments that ceased to be a derivative liability (1,319,638 ) Change from repayments (386,494 ) Derivative Liability -December 31, 2017 $ 5,909,121 Fair value at the commitment date for convertible instruments 1,188,688 Change in fair value of embedded derivative liability for warrants issued 17,993 Change in fair value of embedded derivative liability for convertible instruments 8,062,258 Reclassification to additional paid in capital for financial instruments that ceased to be a derivative liability (1,328,469 ) Derivative Liability –December 31, 2018 $ 13,849,591 |
Management Assumptions | Commitment Date Re-measurement Date Expected dividends: — — Expected volatility: 133% - 262% 296.54%-579.57% Expected term: 0.08 - 3 Years 0.11–1.01 Years Risk free interest rate: 0.06% - 2.31% 2.23% - 2.63% 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, 2017: Commitment Date Re-measurement Date Expected dividends: — — Expected volatility: 133% - 262% 90.12% -297% Expected term: 0.08 - 3 Years 0.01–1.40 Years Risk free interest rate: 0.06% - 1.60% 0.01% - .1.83% |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Summary of property and equipment | December 31, 2018 December 31, 2017 Website Development $ 294,795 $ 294,795 Furniture and Equipment 143,071 143,071 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 584,588 584,588 Less: impairment of assets (28,211) - Less: accumulated depreciation and amortization (556,377 ) (540,525 ) Property and Equipment, Net $ - $ 44,063 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Summary of Common Stock | During the years ended December 31, 2018, the Company issued the following common stock: Transaction Type Quantity Valuation Range of Value per share Conversion of convertible debt and accrued interest 4,373,012,563 $ 878,214 $0.0006 to- $0.00065 Services - rendered 32,678,571 46,200 $ 0.0026 Shares issued in exchange for warrant forgiveness 9,200,000 2,760 $ 0.0003 Total shares issued 4,414,891,134 $ 927,474 During the year ended December 31, 2017, the Company issued the following common stock: Transaction Type Quantity Valuation Range of Value per share Conversion of convertible debt and accrued interest 1,229,440,607 $ 1,309,243 $0.00045 to- $0.00731 Services - rendered 6,000,000 54,600 $0.0011 - $0.0107 Shares issued in exchange of interest – related party 800,000,000 960,000 $ 0.00001 Shares repurchased (13,000,000 ) (15,000 ) $ .0014 Total shares issued 1,222,440,607 $ 2,308,843 |
Summary of warrants activity | Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in Years) Balance, December 31, 2017 19,220,690 $ 0.01 1.2 Granted — Exercised — Cancelled/Forfeited (7,600,000 ) Balance, December 31, 2018 11,620,690 $ 0.01 0.2 |
Summary of all outstanding and exercisable warrants | A summary of all outstanding and exercisable warrants as of December 31, 2018 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 0.16 $ — $ 0.005 1,000,000 1,000,000 0.40 $ — $ 0.0029 8,620,690 8,620,690 0.25 $ — 13,620,690 13,620,690 0.25 $ — A summary of all outstanding and exercisable warrants as of December 31, 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 1.16 $ — $ 0.005 1,000,000 1,000,000 1.40 $ — $ 0.0029 8,620,690 8,620,690 1.25 $ — $ 0.006 5,600,000 5,600,000 1.39 $ 0.12 2,000,000 2,000,000 0.77 $ — 19,220,690 19,220,690 1.2 |
Summary of Stock Options | Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in Years) 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 – December 31, 2017 95,332,500 $ 0.13 1.02 Exercised — $ — — Forfeited or Canceled - ) $ — — Outstanding – December 31, 2018 95,332,500 $ 0.0025- 1.51- Exercisable – December 31, 2018 95,332,500 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies and Organization (Details) - shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of potentially dilutive securities | ||
Potentially dilutive securities | 85,699,718,944 | 8,763,970,809 |
Preferred Stock | ||
Summary of potentially dilutive securities | ||
Potentially dilutive securities | 250,000,000 | 250,000,000 |
Warrant [Member] | ||
Summary of potentially dilutive securities | ||
Potentially dilutive securities | 11,620,690 | 19,220,690 |
Equity Option [Member] | ||
Summary of potentially dilutive securities | ||
Potentially dilutive securities | 95,332,500 | 95,332,500 |
Convertible Debt Securities [Member] | ||
Summary of potentially dilutive securities | ||
Potentially dilutive securities | 85,342,765,754 | 8,399,417,649 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies and Organization (Details) (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Stock Warrants | Minimum | ||
Exercise Price | $ 0.25 | $ .25 |
Stock Warrants | Maximum | ||
Exercise Price | .52 | .52 |
Equity Option [Member] | ||
Exercise Price | .0025 | .0025 |
Convertible Debt | Minimum | ||
Exercise Price | .0001 | .0001 |
Convertible Debt | Maximum | ||
Exercise Price | .00015 | .00015 |
Series A Convertible Preferred Shares | ||
Exercise Price | $ .01 | $ .01 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies and Organization (Details Narrative) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||
Cash Equivalents | $ 0 | $ 0 |
Cash in banks in excess of FDIC Insurance Limits | $ 0 | $ 0 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies and Organization - Fair Value of Financial Instruments (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Derivative Liabilities | $ 13,849,591 | $ 5,909,121 |
Fair Value, Inputs, Level 1 [Member] | ||
Derivative Liabilities | ||
Fair Value, Inputs, Level 2 [Member] | ||
Derivative Liabilities | 13,849,591 | 5,909,121 |
Fair Value, Inputs, Level 3 [Member] | ||
Derivative Liabilities |
Going Concern (Details Narrativ
Going Concern (Details Narrative) | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Notes to Financial Statements | |
Net Loss (Income) | $ 12,153,248 |
Working Capital Deficit | 93,595,670 |
Cash Flow from Operations | $ 1,100,221 |
Debt - Summary of Convertible D
Debt - Summary of Convertible Debt (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
Line of credit– related party | $ 306,575 | $ 34,156 |
Accrued interest – related party | 233,484 | |
Accrued expenses – related party | 170,945 | 43,000 |
Convertible debt | 6,160,429 | 6,112,938 |
Less: debt discount | (169,377) | (610,686) |
Less: debt issue costs | 3,525 | 27,436 |
Convertible debt - net | 5,987,527 | 5,474,816 |
Total current debt | $ 6,698,531 | $ 5,551,972 |
Debt - Line of Credit With Prin
Debt - Line of Credit With Principle Stockholder (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Beginning Balance, Line of Credit | $ 34,156 | |
Borrowings during period | 557,679 | $ 48,500 |
Repayments | (284,954) | (15,000) |
Ending Balance, Line of Credit | 306,575 | 34,156 |
Principle Stockholder | ||
Beginning Balance, Line of Credit | 34,156 | |
Borrowings during period | $ 557,299 | |
Interest Rate | 4.00% | |
Interest accrual | $ 3,792 | |
Repayments | (284,957) | |
Ending Balance, Line of Credit | $ 310,290 | $ 34,156 |
Debt - Accounts Payable (Detail
Debt - Accounts Payable (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
Accounts Payable | $ 675,295 | $ 399,761 |
Total accounts payable | $ 675,295 | $ 399,761 |
Debt - Schedule Of Debt Instrum
Debt - Schedule Of Debt Instruments (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Maturity | November 4, 2015 ?May 22, 2019 | November 4, 2015 ?December 7, 2018 |
Convertible Debt | $ 6,160,429 | $ 6,112,938 |
Less: Debt Discount | (169,377) | (610,686) |
Less: Debt Issue Costs | (3,525) | (27,436) |
Convertible Debt - net | $ 5,987,527 | $ 5,474,816 |
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 Principal Raised | $ 3,691,578 | $ 3,495,100 |
Conversion Terms 2 | ||
Conversion Terms | 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. | 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. |
Amount of Principal Raised | $ 1,131,560 | $ 1,164,777 |
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 Principal 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 Principal 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 Principal Raised | ||
Conversion Terms 6 | ||
Conversion Terms | Conversion at $0.10 per share | Conversion at $0.10 per share |
Amount of Principal 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 Principal Raised | $ 50,000 | |
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 Principal Raised | $ 265,050 | $ 487,061 |
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 Principal Raised | $ 204,579 | |
Conversion Terms 10 | ||
Conversion Terms | 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. | 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. |
Amount of Principal Raised | ||
Conversion Terms 11 | ||
Conversion Terms | 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. | 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. |
Amount of Principal Raised | ||
Conversion Terms 12 | ||
Conversion Terms | 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. | 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. |
Amount of Principal Raised | $ 52,662 | $ 201,000 |
Minimum | ||
Interest Rate | 8.00% | 14.00% |
Maximum | ||
Interest Rate | 8.00% | 22.00% |
Debt - Convertible Debt (Detail
Debt - Convertible Debt (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Convertible Debt Beginning Balance, Value | $ 6,112,938 | |
Convertible Debt Terms, Start of Period | November 4, 2015 - December 7, 2018 | |
Borrowings during period | $ 869,579 | |
Non-Cash Reclassification of accrued interest converted | 56,126 | |
Conversion of debt to into 4,289,679,230 shares of common stock with a valuation of $824,379 ($0.0006 - $0.00065/share) including the accrued interest of $55,293 | $ 878,214 | |
Convertible Debt Terms, End of Period | November 4, 2015 - May 22, 2019 | |
Convertible Debt Ending Balance, Value | $ 6,160,429 | $ 6,112,938 |
Maximum | ||
Convertible Debt Beginning Balance, Interest Rate | 4.00% | |
Interest Rate of Borrowings During Period | 8.00% | 22.00% |
Convertible Debt Ending Balance, Interest Rate | 4.00% | 4.00% |
Minimum | ||
Convertible Debt Beginning Balance, Interest Rate | 8.00% | |
Interest Rate of Borrowings During Period | 8.00% | 14.00% |
Convertible Debt Ending Balance, Interest Rate | 12.00% | 8.00% |
Debt - Debt Discount (Details)
Debt - Debt Discount (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Disclosure [Abstract] | ||
Debt discount | $ 13,221,839 | $ 12,386,574 |
Accumulated amortization of debt discount | (13,052,462) | (11,775,888) |
Debt discount - Net | $ 169,377 | $ 610,686 |
Debt and Accounts Payable (Deta
Debt and Accounts Payable (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Disclosure [Abstract] | ||
Convertible Notes Issued, Value | $ 869,579 | $ 869,579 |
Original Issue Discount and Debt Issue Costs | 42,379 | 42,379 |
Net Proceeds of Issuance of Convertible Notes | 827,200 | 1,753,411 |
Debt Conversion To Stock, Amount | $ 878,214 | $ 1,309,243 |
Debt Conversion To Stock, Shares | 4,289,679,230 | 1,229,440,607 |
Debt Issue Costs Paid | $ 20,500 | $ 77,525 |
Debt Discounts Recorded | 813,386 | 264,735 |
Amortization of Debt Discount Expense | $ 1,276,575 | $ 2,647,357 |
Line of Credit Terms | 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. Subsequently, 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%. As of December 31, 2017, the principal stockholder has advanced $47,450 to the Company and was repaid $15,000 under the terms of this line of credit agreement. As of December 31, 2017 $34,156 is owed under the line of credit including the accrued interest of $306. During the year ended December 31, 2018, the principal stockholder has advanced $557,299 accrued $3,792 in interest and was repaid $284,957 under the terms of this line of credit. The line of credit balance and accrued interest as of December 31, 2018 is $310,290. |
Derivative Liabilities - Fair V
Derivative Liabilities - Fair Value of the Conversion Feature (Details) | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Notes to Financial Statements | |
Derivative Liability, beginning balance | $ 5,909,121 |
Fair value at the commitment date for convertible instruments | 1,188,688 |
Change in fair value of embedded derivative liability for warrants issued | 17,993 |
Change in fair value of embedded derivative liability for convertible instruments | 8,062,258 |
Reclassification to additional paid in capital for financial instruments that ceased to be a derivative liability | (1,328,469) |
Derivative Liability, ending balance | $ 13,849,591 |
Derivative Liabilities - Manage
Derivative Liabilities - Management Assumptions (Details) | Dec. 31, 2018USD ($)yr | Dec. 31, 2017USD ($)yr |
Expected dividends: | $ | ||
Minimum | ||
Expected volatility: | 133.00% | 133.00% |
Expected term: | .08 | .08 |
Risk free interest rate: | 0.06% | 0.06% |
Maximum | ||
Expected volatility: | 262.00% | 262.00% |
Expected term: | 3 | 3 |
Risk free interest rate: | 2.31% | 1.60% |
Re-measurement | ||
Expected dividends: | $ | ||
Re-measurement | Minimum | ||
Expected volatility: | 296.54% | 90.12% |
Expected term: | .11 | .01 |
Risk free interest rate: | 2.23% | 0.01% |
Re-measurement | Maximum | ||
Expected volatility: | 579.57% | 297.00% |
Expected term: | 1.01 | 1.4 |
Risk free interest rate: | 2.63% | 1.83% |
Derivative Liabilities (Details
Derivative Liabilities (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative Liabilities Details Narrative Abstract | ||
Derivative Expense | $ 375,302 | $ 639,224 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Summary of property and equipment | ||
Total | $ 584,588 | $ 584,588 |
Less: impairment of assets | (28,211) | |
Less: accumulated depreciation and amortization | (556,377) | (540,525) |
Property & Equipment, Net | 44,063 | |
Website Development [Member] | ||
Summary of property and equipment | ||
Total | 294,795 | 294,795 |
Furniture and Equipment [Member] | ||
Summary of property and equipment | ||
Total | 143,071 | 143,071 |
Leasehold Improvements [Member] | ||
Summary of property and equipment | ||
Total | 6,708 | 6,708 |
Computer Software, Intangible Asset [Member] | ||
Summary of property and equipment | ||
Total | 54,598 | 54,598 |
Music Equipment [Member] | ||
Summary of property and equipment | ||
Total | 2,578 | 2,578 |
Office Equipment [Member] | ||
Summary of property and equipment | ||
Total | 80,710 | 80,710 |
Internet Domain Names [Member] | ||
Summary of property and equipment | ||
Total | 1,500 | 1,500 |
Sign [Member] | ||
Summary of property and equipment | ||
Total | $ 628 | $ 628 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation / Amortization Expense | $ 15,852 | $ 42,459 |
Asset Impairment of office furniture and equipment | 28,211 | |
Carrying Value | $ 28,211 |
Stockholders' Deficit- Summary
Stockholders' Deficit- Summary of Common Stock (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Conversion of convertible debt and accrued interest, Quantity | 4,373,012,563 | 1,229,440,607 |
Conversion of convertible debt and accrued interest, Valuation | $ 878,214 | $ 1,309,243 |
Services - rendered, Quantity | 32,678,571 | 6,000,000 |
Services - rendered, Valuation | $ 46,200 | $ 54,600 |
Services - rendered, Value per Share | $ 0.0026 | |
Shares issued in exchange for warrant forgiveness, Quantity | 9,200,000 | |
Shares issued in exchange for warrant forgiveness, Valuation | $ 2,760 | |
Shares issued in exchange for warrant forgiveness, Value per Share | $ 0.0003 | |
Shares issued in exchange of interest - related party, Quantity | 800,000,000 | |
Shares issued in exchange of interest - related party, Valuation | $ 2,760 | $ 960,000 |
Shares issued in exchange of interest - related party, Value per Share | $ 0.00001 | |
Shares Repurchased, Quantity | 13,000,000 | |
Shares Repurchased, Valuation | $ (15,000) | |
Shares Repurchased, Value per share | $ 0.0014 | |
Total shares issued, Quantity | 1,222,440,607 | |
Total shares issued, Valuation | 2,308,843 | |
Minimum | ||
Conversion of convertible debt and accrued interest, Value per share | $ 0.0006 | $ 0.00045 |
Services - rendered, Value per Share | 0.0011 | |
Maximum | ||
Conversion of convertible debt and accrued interest, Value per share | $ 0.00065 | 0.00731 |
Services - rendered, Value per Share | $ 0.0107 |
Stockholders' Deficit- Summar_2
Stockholders' Deficit- Summary of warrants activity (Details) | 12 Months Ended |
Dec. 31, 2018yr$ / sharesshares | |
Equity [Abstract] | |
Number of Warrants, Beginning Balance, Warrants | 19,220,690 |
Number of Warrants, Beginning Balance, Weighted Average Exercise Price | $ / shares | $ 0.01 |
Number of Warrants, Beginning Balance, Weighted Average Remaining Contractual Life (In Years) | yr | 1.2 |
Number of Warrants, Granted | |
Number of Warrants, Exercised | |
Number of Warrants, Cancelled / Forfeited | (7,600,000) |
Number of Warrants, Ending Balance, Warrants | 11,620,690 |
Number of Warrants, Ending Balance, Weighted Average Exercise Price | $ / shares | $ 0.01 |
Number of Warrants, Ending Balance, Weighted Average Remaining Contractual Life (In Years) | yr | 0.25 |
Stockholders' Deficit- Summar_3
Stockholders' Deficit- Summary of all outstanding and exercisable warrants (Details) | Dec. 31, 2018USD ($)yrshares | Dec. 31, 2017USD ($)yrshares |
Warrants Outstanding | 13,620,690 | 19,220,690 |
Warrants Exercisable | 13,620,690 | 19,220,690 |
Weighted Average Remaining Contractual Life | yr | 0.25 | 1.2 |
Aggregate Intrinsic Value | $ | ||
$0.01 | ||
Warrants Outstanding | 2,000,000 | 2,000,000 |
Warrants Exercisable | 2,000,000 | 2,000,000 |
Weighted Average Remaining Contractual Life | yr | 0.16 | 1.16 |
Aggregate Intrinsic Value | $ | ||
$0.005 | ||
Warrants Outstanding | 1,000,000 | 1,000,000 |
Warrants Exercisable | 1,000,000 | 1,000,000 |
Weighted Average Remaining Contractual Life | yr | 0.40 | 1.40 |
Aggregate Intrinsic Value | $ | ||
$0.0029 | ||
Warrants Outstanding | 8,620,690 | 8,620,690 |
Warrants Exercisable | 8,620,690 | 8,620,690 |
Weighted Average Remaining Contractual Life | yr | 0.25 | 1.25 |
Aggregate Intrinsic Value | $ | ||
$0.006 | ||
Warrants Outstanding | 5,600,000 | |
Warrants Exercisable | 5,600,000 | |
Weighted Average Remaining Contractual Life | yr | 1.39 | |
Aggregate Intrinsic Value | $ | ||
$0.12 | ||
Warrants Outstanding | 2,000,000 | |
Warrants Exercisable | 2,000,000 | |
Weighted Average Remaining Contractual Life | yr | 0.77 | |
Aggregate Intrinsic Value | $ |
Stockholders' Deficit- Summar_4
Stockholders' Deficit- Summary of option activity (Details) | 12 Months Ended |
Dec. 31, 2018yr$ / sharesshares | |
Equity [Abstract] | |
Outstanding, Number of Options, Beginning Balance | 2,866,652 |
Outstanding, Weighted Average Exercise Price, Start of Period | $ / shares | $ 0.13 |
Granted, Number of Options | 95,332,500 |
Granted, Weighted Average Exercise Price | $ / shares | $ 0.0025 |
Granted, Weighted Average Contractual Life Remaining | yr | 2 |
Exercised, Number of Options | |
Exercised, Weighted Average Exercise Price | $ / shares | |
Forfeited or Cancelled, Number of Options | (2,866,652) |
Forfeited or Cancelled, Weighted Average Exercise Price | $ / shares | |
Outstanding, Number of Options, Ending Balance | 95,332,500 |
Outstanding, Weighted Average Contractual Life Remaining, End of Period | $ / shares | $ 1.51 |
Exercisable, Number of Options, End of Period | 95,332,500 |
Stockholders Deficit (Details N
Stockholders Deficit (Details Narrative) | Dec. 31, 2018USD ($)$ / sharesshares | May 07, 2018USD ($)$ / sharesshares | Feb. 01, 2018shares | Dec. 31, 2017USD ($)$ / sharesshares | Nov. 08, 2017shares | Oct. 04, 2017shares | Oct. 02, 2017USD ($)shares | Jul. 06, 2017USD ($)yr$ / sharesshares | Apr. 23, 2017shares | Apr. 04, 2017shares | Mar. 04, 2015$ / sharesshares |
Common Stock Authorized | 4,250,000,000 | 10,000,000,000 | 4,250,000,000 | 3,250,000,000 | 2,250,000,000 | ||||||
Line of credit issued | $ | $ 306,575 | $ 34,156 | |||||||||
Convertible Preferred Shares Owned | 0 | ||||||||||
Common Stock Issued, Shares | 6,490,519,491 | 9,200,000 | |||||||||
Common Stock Issued, Value | $ | $ 65,867 | $ 2,760 | $ 21,718 | ||||||||
Common Stock Issued, Value Per Share | $ / shares | $ 0.00001 | $ 0.0003 | |||||||||
Stated Value Per Share | $ / shares | $ 0.0001 | ||||||||||
Stock Options Issued | 95,332,500 | ||||||||||
Expected dividends | $ | |||||||||||
Originally Authorized | |||||||||||
Common Stock Authorized | 4,250,000,000 | 3,250,000,000 | 2,250,000,000 | 1,650,000,000 | |||||||
Increase In Authorization | |||||||||||
Common Stock Authorized | 5,750,000,000 | 1,000,000,000 | 1,000,000,000 | 600,000,000 | |||||||
Chief Financial Officer | |||||||||||
Stock Options Issued | 95,332,500 | ||||||||||
Stock Option Price Per Share | $ / shares | $ 0.00253 | ||||||||||
Stock Option Expense | $ | $ 191,361 | ||||||||||
Expected dividends | $ | $ 0 | ||||||||||
Expected volatility | 178.27% | ||||||||||
Expected term | yr | 3 | ||||||||||
Risk free interest rate | 0.69% | ||||||||||
Greg Halpern | |||||||||||
Accrued Dividend Rate | 8.00% | ||||||||||
Convertible Preferred Shares Owned | 5,000,000 | ||||||||||
Common Stock Issued, Shares | 800,000,000 | ||||||||||
Option to Convert Common Stock to Preferred Stock | 5,000,000 | ||||||||||
Preferred Stock From Conversion | 5,000,000 | ||||||||||
Control of Voting Rights | 66.80% | ||||||||||
Large Shareholder | |||||||||||
Accrued Dividend Rate | 8.00% | ||||||||||
Preferred Stock From Conversion | 5,000,000 | ||||||||||
Control of Voting Rights | 33.40% | ||||||||||
Common Stock Returned For Preferred Stock | 120,000,000 | ||||||||||
Stated Value Per Share | $ / shares | $ 0.04 | ||||||||||
Stated Conversion Price Per Share | $ / shares | $ 0.08 | ||||||||||
Line of Credit | Greg Halpern | |||||||||||
Line of credit issued | $ | $ 200,000 | $ 100,000 | |||||||||
Forgiveness of interest owed | $ | $ 960,000 |
Commitments (Details Narrative)
Commitments (Details Narrative) - USD ($) | 12 Months Ended | ||||||||
Jun. 30, 2019 | Mar. 05, 2019 | Jan. 29, 2019 | Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | May 07, 2018 | Mar. 05, 2018 | Jan. 29, 2018 | |
Common Stock Issued | 6,490,519,491 | 6,490,519,491 | 9,200,000 | ||||||
Common Stock Value | $ 65,867 | $ 65,867 | $ 21,718 | $ 2,760 | |||||
Common Stock Value Per Share | $ 0.00001 | $ 0.00001 | $ 0.0003 | ||||||
Legal Services Cost | $ 221,244 | $ 551,469 | |||||||
Consultant 1 | |||||||||
Date of Agreement | Mar. 5, 2018 | ||||||||
Terms of Agreement | On March 5, 2018 the Company entered into a consulting services agreement with a consultant. The agreement will continue until March 5, 2019. During the last nine months of the agreement, either Consultant or the Company may terminate the agreement at any time and for any reason by giving the other party 5 day notice. In connection with this agreement, the consultant received shares of common stock and hourly compensation. On April 4, 2018 the Company issued 2,678,571 shares of Company’s common stock in connection with March 5, 2018 consulting agreement with a f air value of $1,500 ($$0.00055/share). | ||||||||
Common Stock Issued | 2,678,571 | ||||||||
Common Stock Value | $ 1,500 | ||||||||
Common Stock Value Per Share | $ 0.00055 | ||||||||
Consultant 2 | |||||||||
Date of Agreement | Jan. 29, 2018 | ||||||||
Terms of Agreement | On January 29, 2018 the Company entered into a consulting services agreement with a consultant. The agreement will continue until January 29, 2019. During the last nine months of the agreement, either Consultant or the Company may terminate the agreement at any time and for any reason by giving the other party 30 day notice. In connection with this agreement, the consultant received 30,000,000 shares of common stock each upon the executing of the agreement with a fair value of $44,700 ($0.0015/share). | ||||||||
Common Stock Issued | 30,000,000 | ||||||||
Common Stock Value | $ 44,700 | ||||||||
Common Stock Value Per Share | $ 0.0015 | ||||||||
Consultant 3 | |||||||||
Date of Agreement | Oct. 12, 2017 | ||||||||
Terms of Agreement | 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 September 30, 2018, and (iv) $7,500 on October 31, 2018. | ||||||||
Legal Services Cost | $ 32,500 | ||||||||
Consultant 4 | |||||||||
Date of Agreement | Jul. 1, 2018 | ||||||||
Terms of Agreement | On July 1, 2018 the Company entered into a new engagement with a consultant for a period of one year. Either Consultant or the Company may terminate the agreement at any time and for any reason by giving the other party 5 day notice. In connection with this agreement, the consultant will receive a compensation equal to $120,000 on or before June 30, 2019. No payments have been made as of September 30, 2018 and the amount was accrued. | ||||||||
Legal Services Cost | $ 120,000 |
Litigation (Details Narrative)
Litigation (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 25, 2017 | |
Litigation | ||||
Court Order to Reimburse Defendant | $ 819,626 | $ 819,626 | $ 820,321 | |
Recorded Judgement Payable | $ 819,626 | $ 819,626 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | 3 Months Ended |
Mar. 26, 2019USD ($) | |
Subsequent Events [Abstract] | |
Advance under terms of Line of Credit Agreement | $ 56,351 |