Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 22, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | Jerrick Media Holdings, Inc. | |
Entity Central Index Key | 1,357,671 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 32,781,881 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheet (Unaudited) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Current Assets | ||
Cash | $ 146,274 | $ 438,629 |
Prepaid expenses | 10,000 | |
Total Current Assets | 156,274 | 438,629 |
Property and equipment, net | 93,678 | 70,506 |
Security deposit | 49,775 | 17,000 |
Minority investment in business | 83,333 | 83,333 |
Total Assets | 383,060 | 609,468 |
Current Liabilities | ||
Accounts payable and accrued liabilities | 846,288 | 678,955 |
Accrued dividends | 169,792 | 81,936 |
Accrued liquidating damages | 4,346,490 | |
Current portion of capital lease payable | 3,524 | 3,524 |
Note payable - related party | 849,383 | |
Line of credit | 202,512 | 202,422 |
Total Current Liabilities | 6,417,989 | 966,837 |
Non-current Liabilities: | ||
Capital lease payables | 1,680 | 3,095 |
Total Non-current Liabilities | 1,680 | 3,095 |
Total Liabilities | 6,419,669 | 969,932 |
Commitments and contingencies | ||
Stockholders' Deficit | ||
Common stock par value $0.001: 90,000,000 shares authorized; 31,682,537 and 28,500,000 issued and outstanding as of June 30, 2016 and December 31, 2015 respectively | 31,683 | 28,500 |
Additional paid in capital | 5,776,932 | 5,319,835 |
Accumulated deficit | (11,845,267) | (5,708,839) |
Total Stockholders' Equity | (6,036,609) | (360,464) |
Total Liabilities and Stockholders' Deficit | 383,060 | 609,468 |
Series A Preferred stock | ||
Stockholders' Deficit | ||
Preferred stock value | 33 | 33 |
Series B Preferred stock | ||
Stockholders' Deficit | ||
Preferred stock value | 8 | 7 |
Series D Preferred stock | ||
Stockholders' Deficit | ||
Preferred stock value | $ 2 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheet (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2016 | Dec. 31, 2015 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 90,000,000 | 90,000,000 |
Common stock, shares issued | 31,682,537 | 28,500,000 |
Common stock, shares outstanding | 31,682,537 | 28,500,000 |
Series A Preferred stock | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | 33,314 | 33,314 |
Preferred stock, shares outstanding | 33,314 | 33,314 |
Series B Preferred stock | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | 8,063 | 7,000 |
Preferred stock, shares outstanding | 8,063 | 7,000 |
Series D Preferred stock | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | 2,013 | 0 |
Preferred stock, shares outstanding | 2,013 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Statement [Abstract] | ||||
Net revenue | $ 63,932 | $ 234,128 | $ 184,640 | $ 393,509 |
Cost of revenue | 8,923 | 109,443 | 43,321 | 174,895 |
Gross margin | 55,009 | 124,685 | 141,319 | 218,614 |
Operating expenses | ||||
Compensation | 309,823 | 277,300 | 647,265 | 481,905 |
Consulting fees | 405,889 | 138,512 | 515,007 | 180,752 |
Share based payments | 17,725 | 86,916 | 66,174 | 103,459 |
General and administrative | 338,020 | 226,806 | 547,857 | 377,474 |
Total operating expenses | 1,071,457 | 729,534 | 1,776,303 | 1,143,590 |
Loss from operations | (1,016,448) | (604,849) | (1,634,984) | (924,976) |
Other income (expenses) | ||||
Interest expense | (4,380,434) | (29,045) | (4,413,588) | (56,942) |
Other income (expenses), net | (4,380,434) | (29,045) | (4,413,588) | (56,942) |
Loss before income tax provision | (5,396,882) | (633,894) | (6,048,572) | (981,918) |
Income tax provision | ||||
Net loss | $ (5,396,882) | $ (633,894) | $ (6,048,572) | $ (981,918) |
Per-share data | ||||
Basic and diluted loss per share | $ (0.17) | $ (0.02) | $ (0.20) | $ (0.04) |
Weighted average number of common shares outstanding | 31,682,537 | 27,000,000 | 29,879,099 | 27,000,000 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (6,048,572) | $ (981,918) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 20,784 | 2,804 |
Accretion of debt discount | 40,399 | |
Share-based compensation | 66,174 | 103,459 |
Changes in operating assets and liabilities: | ||
Prepaid expenses | (10,000) | |
Security deposit | (32,775) | |
Accounts payable and accrued expenses | 276,268 | 288,270 |
Accrued liquidating damages | 4,346,490 | |
Net Cash Used In Operating Activities | (1,341,232) | (587,385) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Cash paid for property and equipment | (43,956) | |
Net Cash Used In Investing Activities | (43,956) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayment of loans | (107,415) | (244,331) |
Net proceeds from issuance of notes | 106,000 | |
Net proceeds from issuance of preferred stock | 94,248 | 1,823,000 |
Proceeds from issuance of note payable - related party | 1,000,000 | |
Net Cash Provided By Financing Activities | 1,092,833 | 1,578,669 |
Net Change in Cash | (292,355) | 991,284 |
Cash - Beginning of Period | 438,629 | 125,063 |
Cash - End of Period | 146,274 | 1,116,347 |
Cash Paid During the Period for: | ||
Income taxes | ||
Interest | ||
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Conversion of interest | 108,843 | |
Debt discount on convertible note | 24,425 | |
Debt discount on related party note payable | $ 166,591 |
Organization and Operations
Organization and Operations | 6 Months Ended |
Jun. 30, 2016 | |
Organization and Operations [Abstract] | |
Organization and Operations | Note 1 - Organization and Operations Great Plains Holdings, Inc. (the “Company”) was incorporated under the laws of the state of Nevada on December 30, 1999 under the name LILM, Inc. The Company changed its name on December 3, 2013 as part of its plans to diversify its business through the acquisition and operation of commercial real estate, including but not limited to self-storage facilities, apartment buildings, 55+ senior manufactured homes communities, and other income producing properties. Historically, the Company has principally engaged in manufacture and marketing of the LiL Marc urinal used in the training of young boys, but is changing its focus to residential and commercial rental real estate as well as exploring other business opportunities. On February 5, 2016, Great Plains Holdings, Inc. a Nevada corporation (“GTPH”, or the “Company”), GPH Merger Sub, Inc., a Nevada corporation and wholly-owned subsidiary of GTPH (“Merger Sub”), and Jerrick Ventures, Inc., a privately-held Nevada corporation headquartered in New Jersey (“Jerrick”), entered into an Agreement and Plan of Merger (the “Agreement”) pursuant to which the Merger Sub was merged with and into Jerrick, with Jerrick surviving as a wholly-owned subsidiary of GTPH (the “Merger”). The transaction (the “Closing”) took place on February 5, 2016 (the “Closing Date”). The Company acquired, through a reverse triangular merger, all of the outstanding capital stock of Jerrick in exchange for issuing Jerrick’s shareholders (the “Jerrick Shareholders”), pro-rata, a total of 28,500,000 shares of the Company’s common stock. GTPH shall assume 33,414.89 shares of Jerrick’s Series A Convertible Preferred Stock (the “Series A Preferred”) and 8,063.33 shares of Series B Convertible Preferred Stock (the “Series B Preferred”) and file the appropriate certificates of designation to reflect the rights, preferences and privileges of the Jerrick’s Series A Preferred and Series B Preferred. Jerrick shareholders that hold either Series A Preferred or Series B Preferred will be able to exchange such shares for the equivalent in GTPH on a one for one basis. Additionally, GTPH shall assume 12,391,667 outstanding common stock purchase warrants of Jerrick such that each Jerrick shareholder that holds a warrant to purchase shares of Jerrick common stock will by virtue of the Merger, be able to purchase the equivalent number of shares of GTPH Common Stock under the same terms and conditions. In connection with the Merger, on February 5, 2016, the Company and Kent Campbell entered into a Spin-Off Agreement (the “Spin-Off Agreement”), pursuant to which Mr. Campbell purchased from the Company (i) all of the Company’s interest in Ashland Holdings, LLC, a Florida limited liability company, and (ii) all of the Company’s interest in Lil Marc, Inc., a Utah corporation, in exchange for the cancellation of 781,818 shares of the Parent Company’s Common Stock held by Mr. Campbell. In addition, Mr. Campbell assumed all debts, obligations and liabilities of the Company existing prior to the Merger, pursuant to the terms and conditions of the Spin-Off Agreement. On February 5, 2016 and in conjunction with the Merger, the Company entered into a Share Exchange Agreement with Kent Campbell, Denis Espinoza and Sarah Campbell (the “Exchange Agreement”). Pursuant to the Exchange Agreement, (i) Kent Campbell cancelled 363,636 shares of the Company’s common stock, 6,000 shares of the Company’s Series A Preferred Stock and 10,000 shares of the Company’s Series B Preferred Stock in exchange for 1,648,881 shares of the Company’s Series D Preferred Stock, (ii) Denis Espinoza cancelled 58,951 shares of the Company’s common stock and 4,000 shares of the Company’s Series A Preferred Stock in exchange for 265,676 shares of the Company’s Series D Preferred Stock, and (iii) Sarah Campbell cancelled 21,818 shares of the Company’s common stock in exchange for 98,933 shares of the Company’s Series D Preferred Stock. In connection with the Statutory Merger, the Company changed its name to Jerrick Media Holdings, Inc. Jerrick Ventures, Inc. (“Ventures”) was incorporated on November 24, 2014 under the laws of the State of Nevada. Ventures develops digital transmedia content, including videos, imagery, articles, e-books, as well as traditional film and television, for each brand in its portfolio. Jerrick Ventures, LLC (“Jerrick LLC”) was incorporated in Delaware in 2013. On December 1, 2014, Jerrick LLC entered into a share exchange agreement whereby the members of Jerrick LLC exchanged all of their membership interests in Jerrick LLC for Common Stock in Ventures (the “Jerrick Share Exchange”). As result of the Jerrick Share Exchange, Jerrick LLC became the operating subsidiary of Ventures The Merger is being accounted for as a “Reverse Business Combination,” and Ventures is deemed to be the accounting acquirer in the merger. Consequently, the assets and liabilities and the historical operations that will be reflected in the financial statements prior to the Reverse Business Combination will be those of Ventures, and the consolidated financial statements after completion of the Merger will include the assets and liabilities of Ventures, historical operations of Ventures and combined operations of Ventures and Jerrick Media Holdings, Inc. from the Closing Date of the Merger. The Reverse Business Combination will be treated as a recapitalization of the Company for financial accounting purposes. The historical financial statements of Predecessor before the Reverse Business Combination will be replaced with the historical financial statements of Ventures before the Reverse Business Combination in all future filings with the Securities and Exchange Commission (the “ SEC |
Significant and Critical Accoun
Significant and Critical Accounting Policies and Practices | 6 Months Ended |
Jun. 30, 2016 | |
Significant and Critical Accounting Policies and Practices [Abstract] | |
Significant and Critical Accounting Policies and Practices | Note 2 - Significant and Critical Accounting Policies and Practices Management of the Company is responsible for the selection and use of appropriate accounting policies and the appropriateness of accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below as required by generally accepted accounting principles. Basis of Presentation The Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“ US GAAP SEC The unaudited condensed consolidated financial information furnished herein reflects all adjustments, consisting solely of normal recurring items, which in the opinion of management are necessary to fairly state the financial position of the Company and the results of its operations for the periods presented. This report should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s Information Report on Form 8K/A for the year ended December 31, 2015 filed with the SEC on August 4, 2016. The Company assumes that the users of the interim financial information herein have read or have access to the audited financial statements for the preceding fiscal year and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. Accordingly, footnote disclosure, which would substantially duplicate the disclosure contained in the Company’s Form 8K/A for the year ended December 31, 2015 has been omitted. The results of operations for the interim periods presented are not necessarily indicative of results for the entire year ending December 31, 2016 or any other period. Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Critical accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or operating performance is material. The Company’s critical accounting estimates and assumptions affecting the financial statements were: (i) Assumption as a going concern (ii) Fair value of long-lived assets: (iii) Valuation allowance for deferred tax assets (iv) Estimates and assumptions used in valuation of equity instruments: These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. Principles of consolidation The Company applies the guidance of Topic 810 “ Consolidation ASC The Company's consolidated subsidiaries and/or entities are as follows: Name of combined affiliate State or other jurisdiction of Company interest Castle 6 Productions LLC The State of New Jersey 100 % Filthy Gorgeous LLC The State of Delaware 100 % Geek Room LLC The State of Delaware 100 % Graphic Expression Corporate Collectibles LLC The State of Delaware 100 % Guccione Stores LLC The State of New Jersey 100 % iLongevity LLC The State of New Jersey 100 % JAJ Enterprises LLC The State of Delaware 100 % Jerrick Ventures INC The State of Nevada 100 % Miss Filthy LLC The State of Delaware 100 % Next Geek Thing LLC The State of Delaware 100 % No One’s Pet LLC The State of New Jersey 100 % OMNI Reboot LLC The State of Delaware 100 % Romper Zombie LLC The State of Delaware 100 % Steam Wars LLC The State of Delaware 100 % All inter-company balances and transactions have been eliminated. Fair Value of Financial Instruments The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in U.S. GAAP, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below: Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally observable inputs and not corroborated by market data. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses, accounts payable and accrued liabilities and accrued liquidating damages approximate their fair value because of the short maturity of those instruments. Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated. Fair Value of Non-Financial Assets or Liabilities Measured on a Recurring Basis The Company’s non-financial assets include inventory. The Company identifies potentially excess and slow-moving inventory by evaluating turn rates, inventory levels and other factors. Excess quantities are identified through evaluation of inventory aging, review of inventory turns and historical sales experiences. The Company provides lower of cost or market reserves for such identified excess and slow-moving inventories. The Company establishes a reserve for inventory shrinkage, if any, based on the historical results of physical inventory cycle counts. Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Inventories Inventory Valuation The Company values inventory, entirely consisting of finished goods, at the lower of cost or market. Cost is determined on the first-in and first-out (“FIFO”) method. The Company reduces inventory for the diminution of value, resulting from product obsolescence, damage or other issues affecting marketability, equal to the difference between the cost of the inventory and its estimated market value. Factors utilized in the determination of estimated market value include: (i) current sales data and historical return rates, (ii) estimates of future demand, and (iii) competitive pricing pressures. Inventory Obsolescence and Markdowns The Company evaluates its current level of inventory considering historical sales and other factors and, based on this evaluation, classify inventory markdowns in the income statement as a component of cost of goods sold pursuant to Paragraph 420-10-S99 of the FASB Accounting Standards Codification to adjust inventory to net realizable value. These markdowns are estimates, which could vary significantly from actual requirements if future economic conditions, customer demand or competition differ from expectations. The Company recorded a markdown of $0 and $21,861 as of June 30, 2016 and December 31, 2015 due to slow moving inventory. There was no lower of cost or market adjustments for the reporting period ended June 30, 2016 or December 31, 2015. Property and Equipment Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives of the respective assets as follows: Estimated Useful Computer equipment and software 3 Furniture and fixture 5 Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statements of operations. Investments - Cost Method, Equity Method and Joint Venture The Company accounts for marketable debt and equity securities, available for sale, in accordance with sub-topic 320-10 of the FASB Accounting Standards Codification (“Sub-topic 320-10”). Pursuant to Paragraph 320-10-35-1, investments in debt securities that are classified as available for sale and equity securities that have readily determinable fair values that are classified as available for sale shall be measured subsequently at fair value in the consolidated balance sheets at each balance sheet date. Unrealized holding gains and losses for available-for-sale securities (including those classified as current assets) shall be excluded from earnings and reported in other comprehensive income until realized except an available-for-sale security that is designated as being hedged in a fair value hedge, from which all or a portion of the unrealized holding gain and loss of shall be recognized in earnings during the period of the hedge, pursuant to paragraphs 815-25-35-1 through 815-25-35-4. The Company follows Paragraphs 320-10-35-17 through 320-10-35-34E and assess whether an investment is impaired in each reporting period. An investment is impaired if the fair value of the investment is less than its cost. Impairment indicators include, but are not limited to the following: a. a significant deterioration in the earnings performance, credit rating, asset quality, or business prospects of the investee; b. a significant adverse change in the regulatory, economic, or technological environment of the investee; c. a significant adverse change in the general market condition of either the geographic area or the industry in which the investee operates; d. a bona fide offer to purchase (whether solicited or unsolicited), an offer by the investee to sell, or a completed auction process for the same or similar security for an amount less than the cost of the investment; e. factors that raise significant concerns about the investee's ability to continue as a going concern, such as negative cash flows from operations, working capital deficiencies, or noncompliance with statutory capital requirements or debt covenants. If the fair value of an investment is less than its cost basis at the balance sheet date of the reporting period for which impairment is assessed, the impairment is either temporary or other than temporary. Pursuant to Paragraph 320-10-35-34, if it is determined that the impairment is other than temporary, then an impairment loss shall be recognized in earnings equal to the entire difference between the investment’s cost and its fair value at the balance sheet date of the reporting period for which the assessment is made. The measurement of the impairment shall not include partial recoveries after the balance sheet date. The fair value of the investment would then become the new basis of the investment and shall not be adjusted for subsequent recoveries in fair value. For presentation purpose, the entity shall present the total other-than-temporary impairment in the statement of earnings with an offset for the amount of the total other-than-temporary impairment that is recognized in other comprehensive income, in accordance with paragraph 320-10-35-34D, if any, pursuant to Paragraph 320-10-45-8A; and separately present, in the financial statement in which the components of accumulated other comprehensive income are reported, amounts recognized therein related to held-to-maturity and available-for-sale debt securities for which a portion of an other-than-temporary impairment has been recognized in earnings pursuant to Paragraph 320-10-45-9A. Pursuant to Paragraphs 320-10-35-36 and 37 the entire change in the fair value of foreign-currency-denominated available-for-sale debt securities shall be reported in other comprehensive income and An entity holding a foreign-currency-denominated available-for-sale debt security is required to consider, among other things, changes in market interest rates and foreign exchange rates since acquisition in determining whether an other-than-temporary impairment has occurred. Pursuant to FASB ASC Paragraph 320-10-50-2, the entity shall disclose all of the following by major security type as of each date for which a statement of financial position is presented: a. cost basis (net of amortization of debt discount for debt securities), aggregate fair value, total other-than-temporary impairment recognized in accumulated other comprehensive income; b. Total gains for securities with net gains in accumulated other comprehensive income; c. Total losses for securities with net losses in accumulated other comprehensive income; and d. Information about the contractual maturities of those securities as of the date of the most recent statement of financial position presented. On January 2, 2013, the Company purchased a minority interest in a business for proceeds of $83,333. The interest is accounted for under the cost method. The Company tests the carrying value annual for impairment. As of June 30, 2016, no impairment charges have been recognized on the minority interest. Related Parties The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20 FASB Accounting Standards, the related parties include (a.) affiliates of the Company (“Affiliate” means, with respect to any specified Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act); (b.) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15 FASB Accounting Standards, to be accounted for by the equity method by the investing entity; (c.) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d.) principal owners of the Company and members of their immediate families; (e.) management of the Company and members of their immediate families; (f.) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g.) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. Pursuant to ASC Paragraphs 850-10-50-1 and 50-5 financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. The disclosures shall include: (a.) the nature of the relationship(s) involved; (b.) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c.) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d.) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated. Commitments and Contingencies The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Revenue Recognition The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. Stock-Based Compensation for Obtaining Employee Services The Company accounts for share-based payment transactions issued to employees under the guidance of the Topic 718 “ Compensation—Stock Compensation” Pursuant to ASC Section 718-10-20 an employee is an individual over whom the grantor of a share-based compensation award exercises or has the right to exercise sufficient control to establish an employer-employee relationship based on common law as illustrated in case law and currently under U.S. Internal Revenue Service (“IRS”) Revenue Ruling 87-41. A non-employee director does not satisfy this definition of employee. Nevertheless, non-employee directors acting in their role as members of a board of directors are treated as employees if those directors were elected by the employer’s shareholders or appointed to a board position that will be filled by shareholder election when the existing term expires. However, that requirement applies only to awards granted to non-employee directors for their services as directors. Awards granted to non-employee directors for other services shall be accounted for as awards to non-employees. Pursuant to ASC Paragraphs 718-10-30-2 and 718-10-30-3 a share-based payment transaction with employees shall be measured based on the fair value of the equity instruments issued and an entity shall account for the compensation cost from share-based payment transactions with employees in accordance with the fair value-based method, i.e., the cost of services received from employees in exchange for awards of share-based compensation generally shall be measured based on the grant-date fair value of the equity instruments issued or the fair value of the liabilities incurred/settled. Pursuant to ASC Paragraphs 718-10-30-6 and 718-10-30-9 the measurement objective for equity instruments awarded to employees is to estimate the fair value at the grant date of the equity instruments that the entity is obligated to issue when employees have rendered the requisite service and satisfied any other conditions necessary to earn the right to benefit from the instruments (for example, to exercise share options). That estimate is based on the share price and other pertinent factors, such as expected volatility, at the grant date. As such, the fair value of an equity share option or similar instrument shall be estimated using a valuation technique such as an option pricing model. For this purpose, a similar instrument is one whose fair value differs from its intrinsic value, that is, an instrument that has time value. If the Company’s common shares are traded in one of the national exchanges, the grant-date share price of the Company’s common stock will be used to measure the fair value of the common shares issued, however, if the Company’s common shares are thinly traded the use of share prices established in its most recent private placement memorandum (“PPM”), or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market. Pursuant to ASC Paragraph 718-10-55-21 if an observable market price is not available for a share option or similar instrument with the same or similar terms and conditions, an entity shall estimate the fair value of that instrument using a valuation technique or model that meets the requirements in paragraph 718-10-55-11 and takes into account, at a minimum, all of the following factors: a. The exercise price of the option. b. The expected term of the option, taking into account both the contractual term of the option and the effects of employees’ expected exercise and post-vesting employment termination behavior: The expected life of options and similar instruments represents the period of time the option and/or warrant are expected to be outstanding. Pursuant to paragraph 718-10-S99-1, it may be appropriate to use the simplified method i.e., expected term = ((vesting term + original contractual term) / 2) c. The current price of the underlying share. d. The expected volatility of the price of the underlying share for the expected term of the option. Pursuant to ASC Paragraph 718-10-55-25 a newly publicly traded entity might base expectations about future volatility on the average volatilities of similar entities for an appropriate period following their going public. A nonpublic entity might base its expected volatility on the average volatilities of otherwise similar public entities. For purposes of identifying otherwise similar entities, an entity would likely consider characteristics such as industry, stage of life cycle, size, and financial leverage. Because of the effects of diversification that are present in an industry sector index, the volatility of an index should not be substituted for the average of volatilities of otherwise similar entities in a fair value measurement. Pursuant to paragraph 718-10-S99-1 if shares of a company are thinly traded the use of weekly or monthly price observations would generally be more appropriate than the use of daily price observations as the volatility calculation using daily observations for such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market. The Company uses the average historical volatility of the comparable companies over the expected term of the share options or similar instruments as its expected volatility. e. The expected dividends on the underlying share for the expected term of the option. The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the expected term of the share options and similar instruments. f. The risk-free interest rate(s) for the expected term of the option. Pursuant to ASC 718-10-55-28 a U.S. entity issuing an option on its own shares must use as the risk-free interest rates the implied yields currently available from the U.S. Treasury zero-coupon yield curve over the contractual term of the option if the entity is using a lattice model incorporating the option’s contractual term. If the entity is using a closed-form model, the risk-free interest rate is the implied yield currently available on U.S. Treasury zero-coupon issues with a remaining term equal to the expected term used as the assumption in the model. Pursuant to ASC Paragraphs 718-10-30-11 and 718-10-30-17 a restriction that stems from the forfeitability of instruments to which employees have not yet earned the right, such as the inability either to exercise a non-vested equity share option or to sell non-vested shares, is not reflected in estimating the fair value of the related instruments at the grant date. Instead, those restrictions are taken into account by recognizing compensation cost only for awards for which employees render the requisite service and a non-vested equity share or non-vested equity share unit awarded to an employee shall be measured at its fair value as if it were vested and issued on the grant date. Pursuant to ASC Paragraphs 718-10-35-2 and 718-10-35-3 the compensation cost for an award of share-based employee compensation classified as equity shall be recognized over the requisite service period, with a corresponding credit to equity (generally, paid-in capital). The requisite service period is the period during which an employee is required to provide service in exchange for an award, which often is the vesting period. The total amount of compensation cost recognized at the end of the requisite service period for an award of share-based compensation shall be based on the number of instruments for which the requisite service has been rendered (that is, for which the requisite service period has been completed). An entity shall base initial accruals of compensation cost on the estimated number of instruments for which the requisite service is expected to be rendered. That estimate shall be revised if subsequent information indicates that the actual number of instruments is likely to differ from previous estimates. The cumulative effect on current and prior periods of a change in the estimated number of instruments for which the requisite service is expected to be or has been rendered shall be recognized in compensation cost in the period of the change. Previously recognized compensation cost shall not be reversed if an employee share option (or share unit) for which the requisite service has been rendered expires unexercised (or unconverted). Under the requirement of ASC Paragraph 718-10-35-8 the Company made a policy decision to recognize compensation cost for an award with only service conditions that has a graded vesting schedule on a straight-line basis over the requisite service period for the entire award. Equity Instruments Issued to Parties Other Than Employees for Acquiring Goods or Services The Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under the guidance of Sub-topic 505-50 of the FASB Accounting Standards Codification (“Sub-topic 505-50”). Pursuant to ASC paragraphs 505-50-25-6 and 505-50-25-7, a grantor shall recognize the goods acquired or services received in a share-based payment transaction when it obtains the goods or as services are received. A grantor may need to recognize an asset before it actually receives goods or services if it first exchanges share-based payment for an enforceable right to receive those goods or services. Nevertheless, the goods or services themselves are not recognized before they are received. If fully vested, nonforfeitable equity instruments are issued at the date the grantor and grantee enter into an agreement for goods or services (no specific performance is required by the grantee to retain those equity instruments), then, because of the elimination of any obligation on the part of the counterparty to earn the equity instruments, a measurement date has been reached. A grantor shall recognize the equity instruments when they are issued (in most cases, when the agreement is entered into). Pursuant to ASC paragraph 505-50-45-1, a grantor may conclude that an asset (other than a note or a receivable) has been received in return for fully vested, nonforfeitable equity instruments that are issued at the date the grantor and grantee enter into an agreement for goods or services (and no specific performance is required by the grantee in order to retain those equity instruments). Such an asset shall not be displayed as contra-equity by the grantor of the equity instruments. The transferability (or lack thereof) of the equity instruments shall not affect the balance sheet display of the asset. This guidance is limited to transactions in which equity instruments are transferred to other than employees in exchange for goods or services. Pursuant to Paragraphs 505-50-25-8 and 505-50-25-9, an entity may grant fully vested, non-forfeitable equity instruments that are exercisable by the grantee only after a specified period of time if the terms of the agreement provide for earlier exercisability if the grantee achieves specified performance conditions. Any measured cost of the transaction shall be recognized in the same period(s) and in the same manner as if the entity had paid cash for the goods or services or used cash rebates |
Going Concern
Going Concern | 6 Months Ended |
Jun. 30, 2016 | |
Going Concern [Abstract] | |
Going Concern | Note 3 – Going Concern The Company has elected to adopt early application of Accounting Standards Update No. 2014-15, “Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”) The Company's condensed consolidated financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflected in the condensed consolidated financial statements, the Company had an accumulated deficit at June 30, 2016, a net loss and net cash used in operating activities for the reporting period then ended. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company is attempting to further implement its business plan and generate sufficient revenues; however, its cash position may not be sufficient to support its daily operations. While the Company believes in the viability of its strategy to further implement its business plan and generate sufficient revenues and in its ability to raise additional funds by way of a public or private offering, there can be no assurance to that effect. The ability of the Company to continue as a going concern is dependent upon its ability to further implement its business plan and generate sufficient revenues and its ability to raise additional funds by way of a public or private offering. The consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2016 | |
Property and Equipment [Abstract] | |
Property and Equipment | Note 4 – Property and Equipment Property and equipment stated at cost, less accumulated depreciation and amortization, consisted of the following: June 30, December 31, Computer Equipment $ 219,653 175,695 Furniture and Fixtures 61,803 61,803 281,456 237,498 Less: Accumulated Depreciation (187,778 ) (166,992 ) $ 93,678 $ 70,506 Depreciation expense was $10,812 and $1,409 for the three months ended June 30, 2016 and 2015, respectively. Depreciation expense was $20,784 and $2,804 for the six months ended June 30, 2016 and 2015, respectively. |
Line of Credit
Line of Credit | 6 Months Ended |
Jun. 30, 2016 | |
Line of Credit and Convertible Note Payable [Abstract] | |
Line of Credit | Note 5 – Line of Credit On March 19, 2009 Astoria Surgical Supplies North LLC signed a revolving note (the “Note”) at PNC Bank (the “Bank”). The outstanding balance of this Note is limited to $200,000 and expired March 19, 2010. The outstanding balance accrues interest at a variable rate of 4.50%. The interest rate is subject to change based on changes in an independent index which is the highest Prime Rate as published in the “Money Rates” section of the Wall Street Journal. Interest is payable monthly and the rate as of June 30, 2016 and 2015 was 3.50% and 4.25%, respectively. The Company has been in payment default since March 19, 2010. The Company does not believe it is probable that the loan will be called or that the interest rate shall be increased to the default interest rate due to the fact that the Company is current and has been current since the maturity date with its monthly installment payment obligation. The balance outstanding on the revolving note at June 30, 2016 and December 31, 2015 was $202,512 and $202,422, respectively. |
Convertible Note Payable
Convertible Note Payable | 6 Months Ended |
Jun. 30, 2016 | |
Line of Credit and Convertible Note Payable [Abstract] | |
Convertible Note Payable | Note 6 – Convertible Note Payable On December 2, 2015, the Company issued a convertible note to a third party lender totaling $100,000. The note accrues interest at 12% per annum and matures with interest and principal both due on December 1, 2016. In addition the Company issued a warrant to purchase 300,000 shares of Company common stock. The note and accrued interest are convertible at a conversion price of $0.35 per share subject to adjustment. The warrant entitles the holder to purchase the Company’s common stock at a purchase price of $0.35 per share for a period of five years from the issue date. On December 21, 2015, the notes were automatically converted into Series B preferred stock. On March 17, 2016, the Company issued a convertible note to a third party lender totaling $200,000. The note accrues interest at 12% per annum and matures with interest and principal both due on April 21, 2016. In addition the Company issued a warrant to purchase 150,000 shares of Company common stock. The note and accrued interest are convertible at a conversion price as defined. The warrant entitles the holder to purchase the Company’s common stock at a purchase price of $0.40 per share for a period of five years from the issue date. On May 27, 2016, the notes and accrued interest were paid off in full satisfaction. |
Related Party Loan
Related Party Loan | 6 Months Ended |
Jun. 30, 2016 | |
Related Party Loan [Abstract] | |
Related Party Loan | Note 7 – Related Party Loan On May 26, 2016, the Company entered into a loan agreement (the “Loan Agreement”) with Arthur Rosen, an individual (the “Lender”), pursuant to which on May 26, 2016 (the “Closing Date”), the Lender issued the Company a secured term loan of $1,000,000 (the “Loan”). In connection with the Loan Agreement, on May 26, 2016, the Company and Lender entered into a security agreement (the “Security Agreement”), pursuant to which the Company granted to Lender a senior security interest in substantially all of the Company’s assets as security for repayment of the Loan. The maturity date of the Loan is May 26, 2017 (the “Maturity Date”). Pursuant to the Loan Agreement, the Loan bears interest at a rate of 12.5% per annum, compounded annually and payable on the Maturity Date. All outstanding principal, accrued and unpaid interest and other amounts due under the Loan are due on the Maturity Date. As additional consideration for entering in the Loan Agreement, the Company issued Lender a warrant to purchase 1,000,000 shares of the Company’s common stock with an exercise price of $0.40 per share (the “Warrant”). The Warrant has a term of five (5) years and contains anti-dilution provisions as further described therein. |
Capital Leases Payable
Capital Leases Payable | 6 Months Ended |
Jun. 30, 2016 | |
Capital Leases Payable [Abstract] | |
Capital Leases Payable | Note 8 – Capital Leases Payable Capital lease obligation consisted of the following: June 30, December 31, (i) Capital lease obligation to a financing company for a term of five (5) years, collateralized by equipment, with interest at 10.0% per annum, with principal and interest due and payable in monthly installments of $383.10 $ 5,204 $ 6,619 Less current maturities (3,524 ) (3,524 ) Capital lease obligation, net of current maturities 1,680 3,095 TOTAL CAPITAL LEASE OBLIGATION $ 5,204 $ 6,619 The capital leases mature as follows: 2016: $ 3,095 2017: $ 2,109 |
Stockholders' Deficit
Stockholders' Deficit | 6 Months Ended |
Jun. 30, 2016 | |
Stockholders' Deficit [Abstract] | |
Stockholders' Deficit | Note 9 - Stockholders’ Deficit Shares Authorized Upon incorporation, the total number of shares of all classes of stock which the Company is authorized to issue is One Hundred Million (100,000,000) shares of which Ninety Million (90,000,000) shares shall be Common Stock, par value $.001 per share and Ten Million (10,000,000) shall be Preferred Stock, par value $.001 per share. The designations, rights, and preferences of such preferred stock are to be determined by the Board of Directors. Preferred Stock Series A Cumulative Convertible Preferred Stock On February 13, 2015, 100,000 shares of preferred stock were designated as Series A Cumulative Convertible Preferred Stock (“Series A”). Each share of Series A shall have a stated value equal to $100.00 (as adjusted for any stock dividends, combinations or splits with respect to such shares) (the "Series A Stated Value"). During the year ended December 31, 2015, the Company sold 24,400 shares of Series A for proceeds of $2,450,000. In addition, $800,000 in convertible notes and $91,400 in accrued interest were converted into 8,914 shares of the Company’s Series A. The holders of the Series A shall be entitled to receive preferential dividends at the rate of 6% per share per annum on the Series A Stated Value, but before any dividend or other distribution will be paid or declared and set apart for payment on any shares of any Junior Stock, as defined. Such dividends shall compound annually and be fully cumulative, and shall accumulate from the date of original issuance of the Series A and shall be payable quarterly, in arrears, commencing on the first day of the calendar quarter following the date on which the Series A is issued. Upon the occurrence of an Event of Default (as defined below) and while such Event of Default is outstanding, such dividend rate shall be increased to 15% per annum on the Series A Stated Value. At the Company's option, such dividend payments may be made in (i) cash (ii) additional shares of Series A valued at the Series A Stated Value thereof, in an amount equal to 150% of the cash dividend otherwise payable or (iii) a combination of cash and additional shares of Series A, provided there is not an existing current Event of Default on the date on which a dividend payment is payable, in which event the Holder entitled to receive such dividend may elect to receive such dividends in cash or additional shares of Series A Preferred. The dividends on the Series A shall be cumulative whether or not declared so that, if at any time full cumulative dividends at the rate aforesaid on all shares of the Series A then outstanding from the date from and after which dividends thereon are cumulative to the end of the annual dividend period next preceding such time shall not have been paid or declared and set apart for payment, or if the full dividend on all such outstanding Series A for the then current dividend period shall not have been paid or declared and set apart for payment, the amount of the deficiency shall be paid or declared and set apart for payment before any sum shall be set apart for or applied by the Corporation or a subsidiary of the Corporation to the purchase, redemption or other acquisition of the Series A or any shares of any other class of stock ranking on a parity with the Series A and before any dividend or other distribution shall be paid or declared and set apart for payment on any Junior Stock and before any sum shall be set aside for or applied to the purchase, redemption or other acquisition of any Junior Stock. Holder of Series A shall have the right at any time after the issuance, to convert such shares, accrued but unpaid declared dividends on the Series A and any other sum owed by the Corporation arising from the Series A into fully paid and non-assessable shares of Common Stock (the "Conversion Shares") of the Corporation determined in accordance with the applicable conversion price (the "Conversion Price"). The number of Conversion Shares issuable upon conversion shall equal (i) the sum of (A) the Series A Stated Value being converted and/or (B) at the Holder's election, accrued and unpaid dividends or any other component of the Conversion Amount, divided by (ii) the Conversion Price. The Conversion Price of the Series A shall be $0.25, subject to adjustment. The Corporation and the Holder may not convert that amount of the Conversion Amount on a Conversion Date in amounts that would result in the Holder having a beneficial ownership of Common Stock which would be in excess of the sum of (i) the number of shares of Common Stock beneficially owned by the Holder and its Affiliates on such Conversion Date, and (ii) the number of Conversion Shares issuable upon the conversion of the Conversion Amount with respect to which the determination of this proviso is being made on such Conversion Date, which would result in the aggregate beneficial ownership by the Holder and its Affiliates of more than 4.99% of the outstanding shares of Common Stock of the Corporation. For the purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the 1934 Act and Regulation 13d-3 thereunder. Subject to the foregoing, the Holder shall not be limited to successive exercises which would result in the aggregate issuance of more than 4.99%. The Holder may allocate which of the equity of the Corporation deemed beneficially owned by the Holder shall be included in the 4.99% amount described above and which shall be allocated to the excess above 4.99%. The Holder may waive the conversion limitation described in this Section in whole or in part, upon and effective after sixty one (61) days' prior written notice to the Corporation. The holders of our Series A do vote together with the holders of our Common Stock on an as converted basis on each matter submitted to a vote of holders of Common Stock. The number of votes that may be cast by a holder of Series A shall be equal to the number of shares of Common Stock issuable upon conversion of such Holder's Series A on the record date for determining those stockholders entitled to vote on the matter. In addition, the affirmative vote of the holders of a majority of our outstanding Series A is required to for the following actions: (a) amending the Corporation's certificate of incorporation or by-laws if such amendment would adversely affect the Series A (b) purchasing any of the Corporation's securities other than required redemptions of Series A and repurchase under restricted stock and option agreements authorizing the Corporation's employees; (c) effecting a Liquidation Event; (d) declaring or paying any dividends other than in respect of the Series A; and (e) issuing any additional securities having rights senior to or on parity with the Series A. During the six months ended June 30, 2016, the Company accrued $3,318,353 for liquidating damages on the Series A and $309,665 on the warrants associated with the Series A. Series B Cumulative Convertible Preferred Stock On December 21, 2015, 20,000 shares of preferred stock were designated as Series B Cumulative Convertible Preferred Stock (“Series B”). Each share of Series B shall have a stated value equal to $100.00 (as adjusted for any stock dividends, combinations or splits with respect to such shares) (the "Series B Stated Value"). During the year ended December 31, 2015, the Company sold 7,000 shares of Series B for proceeds of $700,000. The holders of outstanding shares of Series B shall be entitled to receive preferential dividends at the rate of 6% per share per annum on the Series B Stated Value, but before any dividend or other distribution will be paid or declared and set apart for payment on any shares of any Junior Stock as defined. Such dividends shall compound annually and be fully cumulative, and shall accumulate from the date of original issuance of the Series B, and shall be payable quarterly, in arrears, commencing on the first day of the calendar quarter following the date on which the Series B is issued. Upon the occurrence of an Event of Default as defined below and while such Event of Default is outstanding, such dividend rate shall be increased to 15% per annum on the Series B Stated Value. At the Corporation's option, such dividend payments may be made in (i) cash (ii) additional shares of Series B valued at the Series B Stated Value thereof, in an amount equal to 100% of the cash dividend otherwise payable or (iii) a combination of cash and additional shares of Series B, provided there is not an existing current Event of Default on the date on which a dividend payment is payable, in which event the Holder entitled to receive such dividend may elect to receive such dividends in cash or additional shares of Series B Preferred. The dividends on the Series B shall be cumulative whether or not declared so that, if at any time full cumulative dividends at the rate aforesaid on all shares of the Series B then outstanding from the date from and after which dividends thereon are cumulative to the end of the annual dividend period next preceding such time shall not have been paid or declared and set apart for payment, or if the full dividend on all such outstanding Series B for the then current dividend period shall not have been paid or declared and set apart for payment, the amount of the deficiency shall be paid or declared and set apart for payment before any sum shall be set apart for or applied by the Corporation or a subsidiary of the Corporation to the purchase, redemption or other acquisition of the Series B or any shares of any other class of stock ranking on a parity with the Series B and before any dividend or other distribution shall be paid or declared and set apart for payment on any Junior Stock and before any sum shall be set aside for or applied to the purchase, redemption or other acquisition of any Junior Stock. Holders of shares of Series B shall have the right at any time commencing after the issuance to convert such shares, accrued but unpaid declared dividends on the Series B into fully paid and non-assessable shares of Common Stock (the "Conversion Shares") of the Corporation determined in accordance with the applicable conversion price (the "Conversion Price"). All declared or accrued but unpaid dividends may be converted at the election of the Holder together with or independent of the conversion of the Series B Stated Value of the Series B. The number of Conversion Shares issuable upon conversion of the Conversion Amount shall equal (i) the sum of (A) the Series B Stated Value being converted and/or (B) at the Holder's election, accrued and unpaid dividends or any other component of the Conversion Amount, divided by (ii) the Conversion Price. The Conversion Price of the Series B shall be $0.30, subject to adjustment. The Corporation and the Holder may not convert that amount of the Conversion Amount on a Conversion Date in amounts that would result in the Holder having a beneficial ownership of Common Stock which would be in excess of the sum of (i) the number of shares of Common Stock beneficially owned by the Holder and its Affiliates on such Conversion Date, and (ii) the number of Conversion Shares issuable upon the conversion of the Conversion Amount with respect to which the determination of this proviso is being made on such Conversion Date, which would result in the aggregate beneficial ownership by the Holder and its Affiliates of more than 4.99% of the outstanding shares of Common Stock of the Corporation. For the purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the 1934 Act and Regulation 13d-3 thereunder. Subject to the foregoing, the Holder shall not be limited to successive exercises which would result in the aggregate issuance of more than 4.99%. The Holder may allocate which of the equity of the Corporation deemed beneficially owned by the Holder shall be included in the 4.99% amount described above and which shall be allocated to the excess above 4.99%. The Holder may waive the conversion limitation described in this Section in whole or in part, upon and effective after sixty one (61) days' prior written notice to the Corporation. The holders of our Series B do vote together with the holders of our Common Stock on an as converted basis on each matter submitted to a vote of holders of Common Stock. The number of votes that may be cast by a holder of Series B shall be equal to the number of shares of Common Stock issuable upon conversion of such Holder's Series B on the record date for determining those stockholders entitled to vote on the matter. In addition, the affirmative vote of the holders of a majority of our outstanding Series B is required to for the following actions: (a) amending the Corporation's certificate of incorporation or by-laws if such amendment would adversely affect the Series B (b) purchasing any of the Corporation's securities other than required redemptions of Series B and repurchase under restricted stock and option agreements authorizing the Corporation's employees; (c) effecting a Liquidation Event; (d) declaring or paying any dividends other than in respect of the Company's Series A or Series B; and (e) issuing any additional securities having rights senior to the Series B. During the six months ended June 30, 2016, the Company accrued $667,313 for liquidating damages on the Series B and $51,159 on the warrants associated with the Series B. Common Stock During the year ended December 31, 2015, the Company awarded various employees, consultants and advisors 1,500,000 shares of common stock for services rendered. The Company recorded the shares based on the estimated fair value of the Company’s common stock at issuance ($0.25/per share). The Company recorded $375,000 in compensation expense. On February 1, 2016, the Company issued 268,333 shares of its restricted common stock to its Placement Agent. Such shares were issued pursuant to a Placement Agent Agreement with the Company and services rendered in connection with a private placement of the Company’s securities. On February 6, 2016, the Company entered into Stock Purchase Agreements (the “Purchase Agreements”) with three investors providing for the issuance and sale of an aggregate of 2,626,308 shares of the Company’s common stock, par value $0.001 per share, for an aggregate purchase price of $2,626. Warrants The Company applied fair value accounting for all share based payments awards. The fair value of each warrant granted is estimated on the date of grant using the Black-Scholes option-pricing model. The assumptions used for warrants granted during the six months ended June 30, 2016 are as follows: Exercise price $ 0.40 Expected dividends 0 % Expected volatility 73.44 % Risk free interest rate 1.39 % Expected life of warrant 5 years Warrant Activities The following is a summary of the Company’s warrant activity: Warrants Weighted Average Exercise Price Outstanding – December 31, 2015 10,750,000 $ 0.35 Granted 2,791,667 $ 0.40 Exercised - $ - Forfeited/Cancelled - $ - Outstanding – June 30, 2016 13,541,667 $ 0.36 Exercisable – June 30, 2016 12,958,334 $ 0.36 Warrants Outstanding Warrants Exercisable Exercise price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Weighted Average Exercise Price $ 0.35 – 0.40 13,541667 4.14 $ 0.36 12,958,334 $ 0.36 Stock Options The Company applied fair value accounting for all share based payments awards. The fair value of each option granted is estimated on the date of grant using the Black-Scholes option-pricing model. The assumptions used for options granted during the six months ended June 30, 2016 are as follows: Exercise price $ 0.25 Expected dividends 0 % Expected volatility 73.44 % Risk free interest rate 1.39 % Expected life of option 4.68 years The following is a summary of the Company’s stock option activity: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Balance – December 31, 2015 – outstanding 500,000 0.25 4.93 - Balance – December 31, 2015 – exercisable 500,000 $ 0.25 4.93 $ - Outstanding options held by related party – December 31, 2015 500,000 $ 0.25 4.93 $ - Exercisable options held by related party – December 31, 2015 500,000 $ 0.25 4.93 $ - Balance – December 31, 2015 500,000 $ 0.25 4.68 $ - Granted 50,000 0.25 4.68 - Exercised - Cancelled/Modified - Balance – June 30, 2016 – outstanding 550,000 $ 0.25 4.18 - Balance – June 30, 2016 – exercisable 550,000 $ 0.25 4.18 $ - Outstanding options held by related party – June 30, 2016 550,000 $ 0.25 4.18 $ - Exercisable options held by related party – June 30, 2016 550,000 $ 0.25 4.18 $ - The following is a summary of the Company’s stock options granted during the six months ended June 30, 2016: Options Value Purpose for Grant 550,000 $ 101,285 Board Services Stock Incentive Plan On December 9, 2015, Jerrick adopted the 2015 Stock Incentive and Award Plan (the “Plan”) which will provide for the issuance of up to 18,000,000 shares of the Company’s Common Stock. The purpose of the Plan is to provide additional incentive to those officers, employees, consultants and non-employee directors of the Company and its parents, subsidiaries and affiliates whose contributions are essential to the growth and success of the Company’s business. Eligible recipients of option awards are employees, officers, consultants or directors (including non-employee directors) of the Company or of any parent, subsidiary or affiliate of the Company. Upon recommendation from the Compensation Committee, the board has the authority to grant to any eligible recipient any options, restricted stock or other awards valued in whole or in part by reference to, or otherwise based on, our Common Stock. The provisions of each option granted need not be the same with respect to each option recipient. Option recipients shall enter into award agreements with us, in such form as the board shall determine. The Plan shall be administered by the Compensation Committee consisting of two or more independent, non-employee and outside directors. In the absence of such a Committee, the Board of the Company shall administer the Plan. Each Option shall contain the following material terms: (i) the purchase price of each share of Common Stock with respect to Incentive Options shall be determined by the Committee at the time of grant, shall not be less than 100% of the Fair Market Value (defined as the closing price on the final trading day immediately prior to the grant on the principal exchange or quotation system on which the Common Stock is listed or quoted, as applicable) of the Common Stock of the Jerrick, provided (ii) The purchase price of each share of Common Stock purchasable under a Non-qualified Option shall be at least 100% of the Fair Market Value of such share of Common Stock on the date the Non-qualified Option is granted, unless (iii) the term of each Option shall be fixed by the Committee, provided provided further (iv) subject to acceleration in the event of a Change of Control of the Jerrick (as further described in the Plan), the period during which the Options vest shall be designated by the Committee or, in the absence of any Option vesting periods designated by the Committee at the time of grant, shall vest and become exercisable in equal amounts on each fiscal quarter of the Jerrick through the four (4) year anniversary of the date on which the Option was granted; (vi) no Option is transferable and each is exercisable only by the recipient of such Option except in the event of the death of the recipient; and (vii) with respect to Incentive Options, the aggregate Fair Market Value of Common Stock exercisable for the first time during any calendar year shall not exceed $100,000. Each award of Restricted Stock is subject to the following material terms: (i) no rights to an award of Restricted Stock are granted to the intended recipient of Restricted Stock unless and until the grant of Restricted Stock is accepted within the period prescribed by the Compensation Committee; (ii) Restricted Stock shall not be delivered until they are free of any restrictions specified by the Compensation Committee at the time of grant; (iii) recipients of Restricted Stock have the rights of a stockholder of the Jerrick as of the date of the grant of the Restricted Stock; (iv) shares of Restricted Stock are forfeitable until the terms of the Restricted Stock grant have been satisfied or the employment with the Company is terminated; and (v) the Restricted Stock is not transferable until the date on which the Compensation Committee has specified such restrictions have lapsed. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 10 - Subsequent Events The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued to determine if they must be reported. On August 17, 2016, the Company entered into a subscription agreement (the “Subscription Agreement”) with an accredited investor for the sale of 666,666 shares of the Company’s common stock (the “Shares”) and warrants to purchase 333,333 shares of the Company’s common stock (the “Warrant”) for a purchase price of $250,000. The Warrant is exercisable at any and has a five year term. The Warrant is exercisable at price of $0.40 per share. |
Significant and Critical Acco16
Significant and Critical Accounting Policies and Practices (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Significant and Critical Accounting Policies and Practices [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“ US GAAP SEC The unaudited condensed consolidated financial information furnished herein reflects all adjustments, consisting solely of normal recurring items, which in the opinion of management are necessary to fairly state the financial position of the Company and the results of its operations for the periods presented. This report should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s Information Report on Form 8K/A for the year ended December 31, 2015 filed with the SEC on August 4, 2016. The Company assumes that the users of the interim financial information herein have read or have access to the audited financial statements for the preceding fiscal year and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. Accordingly, footnote disclosure, which would substantially duplicate the disclosure contained in the Company’s Form 8K/A for the year ended December 31, 2015 has been omitted. The results of operations for the interim periods presented are not necessarily indicative of results for the entire year ending December 31, 2016 or any other period. |
Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions | Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Critical accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or operating performance is material. The Company’s critical accounting estimates and assumptions affecting the financial statements were: (i) Assumption as a going concern (ii) Fair value of long-lived assets: (iii) Valuation allowance for deferred tax assets (iv) Estimates and assumptions used in valuation of equity instruments: These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. |
Principles of consolidation | Principles of consolidation The Company applies the guidance of Topic 810 “ Consolidation ASC The Company's consolidated subsidiaries and/or entities are as follows: Name of combined affiliate State or other jurisdiction of Company interest Castle 6 Productions LLC The State of New Jersey 100 % Filthy Gorgeous LLC The State of Delaware 100 % Geek Room LLC The State of Delaware 100 % Graphic Expression Corporate Collectibles LLC The State of Delaware 100 % Guccione Stores LLC The State of New Jersey 100 % iLongevity LLC The State of New Jersey 100 % JAJ Enterprises LLC The State of Delaware 100 % Jerrick Ventures INC The State of Nevada 100 % Miss Filthy LLC The State of Delaware 100 % Next Geek Thing LLC The State of Delaware 100 % No One’s Pet LLC The State of New Jersey 100 % OMNI Reboot LLC The State of Delaware 100 % Romper Zombie LLC The State of Delaware 100 % Steam Wars LLC The State of Delaware 100 % All inter-company balances and transactions have been eliminated. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in U.S. GAAP, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below: Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally observable inputs and not corroborated by market data. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses, accounts payable and accrued liabilities and accrued liquidating damages approximate their fair value because of the short maturity of those instruments. Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated. |
Fair Value of Non-Financial Assets or Liabilities Measured on a Recurring Basis | Fair Value of Non-Financial Assets or Liabilities Measured on a Recurring Basis The Company’s non-financial assets include inventory. The Company identifies potentially excess and slow-moving inventory by evaluating turn rates, inventory levels and other factors. Excess quantities are identified through evaluation of inventory aging, review of inventory turns and historical sales experiences. The Company provides lower of cost or market reserves for such identified excess and slow-moving inventories. The Company establishes a reserve for inventory shrinkage, if any, based on the historical results of physical inventory cycle counts. |
Cash Equivalents | Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. |
Inventories | Inventories Inventory Valuation The Company values inventory, entirely consisting of finished goods, at the lower of cost or market. Cost is determined on the first-in and first-out (“FIFO”) method. The Company reduces inventory for the diminution of value, resulting from product obsolescence, damage or other issues affecting marketability, equal to the difference between the cost of the inventory and its estimated market value. Factors utilized in the determination of estimated market value include: (i) current sales data and historical return rates, (ii) estimates of future demand, and (iii) competitive pricing pressures. Inventory Obsolescence and Markdowns The Company evaluates its current level of inventory considering historical sales and other factors and, based on this evaluation, classify inventory markdowns in the income statement as a component of cost of goods sold pursuant to Paragraph 420-10-S99 of the FASB Accounting Standards Codification to adjust inventory to net realizable value. These markdowns are estimates, which could vary significantly from actual requirements if future economic conditions, customer demand or competition differ from expectations. The Company recorded a markdown of $0 and $21,861 as of June 30, 2016 and December 31, 2015 due to slow moving inventory. There was no lower of cost or market adjustments for the reporting period ended June 30, 2016 or December 31, 2015. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives of the respective assets as follows: Estimated Useful Computer equipment and software 3 Furniture and fixture 5 Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statements of operations. |
Investments - Cost Method, Equity Method and Joint Venture | Investments - Cost Method, Equity Method and Joint Venture The Company accounts for marketable debt and equity securities, available for sale, in accordance with sub-topic 320-10 of the FASB Accounting Standards Codification (“Sub-topic 320-10”). Pursuant to Paragraph 320-10-35-1, investments in debt securities that are classified as available for sale and equity securities that have readily determinable fair values that are classified as available for sale shall be measured subsequently at fair value in the consolidated balance sheets at each balance sheet date. Unrealized holding gains and losses for available-for-sale securities (including those classified as current assets) shall be excluded from earnings and reported in other comprehensive income until realized except an available-for-sale security that is designated as being hedged in a fair value hedge, from which all or a portion of the unrealized holding gain and loss of shall be recognized in earnings during the period of the hedge, pursuant to paragraphs 815-25-35-1 through 815-25-35-4. The Company follows Paragraphs 320-10-35-17 through 320-10-35-34E and assess whether an investment is impaired in each reporting period. An investment is impaired if the fair value of the investment is less than its cost. Impairment indicators include, but are not limited to the following: a. a significant deterioration in the earnings performance, credit rating, asset quality, or business prospects of the investee; b. a significant adverse change in the regulatory, economic, or technological environment of the investee; c. a significant adverse change in the general market condition of either the geographic area or the industry in which the investee operates; d. a bona fide offer to purchase (whether solicited or unsolicited), an offer by the investee to sell, or a completed auction process for the same or similar security for an amount less than the cost of the investment; e. factors that raise significant concerns about the investee's ability to continue as a going concern, such as negative cash flows from operations, working capital deficiencies, or noncompliance with statutory capital requirements or debt covenants. If the fair value of an investment is less than its cost basis at the balance sheet date of the reporting period for which impairment is assessed, the impairment is either temporary or other than temporary. Pursuant to Paragraph 320-10-35-34, if it is determined that the impairment is other than temporary, then an impairment loss shall be recognized in earnings equal to the entire difference between the investment’s cost and its fair value at the balance sheet date of the reporting period for which the assessment is made. The measurement of the impairment shall not include partial recoveries after the balance sheet date. The fair value of the investment would then become the new basis of the investment and shall not be adjusted for subsequent recoveries in fair value. For presentation purpose, the entity shall present the total other-than-temporary impairment in the statement of earnings with an offset for the amount of the total other-than-temporary impairment that is recognized in other comprehensive income, in accordance with paragraph 320-10-35-34D, if any, pursuant to Paragraph 320-10-45-8A; and separately present, in the financial statement in which the components of accumulated other comprehensive income are reported, amounts recognized therein related to held-to-maturity and available-for-sale debt securities for which a portion of an other-than-temporary impairment has been recognized in earnings pursuant to Paragraph 320-10-45-9A. Pursuant to Paragraphs 320-10-35-36 and 37 the entire change in the fair value of foreign-currency-denominated available-for-sale debt securities shall be reported in other comprehensive income and An entity holding a foreign-currency-denominated available-for-sale debt security is required to consider, among other things, changes in market interest rates and foreign exchange rates since acquisition in determining whether an other-than-temporary impairment has occurred. Pursuant to FASB ASC Paragraph 320-10-50-2, the entity shall disclose all of the following by major security type as of each date for which a statement of financial position is presented: a. cost basis (net of amortization of debt discount for debt securities), aggregate fair value, total other-than-temporary impairment recognized in accumulated other comprehensive income; b. Total gains for securities with net gains in accumulated other comprehensive income; c. Total losses for securities with net losses in accumulated other comprehensive income; and d. Information about the contractual maturities of those securities as of the date of the most recent statement of financial position presented. On January 2, 2013, the Company purchased a minority interest in a business for proceeds of $83,333. The interest is accounted for under the cost method. The Company tests the carrying value annual for impairment. As of June 30, 2016, no impairment charges have been recognized on the minority interest. |
Related Parties | Related Parties The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20 FASB Accounting Standards, the related parties include (a.) affiliates of the Company (“Affiliate” means, with respect to any specified Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act); (b.) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15 FASB Accounting Standards, to be accounted for by the equity method by the investing entity; (c.) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d.) principal owners of the Company and members of their immediate families; (e.) management of the Company and members of their immediate families; (f.) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g.) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. Pursuant to ASC Paragraphs 850-10-50-1 and 50-5 financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. The disclosures shall include: (a.) the nature of the relationship(s) involved; (b.) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c.) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d.) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated. |
Commitments and Contingencies | Commitments and Contingencies The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. |
Revenue Recognition | Revenue Recognition The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. |
Stock-Based Compensation for Obtaining Employee Services | Stock-Based Compensation for Obtaining Employee Services The Company accounts for share-based payment transactions issued to employees under the guidance of the Topic 718 “ Compensation—Stock Compensation” Pursuant to ASC Section 718-10-20 an employee is an individual over whom the grantor of a share-based compensation award exercises or has the right to exercise sufficient control to establish an employer-employee relationship based on common law as illustrated in case law and currently under U.S. Internal Revenue Service (“IRS”) Revenue Ruling 87-41. A non-employee director does not satisfy this definition of employee. Nevertheless, non-employee directors acting in their role as members of a board of directors are treated as employees if those directors were elected by the employer’s shareholders or appointed to a board position that will be filled by shareholder election when the existing term expires. However, that requirement applies only to awards granted to non-employee directors for their services as directors. Awards granted to non-employee directors for other services shall be accounted for as awards to non-employees. Pursuant to ASC Paragraphs 718-10-30-2 and 718-10-30-3 a share-based payment transaction with employees shall be measured based on the fair value of the equity instruments issued and an entity shall account for the compensation cost from share-based payment transactions with employees in accordance with the fair value-based method, i.e., the cost of services received from employees in exchange for awards of share-based compensation generally shall be measured based on the grant-date fair value of the equity instruments issued or the fair value of the liabilities incurred/settled. Pursuant to ASC Paragraphs 718-10-30-6 and 718-10-30-9 the measurement objective for equity instruments awarded to employees is to estimate the fair value at the grant date of the equity instruments that the entity is obligated to issue when employees have rendered the requisite service and satisfied any other conditions necessary to earn the right to benefit from the instruments (for example, to exercise share options). That estimate is based on the share price and other pertinent factors, such as expected volatility, at the grant date. As such, the fair value of an equity share option or similar instrument shall be estimated using a valuation technique such as an option pricing model. For this purpose, a similar instrument is one whose fair value differs from its intrinsic value, that is, an instrument that has time value. If the Company’s common shares are traded in one of the national exchanges, the grant-date share price of the Company’s common stock will be used to measure the fair value of the common shares issued, however, if the Company’s common shares are thinly traded the use of share prices established in its most recent private placement memorandum (“PPM”), or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market. Pursuant to ASC Paragraph 718-10-55-21 if an observable market price is not available for a share option or similar instrument with the same or similar terms and conditions, an entity shall estimate the fair value of that instrument using a valuation technique or model that meets the requirements in paragraph 718-10-55-11 and takes into account, at a minimum, all of the following factors: a. The exercise price of the option. b. The expected term of the option, taking into account both the contractual term of the option and the effects of employees’ expected exercise and post-vesting employment termination behavior: The expected life of options and similar instruments represents the period of time the option and/or warrant are expected to be outstanding. Pursuant to paragraph 718-10-S99-1, it may be appropriate to use the simplified method i.e., expected term = ((vesting term + original contractual term) / 2) c. The current price of the underlying share. d. The expected volatility of the price of the underlying share for the expected term of the option. Pursuant to ASC Paragraph 718-10-55-25 a newly publicly traded entity might base expectations about future volatility on the average volatilities of similar entities for an appropriate period following their going public. A nonpublic entity might base its expected volatility on the average volatilities of otherwise similar public entities. For purposes of identifying otherwise similar entities, an entity would likely consider characteristics such as industry, stage of life cycle, size, and financial leverage. Because of the effects of diversification that are present in an industry sector index, the volatility of an index should not be substituted for the average of volatilities of otherwise similar entities in a fair value measurement. Pursuant to paragraph 718-10-S99-1 if shares of a company are thinly traded the use of weekly or monthly price observations would generally be more appropriate than the use of daily price observations as the volatility calculation using daily observations for such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market. The Company uses the average historical volatility of the comparable companies over the expected term of the share options or similar instruments as its expected volatility. e. The expected dividends on the underlying share for the expected term of the option. The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the expected term of the share options and similar instruments. f. The risk-free interest rate(s) for the expected term of the option. Pursuant to ASC 718-10-55-28 a U.S. entity issuing an option on its own shares must use as the risk-free interest rates the implied yields currently available from the U.S. Treasury zero-coupon yield curve over the contractual term of the option if the entity is using a lattice model incorporating the option’s contractual term. If the entity is using a closed-form model, the risk-free interest rate is the implied yield currently available on U.S. Treasury zero-coupon issues with a remaining term equal to the expected term used as the assumption in the model. Pursuant to ASC Paragraphs 718-10-30-11 and 718-10-30-17 a restriction that stems from the forfeitability of instruments to which employees have not yet earned the right, such as the inability either to exercise a non-vested equity share option or to sell non-vested shares, is not reflected in estimating the fair value of the related instruments at the grant date. Instead, those restrictions are taken into account by recognizing compensation cost only for awards for which employees render the requisite service and a non-vested equity share or non-vested equity share unit awarded to an employee shall be measured at its fair value as if it were vested and issued on the grant date. Pursuant to ASC Paragraphs 718-10-35-2 and 718-10-35-3 the compensation cost for an award of share-based employee compensation classified as equity shall be recognized over the requisite service period, with a corresponding credit to equity (generally, paid-in capital). The requisite service period is the period during which an employee is required to provide service in exchange for an award, which often is the vesting period. The total amount of compensation cost recognized at the end of the requisite service period for an award of share-based compensation shall be based on the number of instruments for which the requisite service has been rendered (that is, for which the requisite service period has been completed). An entity shall base initial accruals of compensation cost on the estimated number of instruments for which the requisite service is expected to be rendered. That estimate shall be revised if subsequent information indicates that the actual number of instruments is likely to differ from previous estimates. The cumulative effect on current and prior periods of a change in the estimated number of instruments for which the requisite service is expected to be or has been rendered shall be recognized in compensation cost in the period of the change. Previously recognized compensation cost shall not be reversed if an employee share option (or share unit) for which the requisite service has been rendered expires unexercised (or unconverted). Under the requirement of ASC Paragraph 718-10-35-8 the Company made a policy decision to recognize compensation cost for an award with only service conditions that has a graded vesting schedule on a straight-line basis over the requisite service period for the entire award. |
Equity Instruments Issued to Parties Other Than Employees for Acquiring Goods or Services | Equity Instruments Issued to Parties Other Than Employees for Acquiring Goods or Services The Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under the guidance of Sub-topic 505-50 of the FASB Accounting Standards Codification (“Sub-topic 505-50”). Pursuant to ASC paragraphs 505-50-25-6 and 505-50-25-7, a grantor shall recognize the goods acquired or services received in a share-based payment transaction when it obtains the goods or as services are received. A grantor may need to recognize an asset before it actually receives goods or services if it first exchanges share-based payment for an enforceable right to receive those goods or services. Nevertheless, the goods or services themselves are not recognized before they are received. If fully vested, nonforfeitable equity instruments are issued at the date the grantor and grantee enter into an agreement for goods or services (no specific performance is required by the grantee to retain those equity instruments), then, because of the elimination of any obligation on the part of the counterparty to earn the equity instruments, a measurement date has been reached. A grantor shall recognize the equity instruments when they are issued (in most cases, when the agreement is entered into). Pursuant to ASC paragraph 505-50-45-1, a grantor may conclude that an asset (other than a note or a receivable) has been received in return for fully vested, nonforfeitable equity instruments that are issued at the date the grantor and grantee enter into an agreement for goods or services (and no specific performance is required by the grantee in order to retain those equity instruments). Such an asset shall not be displayed as contra-equity by the grantor of the equity instruments. The transferability (or lack thereof) of the equity instruments shall not affect the balance sheet display of the asset. This guidance is limited to transactions in which equity instruments are transferred to other than employees in exchange for goods or services. Pursuant to Paragraphs 505-50-25-8 and 505-50-25-9, an entity may grant fully vested, non-forfeitable equity instruments that are exercisable by the grantee only after a specified period of time if the terms of the agreement provide for earlier exercisability if the grantee achieves specified performance conditions. Any measured cost of the transaction shall be recognized in the same period(s) and in the same manner as if the entity had paid cash for the goods or services or used cash rebates as a sales discount instead of paying with, or using, the equity instruments. A recognized asset, expense, or sales discount shall not be reversed if a stock option that the counterparty has the right to exercise expires unexercised. Pursuant to ASC Paragraphs 505-50-30-2 and 505-50-30-11 share-based payment transactions with nonemployees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The issuer shall measure the fair value of the equity instruments in these transactions using the stock price and other measurement assumptions as of the earlier of the following dates, referred to as the measurement date: (a) The date at which a commitment for performance by the counterparty to earn the equity instruments is reached (a performance commitment); or (b) The date at which the counterparty's performance is complete. If the Company’s common shares are traded in one of the national exchanges the grant-date share price of the Company’s common stock will be used to measure the fair value of the common shares issued; however, if the Company’s common shares are thinly traded the use of share prices established in the Company’s most recent private placement memorandum (“PPM”), or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market. Pursuant to ASC Paragraph 718-10-55-21 if an observable market price is not available for a share option or similar instrument with the same or similar terms and conditions, an entity shall estimate the fair value of that instrument using a valuation technique or model that meets the requirements in paragraph 718-10-55-11 and takes into account, at a minimum, all of the following factors: a. The exercise price of the option. b. The expected term of the option, taking into account both the contractual term of the option and the effects of employees’ expected exercise and post-vesting employment termination behavior: Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards Codification the expected term of share options and similar instruments represents the period of time the options and similar instruments are expected to be outstanding taking into consideration of the contractual term of the instruments and holder’s expected exercise behavior into the fair value (or calculated value) of the instruments. The Company uses historical data to estimate holder’s expected exercise behavior. If the Company is a newly formed corporation or shares of the Company are thinly traded the contractual term of the share options and similar instruments is used as the expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. c. The current price of the underlying share. d. The expected volatility of the price of the underlying share for the expected term of the option. Pursuant to ASC Paragraph 718-10-55-25 a newly publicly traded entity might base expectations about future volatility on the average volatilities of similar entities for an appropriate period following their going public. A nonpublic entity might base its expected volatility on the average volatilities of otherwise similar public entities. For purposes of identifying otherwise similar entities, an entity would likely consider characteristics such as industry, stage of life cycle, size, and financial leverage. Because of the effects of diversification that are present in an industry sector index, the volatility of an index should not be substituted for the average of volatilities of otherwise similar entities in a fair value measurement. Pursuant to paragraph 718-10-S99-1 if shares of a company are thinly traded the use of weekly or monthly price observations would generally be more appropriate than the use of daily price observations as the volatility calculation using daily observations for such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market. The Company uses the average historical volatility of the comparable companies over the expected term of the share options or similar instruments as its expected volatility. e. The expected dividends on the underlying share for the expected term of the option. The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the expected term of the share options and similar instruments. f. The risk-free interest rate(s) for the expected term of the option. Pursuant to ASC 718-10-55-28 a U.S. entity issuing an option on its own shares must use as the risk-free interest rates the implied yields currently available from the U.S. Treasury zero-coupon yield curve over the contractual term of the option if the entity is using a lattice model incorporating the option’s contractual term. If the entity is using a closed-form model, the risk-free interest rate is the implied yield currently available on U.S. Treasury zero-coupon issues with a remaining term equal to the expected term used as the assumption in the model. Pursuant to ASC paragraph 505-50-S99-1, if the Company receives a right to receive future services in exchange for unvested, forfeitable equity instruments, those equity instruments are treated as unissued for accounting purposes until the future services are received (that is, the instruments are not considered issued until they vest). Consequently, there would be no recognition at the measurement date and no entry should be recorded. |
Deferred Tax Assets and Income Tax Provision | Deferred Tax Assets and Income Tax Provision The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date. The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying consolidated balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its consolidated balance sheets and provides valuation allowances as management deems necessary. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. |
Cash Flows Reporting | Cash Flows Reporting The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (the “Indirect Method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments |
Subsequent Events | Subsequent Events The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as a filer with the United States Securities & Exchange Commission (the “SEC”) considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In August 2014, the FASB issued the FASB Accounting Standards Update No. 2014-15 “Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”). In connection with preparing financial statements for each annual and interim reporting period, an entity’s management should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued financial statements are available to be issued financial statements are issued financial statements are available to be issued probable Contingencies When management identifies conditions or events that raise substantial doubt about an entity’s ability to continue as a going concern, management should consider whether its plans that are intended to mitigate those relevant conditions or events will alleviate the substantial doubt. The mitigating effect of management’s plans should be considered only to the extent that (1) it is probable that the plans will be effectively implemented and, if so, (2) it is probable that the plans will mitigate the conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. If conditions or events raise substantial doubt about an entity’s ability to continue as a going concern, but the substantial doubt is alleviated as a result of consideration of management’s plans, the entity should disclose information that enables users of the financial statements to understand all of the following (or refer to similar information disclosed elsewhere in the footnotes): a. Principal conditions or events that raised substantial doubt about the entity’s ability to continue as a going concern (before consideration of management’s plans) b. Management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations c. Management’s plans that alleviated substantial doubt about the entity’s ability to continue as a going concern. If conditions or events raise substantial doubt about an entity’s ability to continue as a going concern, and substantial doubt is not alleviated after consideration of management’s plans, an entity should include a statement in the footnotes indicating that there is substantial doubt about the entity’s ability to continue as a going concern a. Principal conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern b. Management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations c. Management’s plans that are intended to mitigate the conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. In November 2015, the FASB issued the FASB Accounting Standards Update No. 2015-17 “ Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes For public business entities, the amendments in this Update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. In January 2016, the FASB issued the FASB Accounting Standards Update No. 2016-01 “ Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities This Update makes limited amendments to the guidance in U.S. GAAP on the classification and measurement of financial instruments. The new standard significantly revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. It also amends certain disclosure requirements associated with the fair value of financial instruments. Some of the major changes as a result of the ASU 2016-01 are summarized below. ● Requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. ● Simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. When a qualitative assessment indicates that impairment exists, an entity is required to measure the investment at fair value. ● Eliminate the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. ● Require public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. ● Require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. ● Require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements. ● Clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. In February 2016, the FASB issued ASU 2016-02, “ Leases” On March 30, 2016, the FASB issued ASU 2016-09, " Compensation - Stock Compensation In April 2016, the FASB issued ASU 2016–10 “ Revenue from Contract with Customers (Topic 606): Identifying Performance Obligations and Licensing”. Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying consolidated financial statements. |
Significant and Critical Acco17
Significant and Critical Accounting Policies and Practices (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Significant and Critical Accounting Policies and Practices [Abstract] | |
Schedule of consolidated subsidiaries and/or entities | Name of combined affiliate State or other jurisdiction of Company interest Castle 6 Productions LLC The State of New Jersey 100 % Filthy Gorgeous LLC The State of Delaware 100 % Geek Room LLC The State of Delaware 100 % Graphic Expression Corporate Collectibles LLC The State of Delaware 100 % Guccione Stores LLC The State of New Jersey 100 % iLongevity LLC The State of New Jersey 100 % JAJ Enterprises LLC The State of Delaware 100 % Jerrick Ventures INC The State of Nevada 100 % Miss Filthy LLC The State of Delaware 100 % Next Geek Thing LLC The State of Delaware 100 % No One’s Pet LLC The State of New Jersey 100 % OMNI Reboot LLC The State of Delaware 100 % Romper Zombie LLC The State of Delaware 100 % Steam Wars LLC The State of Delaware 100 % |
Schedule of property and equipment estimated useful life | Estimated Useful Computer equipment and software 3 Furniture and fixture 5 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Property and Equipment [Abstract] | |
Summary of property and equipment | June 30, December 31, Computer Equipment $ 219,653 175,695 Furniture and Fixtures 61,803 61,803 281,456 237,498 Less: Accumulated Depreciation (187,778 ) (166,992 ) $ 93,678 $ 70,506 |
Capital Leases Payable (Tables)
Capital Leases Payable (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Capital Leases Payable [Abstract] | |
Summary of capital lease obligation | June 30, December 31, (i) Capital lease obligation to a financing company for a term of five (5) years, collateralized by equipment, with interest at 10.0% per annum, with principal and interest due and payable in monthly installments of $383.10 $ 5,204 $ 6,619 Less current maturities (3,524 ) (3,524 ) Capital lease obligation, net of current maturities 1,680 3,095 TOTAL CAPITAL LEASE OBLIGATION $ 5,204 $ 6,619 |
Summary of capital leases maturity | 2016: $ 3,095 2017: $ 2,109 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Warrants [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Schedule of assumptions used for options and warrants granted | Exercise price $ 0.40 Expected dividends 0 % Expected volatility 73.44 % Risk free interest rate 1.39 % Expected life of warrant 5 years |
Schedule of stock option and warrant activity | Warrants Weighted Average Exercise Price Outstanding – December 31, 2015 10,750,000 $ 0.35 Granted 2,791,667 $ 0.40 Exercised - $ - Forfeited/Cancelled - $ - Outstanding – June 30, 2016 13,541,667 $ 0.36 Exercisable – June 30, 2016 12,958,334 $ 0.36 |
Schedule of changes in warrants outstanding | Warrants Outstanding Warrants Exercisable Exercise price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Weighted Average Exercise Price $ 0.35 – 0.40 13,541667 4.14 $ 0.36 12,958,334 $ 0.36 |
Stock Option [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Schedule of assumptions used for options and warrants granted | Exercise price $ 0.25 Expected dividends 0 % Expected volatility 73.44 % Risk free interest rate 1.39 % Expected life of option 4.68 years |
Schedule of stock option and warrant activity | Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Balance – December 31, 2015 – outstanding 500,000 0.25 4.93 - Balance – December 31, 2015 – exercisable 500,000 $ 0.25 4.93 $ - Outstanding options held by related party – December 31, 2015 500,000 $ 0.25 4.93 $ - Exercisable options held by related party – December 31, 2015 500,000 $ 0.25 4.93 $ - Balance – December 31, 2015 500,000 $ 0.25 4.68 $ - Granted 50,000 0.25 4.68 - Exercised - Cancelled/Modified - Balance – June 30, 2016 – outstanding 550,000 $ 0.25 4.18 - Balance – June 30, 2016 – exercisable 550,000 $ 0.25 4.18 $ - Outstanding options held by related party – June 30, 2016 550,000 $ 0.25 4.18 $ - Exercisable options held by related party – June 30, 2016 550,000 $ 0.25 4.18 $ - |
Summary of stock options granted | Options Value Purpose for Grant 550,000 $ 101,285 Board Services |
Organization and Operations (De
Organization and Operations (Details) - shares | Feb. 06, 2016 | Feb. 05, 2016 | Dec. 31, 2015 |
Issuance of stock, shares | 2,626,308 | 28,500,000 | |
Warrants purchase of common stock | 12,391,667 | ||
Spin-Off Agreement [Member] | |||
Cancelled of common stock | 781,818 | ||
Exchange Agreement (Member) | |||
Cancelled of common stock | 21,818 | ||
Kent Campbell [Member] | Spin-Off Agreement [Member] | |||
Cancelled of common stock | 781,818 | ||
Kent Campbell [Member] | Exchange Agreement (Member) | |||
Cancelled of common stock | 363,636 | ||
Denis Espinoza [Member] | Exchange Agreement (Member) | |||
Cancelled of common stock | 58,951 | ||
Sarah Campbell [Member] | Exchange Agreement (Member) | |||
Cancelled of common stock | 21,818 | ||
Common Stock [Member] | |||
Issuance of stock, shares | 28,500,000 | ||
Series A Convertible Preferred Stock (Member) | |||
Issuance of stock, shares | 33,414.89 | 24,400 | |
Series A Convertible Preferred Stock (Member) | Exchange Agreement (Member) | |||
Cancelled of common stock | 6,000 | ||
Series A Convertible Preferred Stock (Member) | Kent Campbell [Member] | Exchange Agreement (Member) | |||
Cancelled of common stock | 6,000 | ||
Series A Convertible Preferred Stock (Member) | Denis Espinoza [Member] | Exchange Agreement (Member) | |||
Cancelled of common stock | 4,000 | ||
Series B Convertible Preferred Stock (Member) | |||
Issuance of stock, shares | 7,000 | ||
Series B Convertible Preferred Stock (Member) | Exchange Agreement (Member) | |||
Cancelled of common stock | 10,000 | ||
Series B Convertible Preferred Stock (Member) | Kent Campbell [Member] | Exchange Agreement (Member) | |||
Cancelled of common stock | 10,000 | ||
Series D Preferred Stock [Member] | Exchange Agreement (Member) | |||
Cancelled of common stock | 98,933 | ||
Series D Preferred Stock [Member] | Kent Campbell [Member] | Exchange Agreement (Member) | |||
Cancelled of common stock | 1,648,881 | ||
Series D Preferred Stock [Member] | Denis Espinoza [Member] | Exchange Agreement (Member) | |||
Cancelled of common stock | 265,676 | ||
Series D Preferred Stock [Member] | Sarah Campbell [Member] | Exchange Agreement (Member) | |||
Cancelled of common stock | 98,933 | ||
Jerrick Ventures, Inc. [Member] | |||
Warrants purchase of common stock | 12,391,667 | ||
Jerrick Ventures, Inc. [Member] | Series A Convertible Preferred Stock (Member) | |||
Issuance of stock, shares | 33,414.89 | ||
Jerrick Ventures, Inc. [Member] | Series B Convertible Preferred Stock (Member) | |||
Issuance of stock, shares | 8,063.33 |
Significant and Critical Acco22
Significant and Critical Accounting Policies and Practices (Details ) | 6 Months Ended |
Jun. 30, 2016 | |
Castle 6 Productions LLC | |
Name of combined affiliate | Castle 6 Productions LLC |
State or other jurisdiction of incorporation or organization | The State of New Jersey |
Company interest | 100.00% |
Filthy Gorgeous LLC | |
Name of combined affiliate | Filthy Gorgeous LLC |
State or other jurisdiction of incorporation or organization | The State of Delaware |
Company interest | 100.00% |
Geek Room LLC | |
Name of combined affiliate | Geek Room LLC |
State or other jurisdiction of incorporation or organization | The State of Delaware |
Company interest | 100.00% |
Graphic Expression Corporate Collectibles LLC | |
Name of combined affiliate | Graphic Expression Corporate Collectibles LLC |
State or other jurisdiction of incorporation or organization | The State of Delaware |
Company interest | 100.00% |
Guccione Stores LLC | |
Name of combined affiliate | Guccione Stores LLC |
State or other jurisdiction of incorporation or organization | The State of New Jersey |
Company interest | 100.00% |
iLongevity LLC | |
Name of combined affiliate | iLongevity LLC |
State or other jurisdiction of incorporation or organization | The State of New Jersey |
Company interest | 100.00% |
JAJ Enterprises LLC | |
Name of combined affiliate | JAJ Enterprises LLC |
State or other jurisdiction of incorporation or organization | The State of Delaware |
Company interest | 100.00% |
Jerrick Ventures INC | |
Name of combined affiliate | Jerrick Ventures LLC |
State or other jurisdiction of incorporation or organization | The State of Nevada |
Company interest | 100.00% |
Miss Filthy LLC | |
Name of combined affiliate | Miss Filthy LLC |
State or other jurisdiction of incorporation or organization | The State of Delaware |
Company interest | 100.00% |
Next Geek Thing LLC | |
Name of combined affiliate | Next Geek Thing LLC |
State or other jurisdiction of incorporation or organization | The State of Delaware |
Company interest | 100.00% |
No One's Pet LLC | |
Name of combined affiliate | No One's Pet LLC |
State or other jurisdiction of incorporation or organization | The State of New Jersey |
Company interest | 100.00% |
OMNI Reboot LLC | |
Name of combined affiliate | OMNI Reboot LLC |
State or other jurisdiction of incorporation or organization | The State of Delaware |
Company interest | 100.00% |
Romper Zombie LLC | |
Name of combined affiliate | Romper Zombie LLC |
State or other jurisdiction of incorporation or organization | The State of Delaware |
Company interest | 100.00% |
Steam Wars LLC | |
Name of combined affiliate | Steam Wars LLC |
State or other jurisdiction of incorporation or organization | The State of Delaware |
Company interest | 100.00% |
Significant and Critical Acco23
Significant and Critical Accounting Policies and Practices (Details 1) | 6 Months Ended |
Jun. 30, 2016 | |
Computer equipment and software [Member] | |
Property and equipment estimated useful life (years) | 3 years |
Furniture and fixture [Member] | |
Property and equipment estimated useful life (years) | 5 years |
Significant and Critical Acco24
Significant and Critical Accounting Policies and Practices (Details Textual) - USD ($) | Jan. 03, 2013 | Jun. 30, 2016 | Dec. 31, 2015 |
Significant and Critical Accounting Policies and Practices (Textual) | |||
Inventory markdown charges | $ 0 | $ 21,861 | |
Investments minority interest | $ 83,333 | ||
Impairment expenses | |||
Income tax benefits recognized, percent | 50.00% |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 281,456 | $ 237,498 |
Less: Accumulated Depreciation | (187,778) | (166,992) |
Property and equipment, net | 93,678 | 70,506 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 61,803 | 61,803 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 219,653 | $ 175,695 |
Property and Equipment (Detai26
Property and Equipment (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Property and Equipment (Textual) | ||||
Depreciation expense | $ 10,812 | $ 1,409 | $ 20,784 | $ 2,804 |
Line of Credit (Details)
Line of Credit (Details) - USD ($) | 1 Months Ended | 6 Months Ended | ||
Mar. 19, 2009 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Line of Credit (Textual) | ||||
Line of credit maximum outstanding balance | $ 200,000 | |||
Line of credit facility, expiration date | Mar. 19, 2010 | |||
Line of credit variable interest rate | 4.50% | |||
Line of credit monthly interest rate during period | 3.50% | 4.25% | ||
Line of credit | $ 202,512 | $ 202,422 |
Convertible Note Payable (Detai
Convertible Note Payable (Details) - USD ($) | Dec. 02, 2015 | May 26, 2016 | Mar. 17, 2016 |
Convertible Note Payable (Textual) | |||
Convertible note | $ 100,000 | $ 200,000 | |
Interest rate | 12.00% | 12.50% | 12.00% |
Maturity date | Dec. 1, 2016 | May 26, 2017 | Apr. 21, 2016 |
Warrants issued | 300,000 | 150,000 | |
Conversion price per share | $ 0.35 | ||
Warrant purchase price | $ 0.35 | $ 0.40 | $ 0.40 |
Warrant term | 5 years | 5 years |
Related Party Loan (Details)
Related Party Loan (Details) - USD ($) | Dec. 02, 2015 | May 26, 2016 | Mar. 17, 2016 |
Related Party Loan (Textual) | |||
Secured debt | $ 1,000,000 | ||
Interest rate | 12.00% | 12.50% | 12.00% |
Warrant term | 5 years | 5 years | |
Warrants issued to purchase shares | 1,000,000 | ||
Warrant exercise price | $ 0.35 | $ 0.40 | $ 0.40 |
Maturity date | Dec. 1, 2016 | May 26, 2017 | Apr. 21, 2016 |
Capital Leases Payable (Details
Capital Leases Payable (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Capital Leases Payable [Abstract] | ||
Capital lease obligation to a financing company for a term of five (5) years, collateralized by equipment, with interest at 10.0% per annum, with principal and interest due and payable in monthly installments of $383.10 | $ 5,204 | $ 6,619 |
Less current maturities | 3,524 | 3,524 |
Capital lease obligation, net of current maturities | 1,680 | 3,095 |
TOTAL CAPITAL LEASE OBLIGATION | $ 5,204 | $ 6,619 |
Capital Leases Payable (Detai31
Capital Leases Payable (Details 1) | Jun. 30, 2016USD ($) |
Capital Leases Payable [Abstract] | |
2016: | $ 3,095 |
2017: | $ 2,109 |
Capital Leases Payable (Detai32
Capital Leases Payable (Details Textual) | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Capital Leases Payable (Textual) | |
Capital leases due amount | $ 383.10 |
Capital leases interest per annum | 10.00% |
Capital lease obligation term | 5 years |
Stockholders' Deficit (Details)
Stockholders' Deficit (Details) - Warrants [Member] | 6 Months Ended |
Jun. 30, 2016$ / shares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price | $ 0.40 |
Expected dividends | 0.00% |
Expected volatility | 73.44% |
Risk free interest rate | 1.39% |
Expected life of warrant | 5 years |
Stockholders' Deficit (Details
Stockholders' Deficit (Details 1) - Warrants [Member] | 6 Months Ended |
Jun. 30, 2016$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Outstanding Beginning Balance | shares | 10,750,000 |
Granted | shares | 2,791,667 |
Exercised | shares | |
Forfeited/Cancelled | shares | |
Outstanding Ending Balance | shares | 13,541,667 |
Exercisable - June 30, 2016 | shares | 12,958,334 |
Weighted Average Exercise Price Outstanding Beginning Balance | $ / shares | $ 0.35 |
Weighted Average Exercise Price Granted | $ / shares | 0.40 |
Weighted Average Exercise Price Exercised | $ / shares | |
Weighted Average Exercise Price Forfeited/Cancelled | $ / shares | |
Weighted Average Exercise Price Outstanding Ending Balance | $ / shares | 0.36 |
Weighted Average Exercise Price Exercisable | $ / shares | $ 0.36 |
Stockholders' Deficit (Detail35
Stockholders' Deficit (Details 2) - Warrant [Member] - $ / shares | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Warrants Outstanding, Exercise Price Minimum | $ 0.35 | |
Warrants Outstanding Exercise Price Maximum | $ 0.40 | |
Warrants Outstanding, Number Outstanding | 13,541,667 | 10,750,000 |
Warrants Outstanding, Weighted Average Remaining Contractual Life (in years) | 4 years 1 month 21 days | |
Warrants Outstanding, Weighted Average Exercise Price | $ 0.36 | $ 0.35 |
Warrants Exercisable , Number Exercisable | 12,958,334 | |
Warrants Exercisable, Weighted Average Exercise Price | $ 0.36 |
Stockholders' Deficit (Detail36
Stockholders' Deficit (Details 3) - Stock Option [Member] | 6 Months Ended |
Jun. 30, 2016$ / shares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price | $ 0.25 |
Expected dividends | 0.00% |
Expected volatility | 73.44% |
Risk free interest rate | 1.39% |
Expected life of option | 4 years 8 months 5 days |
Stockholders' Deficit (Detail37
Stockholders' Deficit (Details 4) - Stock Option [Member] - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Exercisable Beginning Balance | 500,000 | |
Outstanding Beginning Balance | 500,000 | |
Granted | 50,000 | |
Exercised | ||
Cancelled/Modified | ||
Outstanding Ending Balance | 550,000 | 500,000 |
Exercisable Ending Balance | 550,000 | 500,000 |
Outstanding options held by related party | 550,000 | 500,000 |
Exercisable options held by related party | 550,000 | 500,000 |
Weighted Average Exercise Price Exercisable Beginning Balance | $ 0.25 | |
Weighted Average Exercise Price Outstanding Beginning Balance | 0.25 | |
Weighted Average Exercise Price Granted | 0.25 | |
Weighted Average Exercise Price Exercised | ||
Weighted Average Exercise Price Cancelled/Modified | ||
Weighted Average Exercise Price Outstanding Ending Balance | 0.25 | 0.25 |
Weighted Average Exercise Price Exercisable Ending Balance | 0.25 | 0.25 |
Weighted Average Exercise Price Outstanding options held by related party | 0.25 | 0.25 |
Weighted Average Exercise Price Exercisable options held by related party | $ 0.25 | $ 0.25 |
Weighted Average Remaining Contractual Life (in years), Outstanding | 4 years 2 months 5 days | 4 years 8 months 5 days |
Weighted Average Remaining Contractual Life (in years), Granted | 4 years 8 months 5 days | |
Weighted Average Remaining Contractual Life (in years), Exercisable | 4 years 11 months 5 days | |
Weighted Average Remaining Contractual Life (in years), Outstanding options held by related party | 4 years 2 months 5 days | 4 years 11 months 5 days |
Weighted Average Remaining Contractual Life (in years), Exercisable options held by related party | 4 years 2 months 5 days | 4 years 11 months 5 days |
Aggregate Intrinsic Value Outstanding | ||
Aggregate Intrinsic Value Exercisable | 425 | |
Aggregate Intrinsic Value Outstanding options held by related party | ||
Aggregate Intrinsic Value Exercisable options held by related party |
Stockholders' Deficit (Detail38
Stockholders' Deficit (Details 5) | 6 Months Ended |
Jun. 30, 2016USD ($)shares | |
Stockholders' Deficit [Abstract] | |
Options | shares | 550,000 |
Value | $ | $ 101,285 |
Purpose for Grant | Board Services |
Stockholders' Deficit (Detail39
Stockholders' Deficit (Details Textual) - USD ($) | Feb. 06, 2016 | Feb. 05, 2016 | Feb. 13, 2015 | Dec. 21, 2015 | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Mar. 17, 2016 | Dec. 09, 2015 | Dec. 02, 2015 |
Stockholders' Deficit (Textual) | ||||||||||
Total shares authorized | 100,000,000 | |||||||||
Preferred Stock, Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Common Stock, Shares Authorized | 90,000,000 | 90,000,000 | ||||||||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Common Stock, Shares, Issued | 31,682,537 | 28,500,000 | ||||||||
Common Stock, Shares, Outstanding | 31,682,537 | 28,500,000 | ||||||||
Number of shares sold | 2,626,308 | 28,500,000 | ||||||||
Convertible notes | $ 200,000 | $ 100,000 | ||||||||
Proceeds from the issuance of stock | $ 2,626 | $ 99,990 | $ 6,000 | |||||||
Restricted stock issued during period | 268,333 | |||||||||
Stock Incentive Plan [Member] | ||||||||||
Stockholders' Deficit (Textual) | ||||||||||
Common Stock, Shares, Issued | 18,000,000 | |||||||||
Series A Preferred Stock [Member] | ||||||||||
Stockholders' Deficit (Textual) | ||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | ||||||||
Preferred Stock, Shares Issued | 33,314 | 33,314 | ||||||||
Preferred Stock, Shares Outstanding | 33,314 | 33,314 | ||||||||
Number of shares sold | 33,414.89 | 24,400 | ||||||||
Convertible notes | $ 800,000 | |||||||||
Convertion preferred stock, Shares | 100,000 | 8,914 | ||||||||
Interest Payable | $ 91,400 | |||||||||
Proceeds from the issuance of stock | $ 2,450,000 | |||||||||
Accrued for liquidating damages | $ 3,318,353 | |||||||||
Warrants associated value | $ 309,665 | |||||||||
Conversion price | $ 0.25 | |||||||||
Dividend rate | 6.00% | |||||||||
Dividend, description | Upon the occurrence of an Event of Default (as defined below) and while such Event of Default is outstanding, such dividend rate shall be increased to 15% per annum on the Series A Stated Value. At the Company's option, such dividend payments may be made in (i) cash (ii) additional shares of Series A valued at the Series A Stated Value thereof, in an amount equal to 150% of the cash dividend otherwise payable or (iii) a combination of cash and additional shares of Series A, provided there is not an existing current Event of Default on the date on which a dividend payment is payable, in which event the Holder entitled to receive such dividend may elect to receive such dividends in cash or additional shares of Series A Preferred. | |||||||||
Beneficial ownership by Holder and Affiliates | 4.99% | |||||||||
Series B Preferred Stock [Member] | ||||||||||
Stockholders' Deficit (Textual) | ||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | ||||||||
Preferred Stock, Shares Issued | 8,063 | 7,000 | ||||||||
Preferred Stock, Shares Outstanding | 8,063 | 7,000 | ||||||||
Number of shares sold | 7,000 | |||||||||
Convertion preferred stock, Shares | 20,000 | |||||||||
Proceeds from the issuance of stock | $ 700,000 | |||||||||
Accrued for liquidating damages | $ 667,313 | |||||||||
Warrants associated value | $ 51,159 | |||||||||
Conversion price | $ 0.30 | |||||||||
Dividend rate | 6.00% | |||||||||
Dividend, description | Upon the occurrence of an Event of Default as defined below and while such Event of Default is outstanding, such dividend rate shall be increased to 15% per annum on the Series B Stated Value. At the Corporation's option, such dividend payments may be made in (i) cash (ii) additional shares of Series B valued at the Series B Stated Value thereof, in an amount equal to 100% of the cash dividend otherwise payable or (iii) a combination of cash and additional shares of Series B, provided there is not an existing current Event of Default on the date on which a dividend payment is payable, in which event the Holder entitled to receive such dividend may elect to receive such dividends in cash or additional shares of Series B Preferred. | |||||||||
Beneficial ownership by Holder and Affiliates | 4.99% | |||||||||
Common Stock [Member] | ||||||||||
Stockholders' Deficit (Textual) | ||||||||||
Compensation expense | $ 375,000 | |||||||||
Common Stock [Member] | Performance Shares [Member] | ||||||||||
Stockholders' Deficit (Textual) | ||||||||||
Shares awarded to employees | 1,500,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 1 Months Ended | |||
Aug. 17, 2016 | May 26, 2016 | Mar. 17, 2016 | Dec. 02, 2015 | |
Subsequent Events (Textual) | ||||
Warrant exercisable price per share | $ 0.40 | $ 0.40 | $ 0.35 | |
Subsequent Event [Member] | ||||
Subsequent Events (Textual) | ||||
Sale of shares of common stock | 666,666 | |||
Warrants to purchase shares of common stock | 333,333 | |||
Warrants to purchase price of common stock | $ 250,000 | |||
Warrant exercisable term | 5 years | |||
Warrant exercisable price per share | $ 0.40 |