Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 15, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Jerrick Media Holdings, Inc. | |
Entity Central Index Key | 1,357,671 | |
Trading Symbol | JMDA | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,017 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 33,894,582 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheet (Unaudited) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash | $ 53,963 | $ 174,494 |
Prepaid expenses | 10,000 | |
Total Current Assets | 53,963 | 184,494 |
Property and equipment, net | 62,528 | 71,829 |
Security deposit | 38,445 | 38,445 |
Minority investment in business | 83,333 | 83,333 |
Total Assets | 238,269 | 378,101 |
Current Liabilities | ||
Accounts payable and accrued liabilities | 990,108 | 1,387,068 |
Accrued dividends | 302,888 | 259,170 |
Demand loan | 10,366 | 10,366 |
Convertible Notes, net of debt discount and Issuance costs | 271,958 | 268,823 |
Current portion of capital lease payable | 4,732 | 3,524 |
Note payable - related party, net of debt discount | 1,389,441 | 1,350,325 |
Note payable, net of debt discount and Issuance costs | 198,559 | 30,579 |
Derivative liability | 1,289,187 | |
Line of credit | 215,935 | 235,141 |
Total Current Liabilities | 4,673,174 | 3,544,996 |
Non-current Liabilities: | ||
Capital lease payables | 1,208 | |
Total Non-current Liabilities | 1,208 | |
Total Liabilities | 4,673,174 | 3,546,204 |
Commitments and contingencies | ||
Stockholders' Deficit | ||
Common stock par value $0.001: 300,000,000 shares authorized; 37,701,322 and 33,894,582 issued and outstanding as of March 31, 2017 and December 31, 2016 respectively | 37,702 | 33,895 |
Additional paid in capital | 10,406,723 | 10,075,941 |
Accumulated deficit | (14,879,372) | (13,277,981) |
Total Stockholders' Equity | (4,434,905) | (3,168,103) |
Total Liabilities and Stockholders' Deficit | 238,269 | 378,101 |
Series A Preferred stock | ||
Stockholders' Deficit | ||
Preferred stock value | 33 | 33 |
Total Stockholders' Equity | 33 | 33 |
Series B Preferred stock | ||
Stockholders' Deficit | ||
Preferred stock value | 8 | 8 |
Total Stockholders' Equity | 8 | 8 |
Series D Preferred stock | ||
Stockholders' Deficit | ||
Preferred stock value | 1 | 1 |
Total Stockholders' Equity | $ 1 | $ 1 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheet (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 37,701,322 | 33,894,582 |
Common stock, shares outstanding | 37,701,322 | 33,894,582 |
Series A Preferred stock | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | 33,414 | 33,314 |
Preferred stock, shares outstanding | 33,414 | 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 | 914 | 0 |
Preferred stock, shares outstanding | 914 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||
Net revenue | $ 41,842 | $ 120,708 |
Cost of revenue | 34,398 | |
Gross margin | 41,842 | 86,310 |
Operating expenses | ||
Compensation | 359,134 | 337,442 |
Consulting fees | 140,005 | 109,118 |
Share based payments | 186,976 | 48,449 |
General and administrative | 383,738 | 209,837 |
Total operating expenses | 1,069,853 | 704,846 |
Loss from operations | (1,028,011) | (618,536) |
Other income (expenses) | ||
Interest expense | (642,755) | (33,154) |
Change In derivative liability | 223,767 | |
Settlement of vendor liabilities | (110,674) | |
Other income (expenses), net | (529,662) | (33,154) |
Loss before income tax provision | (1,557,673) | (651,690) |
Income tax provision | ||
Net loss | $ (1,557,673) | $ (651,690) |
Per-share data | ||
Basic and diluted loss per share | $ (0.04) | $ (0.02) |
Weighted average number of common shares outstanding | 36,462,497 | 29,879,099 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (1,557,673) | $ (651,690) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 9,301 | 9,971 |
Accretion of debt issuance costs | 16,224 | |
Accretion of debt discount | 314,673 | 24,425 |
Share-based compensation | 186,977 | 48,449 |
Loss on settlement of vendor liabilities | 110,674 | |
Change in fair value of derivative liability | (223,766) | |
Derivative expense | 254,470 | |
Changes in operating assets and liabilities: | ||
Prepaid expenses | 10,000 | (10,000) |
Security deposit | (11,330) | |
Accounts payable and accrued expenses | (43,231) | 5,989 |
Net Cash Used In Operating Activities | (922,351) | (584,186) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Cash paid for property and equipment | (43,957) | |
Net Cash Used In Investing Activities | (43,957) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayment of loans | (1,415) | |
Net proceeds from issuance of notes | 926,585 | 106,000 |
Net proceeds from issuance of preferred stock | 94,248 | |
Proceeds from issuance of note payable - related party | 90,000 | |
Repayment of note payable - related party | (120,000) | |
Repayment of line of credit | (19,206) | |
Cash paid for debt issuance costs | (75,559) | |
Net Cash Provided By Financing Activities | 801,820 | 198,833 |
Net Change in Cash | (120,531) | (429,310) |
Cash - Beginning of Period | 174,494 | 438,629 |
Cash - End of Period | 53,963 | 9,319 |
Cash Paid During the Year for: | ||
Income taxes | ||
Interest | 3,534 | |
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Settlement of vendor liabilities | 353,732 | |
Conversion of interest | 108,843 | |
Debt discount on convertible note | 90,470 | 24,425 |
Debt discount on related party note payable | 10,195 | |
Accrued dividends | 43,718 | |
Warrants at issuance of debt | 1,168,014 | |
Perfered stock and warrant modification | ||
Conversion of bridge notes |
Organization and Operations
Organization and Operations | 3 Months Ended |
Mar. 31, 2017 | |
Organization and Operations [Abstract] | |
Organization and Operations | Note 1 - Organization and Operations 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. |
Significant and Critical Accoun
Significant and Critical Accounting Policies and Practices | 3 Months Ended |
Mar. 31, 2017 | |
Significant and Critical Accounting Policies and Practices [Abstract] | |
Significant and Critical Accounting Policies and Practices | Note 2 - Significant and Critical Accounting Policies and Practices The Company’s significant accounting policies are disclosed in Note 2 - Summary of Significant Accounting Policies in the 2016 Annual Report. Since the date of the 2016 Annual Report, there have been no material changes to the Company’s significant accounting policies. The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and the accompanying notes to the condensed consolidated financial statements. These estimates and assumptions include valuing equity securities and derivative financial instruments issued in financing transactions, deferred taxes and related valuation allowances, and the fair values of long lived assets. Actual results could differ from the estimates. 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”) and the rules and regulations of the Securities and Exchange Commission (“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 Form 10-K for the year ended December 31, 2016 filed with the Securities and Exchange Commission (the “ SEC 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 consolidates all less-than-majority-owned subsidiaries, if any, in which the parent’s power to control exists. As of March 31, 2017, the Company's consolidated subsidiaries and/or entities are as follows: Name of combined affiliate State or other jurisdiction of Company interest Astoria Surgical Supplies North LLC The State of New Jersey 100 % 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 LLC The State of Delaware 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. On May 12, 2017, the Company assigned the right, title and interest to all of the membership interests of the above listed subsidiaries, with the exception of Jerrick Ventures, LLC, to the Company’s Chief Executive Officer, Jeremy Frommer, in consideration for Mr. Frommer’s assumption of all liabilities of such subsidiaries, if any, with such assignment and assumption effected entirely in the interest of corporate efficiency. The Board reviewed the transaction and believes it to be fair in all respects, deeming it to advance the Company’s business interests by allowing the Company to divest non-producing and non-operating subsidiaries at no cost to the Company. All of the Company’s operations have been, and will continue to be, run through its operating subsidiary, Jerrick Ventures LLC. 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. The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. 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. 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. 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 $0 as of March 31, 2017 and 2016, respectively, due to slow moving inventory. There was no lower of cost or market adjustments for the reporting period ended March 31, 2017 or 2016. 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 In accordance with sub-topic 323-10 of the FASB ASC (“Sub-topic 323-10”), the Company accounts for investments in common stock of an investee for which the Company has significant influence in the operating or financial policies even though the Company holds 50% or less of the common stock or in-substance common stock. 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 annually for impairment. 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. Derivative Liability The Company evaluates its debt and equity issuances to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with paragraph 815-10-05-4 and Section 815-40-25 of the FASB Accounting Standards Codification. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as either an asset or a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the consolidated statement of operations as other income or expense. Upon conversion, exercise or cancellation of a derivative instrument, the instrument is marked to fair value at the date of conversion, exercise or cancellation and then the related fair value is reclassified to equity. In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date. The Company adopted Section 815-40-15 of the FASB Accounting Standards Codification (“Section 815-40-15”) to determine whether an instrument (or an embedded feature) is indexed to the Company’s own stock. Section 815-40-15 provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions. The Company utilizes an option pricing model to compute the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet date. The Company records the change in the fair value of the derivative as other income or expense in the condensed consolidated statements of operations. 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 The Company recognizes compensation expense for all equity–based payments in accordance with ASC 718 “Compensation – Stock Compensation". Restricted stock awards are granted at the discretion of the Company. These awards are restricted as to the transfer of ownership and generally vest over the requisite service periods, typically over a five year period (vesting on a straight–line basis). The fair value of a stock award is equal to the fair market value of a share of Company stock on the grant date. The fair value of an option award is estimated on the date of grant using the Black–Scholes option valuation model. The Black–Scholes option valuation model requires the development of assumptions that are inputs into the model. These assumptions are the value of the underlying share, the expected stock volatility, the risk–free interest rate, the expected life of the option, the dividend yield on the underlying stock and the expected forfeiture rate. Expected volatility is benchmarked against similar companies in a similar industry over the expected option life and other appropriate factors. Risk–free interest rates are calculated based on continuously compounded risk–free rates for the appropriate term. The dividend yield is assumed to be zero as the Company has never paid or declared any cash dividends on its Common stock and does not intend to pay dividends on its Common stock in the foreseeable future. The expected forfeiture rate is estimated based on management’s best estimate. Determining the appropriate fair value model and calculating the fair value of equity–based payment awards requires the input of the subjective assumptions described above. The assumptions used in calculating the fair value of equity–based payment awards represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and the Company uses different assumptions, our equity–based compensation could be materially different in the future. In addition, the Company is required to estimate the expected forfeiture rate and recognize expense only for those shares expected to vest. If the Company’s actual forfeiture rate is materially different from its estimate, the equity–based compensation could be significantly different from what the Company has recorded in the current period. The Company accounts for share–based payments granted to non–employees in accordance with ASC 505-40, “Equity Based Payments to Non–Employees”. The Company determines the fair value of the stock–based payment as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of either (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete. The fair value of the equity instruments is re-measured each reporting period over the requisite service period. Income Taxes Income taxes are provided in accordance with ASC No. 740, “ Accounting for Income Taxes Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. 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. Loss Per Share Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, which is the case for the three months ended March 31, 2017 and 2016 presented in these condensed consolidated financial statements, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. The Company had the following common stock equivalents at March 31, 2017 and 2016: March 31, March 31, Options 2,259,090 550,000 Warrants 21,813,281 12,541,667 Totals 24,072,371 13,091,667 Subsequent Events The Company has evaluated events that occurred subsequent to March 31, 2017 and through the date the financial statements were issued. Recently Issued Accounting Pronouncements In August 2014, the FASB issued ASU 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 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. |
Going Concern
Going Concern | 3 Months Ended |
Mar. 31, 2017 | |
Going Concern [Abstract] | |
Going Concern | Note 3 – Going Concern 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 March 31, 2017, 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 condensed 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 | 3 Months Ended |
Mar. 31, 2017 | |
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: March 31, 2017 December 31, Computer Equipment $ 219,653 $ 219,653 Furniture and Fixtures 61,803 61,803 281,456 281,456 Less: Accumulated Depreciation (218,928 ) (209,627 ) $ 62,529 $ 71,829 Depreciation expense was $9,301 and $1,395 for the three months ended March 31, 2017 and 2016, respectively. |
Line of Credit
Line of Credit | 3 Months Ended |
Mar. 31, 2017 | |
Line of Credit/Note Payable/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. 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 December 31, 2016 and 2015 was 3.75% and 4.50%, 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 March 31, 2016 and December 31, 2015 was $215,935 and $235,141, respectively. |
Note Payable
Note Payable | 3 Months Ended |
Mar. 31, 2017 | |
Line of Credit/Note Payable/Convertible Note Payable [Abstract] | |
Note Payable | Note 6 –Note Payable On October 24, 2016, the Company entered into a loan agreement (the “Loan Agreement”) with an individual (the “Lender”), pursuant to which on October 24, 2016 (the “Closing Date”), the Lender issued the Company a promissory note of $15,000 (the “Loan”). The maturity date of the Loan is July 1, 2017 (the “Maturity Date”). Pursuant to the Loan Agreement, the Loan bears interest at a rate of 9% per annum. 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 30,000 shares of the Company’s common stock with an exercise price of $0.30 per share (the “Warrant”). The Warrant has a term of five (5) years On October 25, 2016, the Company entered into a loan agreement (the “Loan Agreement”) with an individual (the “Lender”), pursuant to which on October 25, 2016 (the “Closing Date”), the Lender issued the Company a promissory note of $25,000 (the “Loan”). The maturity date of the Loan is July 1, 2017 (the “Maturity Date”). Pursuant to the Loan Agreement, the Loan bears interest at a rate of 9% per annum. 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 50,000 shares of the Company’s common stock with an exercise price of $0.30 per share (the “Warrant”). The Warrant has a term of five (5) years. On February 7, 2017, the Company entered into a loan agreement (the “Loan Agreement”) with an individual (the “Lender”), pursuant to which on October 25, 2016 (the “Closing Date”), the Lender issued the Company a promissory note of $10,000 (the “Loan”). The maturity date of the Loan is May 7, 2017 (the “Maturity Date”). Pursuant to the Loan Agreement, the Loan bears interest at a rate of 10% per annum. 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 10,000 shares of the Company’s common stock with an exercise price of $0.30 per share (the “Warrant”). The Warrant has a term of five (5) years. Private Placement Offering: On February 22, 2017, the Company conducted the initial closing (the “Initial Closing”) of a private placement offering (the “Offering”) of the Company’s securities by entering into a subscription agreement (the “Subscription Agreement”) for gross proceeds of $140,605. On March 17, 2017, the Company conducted the final closing of the Offering by entering into Subscription Agreements with eight accredited investors for additional gross proceeds of $775,980. In the aggregate, the Company entered into Subscription Agreements offering up to $1,000,000 of face value in secured promissory notes with an original issue discount of six percent (6%) and warrants to purchase the Company’s common stock. Pursuant to the Subscription Agreements, the Company issued $975,511 aggregate principal amount of the Notes due on September 1, 2017 and warrants to purchase shares of the Company’s common stock for aggregate gross proceeds of $916,585. The Notes are convertible into shares of the Company’s common stock at the time of Company’s next round of financing (the “Subsequent Offering”) at a price equal to eighty-five percent (85%) of the price per share offered in the Subsequent Offering (the “Conversion Price”). The Warrants have a five-year term. Investors received Warrants in the following amounts: (i) Investors purchasing $150,000 or more of the Offering received a Warrant equal to one hundred thirty percent (130%) of the dollar amount invested in the Offering; (ii) Investors purchasing at least $100,000 but less than $150,000 of the Offering received a Warrant equal to one hundred percent (100%) of the dollar amount invested in the Offering; and (iii) Investors purchasing less than $100,000 of the Offering received to a Warrant equal to seventy percent (70%) of the dollar amount invested in the Offering. The Warrants entitle the holder to purchase shares of the Company’s common stock at $0.20 per share (the “Exercise Price”) . The Conversion Price and the Exercise Price are subject to adjustments for issuances of (i) the Company’s common stock, (ii) any equity linked instruments or (iii) securities convertible into the Company’s common stock, at a purchase price of less than the prevailing Conversion Price or Exercise Price. Such adjustments shall result in the Conversion Price or Exercise Price being reduced to such lower purchase price, as described in the Notes and Warrants. As of March 31, 2017, the total outstanding balance of notes payable was $198,559, net of debt discount of $697,747 and debt issuance costs of $129,203. |
Convertible Note Payable
Convertible Note Payable | 3 Months Ended |
Mar. 31, 2017 | |
Line of Credit/Note Payable/Convertible Note Payable [Abstract] | |
Convertible Note Payable | Note 7 – Convertible Note Payable During the months of November and December 2016, the Company issued convertible notes to third party lenders totaling $400,000. The note accrues interest at 10% per annum and mature with interest and principal both due on November 1, 2017. In addition, the Company issued a warrant to purchase 400,000 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 $0.30 per share for a period of five years from the issue date. On December 27, 2016, the Company issued a convertible note to a third party lender totaling $100,000. The note accrues interest at 10% per annum and matures with interest and principal both due on December 27, 2017. In addition, the Company issued a warrant to purchase 100,000 shares of Company common stock. The note and accrued interest are convertible at a conversion price of $0.30 per share subject to adjustment. 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. As of March 31, 2017, the total outstanding balance of convertible notes payable was $ 271,958, net of debt discount and debt issuance costs of $ 195,066 and $32,976, respectively. |
Related Party Loan
Related Party Loan | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Loan [Abstract] | |
Related Party Loan | Note 8 – 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. On September 12, 2016, the Company entered into a loan agreement (the “Loan Agreement”) with Arthur Rosen, an individual (the “Lender”), pursuant to which on September 12, 2016 (the “Closing Date”), the Lender issued the Company a promissory note of $100,000 (the “Loan”). The original maturity date of the Loan was October 12, 2016 (the “Maturity Date”). Pursuant to the Loan Agreement, the Loan bears interest at a rate of 12% per annum. All outstanding principal, accrued and unpaid interest and other amounts due under the Loan are due on the Maturity Date. On October 12, 2016, the Company entered into an amendment to the note. The note’s Maturity Date was extended 90 days. The Company is currently in payment default. As additional consideration for entering in the Loan Agreement, the Company issued Lender a warrant to purchase 150,000 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. On September 20, 2016, the Company entered into a loan agreement (the “Loan Agreement”) with 202 S Dean LLC, a company partially owned by an officer of the Company, (the “Lender”), pursuant to which on September 20, 2016 (the “Closing Date”), the Lender issued the Company a promissory note of $10,000 (the “Loan”). The maturity date of the Loan is March 20, 2017 (the “Maturity Date”). Pursuant to the Loan Agreement, the Loan bears interest at a rate of 10% per annum. The Company is currently in payment default. As additional consideration for entering in the Loan Agreement, the Company issued Lender a warrant to purchase 235,000 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. On October 13, 2016, the Company entered into a loan agreement (the “Loan Agreement”) with Chris Gordon, an individual (the “Lender”), pursuant to which on October 13, 2016 (the “Closing Date”), the Lender issued the Company a promissory note of $50,000 (the “Loan”). The original maturity date of the Loan was November 12, 2016 (the “Maturity Date”). Pursuant to the Loan Agreement, the Loan bears interest at a rate of 12% per annum. All outstanding principal, accrued and unpaid interest and other amounts due under the Loan are due on the Maturity Date. The Company is currently in payment default. As additional consideration for entering in the Loan Agreement, the Company issued Lender a warrant to purchase 50,000 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. On October 31, 2016, the Company entered into a loan agreement (the “Loan Agreement”) with Arthur Rosen, an individual (the “Lender”), pursuant to which on October 31, 2016 (the “Closing Date”), the Lender issued the Company a promissory note of $10,000 (the “Loan”). The original maturity date of the Loan was November 10, 2016 (the “Maturity Date”). Pursuant to the Loan Agreement, the Loan bears interest at a rate of 10% per annum. All outstanding principal, accrued and unpaid interest and other amounts due under the Loan are due on the Maturity Date. The Company is currently in payment default. As additional consideration for entering in the Loan Agreement, the Company issued Lender a warrant to purchase 10,000 shares of the Company’s common stock with an exercise price of $0.30 per share (the “Warrant”). The Warrant has a term of five (5) years. On December 21, 2016, the Company entered into a loan agreement (the “Loan Agreement”) with Chris Gordon, an individual (the “Lender”), pursuant to which on December 21, 2016 (the “Closing Date”), the Lender issued the Company a promissory note of $275,000 (the “Loan”). The original maturity date of the Loan was January 20, 2017 (the “Maturity Date”). Pursuant to the Loan Agreement, the Loan bears interest at a rate of 10% per annum. All outstanding principal, accrued and unpaid interest and other amounts due under the Loan are due on the Maturity Date. The Company is currently in payment default. As additional consideration for entering in the Loan Agreement, the Company issued Lender a warrant to purchase 166,666 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. On January 25, 2017, the Company entered into a loan agreement (the “Loan Agreement”) with Arthur Rosen, an individual (the “Lender”), pursuant to which on January 25, 2017 (the “Closing Date”), the Lender issued the Company a promissory note of $50,000 (the “Loan”). The maturity date of the Loan is July 1, 2017 (the “Maturity Date”). Pursuant to the Loan Agreement, the Loan bears interest at a rate of 10% per annum. All outstanding principal, accrued and unpaid interest and other amounts due under the Loan are due on the Maturity Date. The Company is currently in payment default. As additional consideration for entering in the Loan Agreement, the Company issued Lender a warrant to purchase 50,000 shares of the Company’s common stock with an exercise price of $0.30 per share (the “Warrant”). The Warrant has a term of five (5) years. On January 26, 2017, the Company entered into a loan agreement (the “Loan Agreement”) with Chris Gordon, an individual (the “Lender”), pursuant to which on January 26, 2017 (the “Closing Date”), the Lender issued the Company a promissory note of $50,000 (the “Loan”). The maturity date of the Loan is November 22, 2017 (the “Maturity Date”). Pursuant to the Loan Agreement, the Loan bears interest at a rate of 10% per annum. All outstanding principal, accrued and unpaid interest and other amounts due under the Loan are due on the Maturity Date. The Company is currently in payment default. As additional consideration for entering in the Loan Agreement, the Company issued Lender a warrant to purchase 50,000 shares of the Company’s common stock with an exercise price of $0.30 per share (the “Warrant”). The Warrant has a term of five (5) years. As of March 31, 2017, the total outstanding balance of related party notes payable was $1,389,441, net of debt discount of $25,559. As of December 31, 2016, the total outstanding balance of related party notes payable was $1,350,325, net of debt discount of $94,675. |
Capital Leases Payable
Capital Leases Payable | 3 Months Ended |
Mar. 31, 2017 | |
Capital Leases Payable [Abstract] | |
Capital Leases Payable | Note 9 – Capital Leases Payable Capital lease obligation consisted of the following: March 31, 2017 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 $ 4,732 $ 4,732 Less current maturities (4,732 ) (3,524 ) Capital lease obligation, net of current maturities - 1,208 TOTAL CAPITAL LEASE OBLIGATION $ 4,732 $ 4,732 The capital leases mature as follows: 2017: $ 3,524 $ 3,524 2018: 1,208 $ 1,208 |
Derivative Liabilities
Derivative Liabilities | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Liabilities [Abstract] | |
Derivative Liabilities | Note 10 – Derivative Liabilities The Company has identified derivative instruments arising from embedded conversion features in the Company’s convertible notes payable and warrants at March 31, 2017. The Company had no financial assets measured at fair value on a recurring basis as of March 31, 2017. The following summarizes the Black-Scholes assumptions used to estimate the fair value of the derivative liability and warrant liability at the date of issuance and for the convertible notes converted during the three months ended March 31, 2017. Low High Annual dividend rate 0 % 0 % Expected life 0.59 0.83 Risk-free interest rate 0.01 % 0.92 % Expected volatility 92.14 % 92.96 % Risk-free interest rate: The Company uses the risk-free interest rate of a U.S. Treasury Note with a similar term on the date of the grant. Dividend yield: The Company uses a 0% expected dividend yield as the Company has not paid dividends to date and does not anticipate declaring dividends in the near future. Volatility: The Company calculates the expected volatility of the stock price based on the corresponding volatility of the Company’s peer group stock price for a period consistent with the warrants’ expected term. Remaining term: The Company’s remaining term is based on the remaining contractual maturity of the warrants. The following are the changes in the derivative liabilities during the three months ended March 31, 2017. Three Months Ended Level 1 Level 2 Level 3 Derivative liabilities as January 1, 2017 $ - $ - $ - Addition - - 1,512,954 Conversion - - Loss on changes in fair value - - (223,767 ) Derivative liabilities as March 31, 2017 $ - $ - $ 1,289,187 |
Stockholders' Deficit
Stockholders' Deficit | 3 Months Ended |
Mar. 31, 2017 | |
Stockholders' Deficit [Abstract] | |
Stockholders' Deficit | Note 10 - 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 $0.001 per share and Ten Million (10,000,000) shall be Preferred Stock, par value $0.001 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 three months ended March 31, 2017, the Company accrued $0 for liquidating damages on the Series A and $0 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 three months ended March 31, 2017, the Company accrued $0 for liquidating damages on the Series B and $0 on the warrants associated with the Series B. During the three months ended March 31, 2017, the Company issued 0 shares of Series B upon conversion of interest totaling $0. Series D Convertible Preferred Stock On January 29, 2016, 2,100,000 shares of preferred stock were designated as Series D Convertible Preferred Stock (“Series D”). 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 D Stated Value"). Holders of shares of Series D shall have the right at any time commencing after the issuance to convert such shares 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 of the Conversion Amount shall equal (i) the sum of (A) the Series D 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 $0.25, 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 Series D Preferred shall not be entitled to a vote on matters submitted to a vote of the stockholders of the Company. Also, as long as any shares of Series D Preferred are outstanding, the Company shall not, without the affirmative vote of all of the Holders of the then outstanding shares of the Series D Preferred, (a) alter or change adversely the powers, preferences or rights given to the Series D Preferred or alter or amend this Certificate of Designation, (b) amend its articles of incorporation or other charter documents in any manner that adversely affects any rights of the Holders, (c) increase the number of authorized shares of Series D Preferred, or (d) enter into any agreement with respect to any of the foregoing. On August 31, 2016, a holder of Series D converted 1,099 shares of Series A into 1,098,933 shares of the Company’s common stock. Common Stock On January 30,2017, the Company issued 2,946,740 shares of its restricted common stock to settle outstanding vendor liabilities of $353,732. In connection with this transaction the company also recorded a loss on settlement of vendor liabilities of $110,674. On February 1, 2017, the Company issued 800,000 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. 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 three months ended March 31, 2017 and December 31, 2016 are as follows: March 31, December 31, Exercise price 0.25-0.40 0.25-0.40 Expected dividends 0 % 0 % Expected volatility 92.14 % 73.44%-90.05 % Risk free interest rate 2.10 % 1%-1.39 % Expected life of option 5 years 4.68-5 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) Balance – December 31, 2016 2,250,000 $ 0.34 4.38 Granted 99,990 $ 0.40 4.96 Exercised - - - Cancelled/Modified (100,000 ) $ 0.40 - Balance – March 31, 2017 – outstanding 2,249,990 $ 0.34 4.38 Balance – March 31, 2017 – exercisable 2,249,990 $ 0.34 4.38 Outstanding options held by related party – March 31, 2017 2,249,990 $ 0.34 4.38 Exercisable options held by related party – March 31, 2017 2,249,990 $ 0.34 4.38 At March 31, 2017, the aggregate intrinsic value of options outstanding and exercisable was $22,976 and $0, respectively. Stock-based compensation for stock options has been recorded in the condensed consolidated statements of operations and totaled $ and $0, for the three months ended March 31, 2016 and 2015, respectively. The following is a summary of the Company’s stock options granted during the year ended March 31, 2017: Options Value Purpose for Grant 99,990 $ 22,976 Service Rendered 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 three months ended March 31, 2017 are as follows: March 31, December 31, 2016 Exercise price $ 0.40-0.20 $ 0.40 Expected dividends 0 % 0 % Expected volatility 92.24-92.96 % 73.44-91.54 % Risk free interest rate 1.93- 2.03 % 1.13%-1.39 % Expected life of warrant years 5 years Warrant Activities The following is a summary of the Company’s warrant activity: Warrants Weighted Average Outstanding – December 31, 2016 15,541,666 $ 0.36 Granted 6,271,615 $ 0.20 Exercised - $ - Forfeited/Cancelled - $ - Outstanding – March 31, 2017 21,813,281 $ 0.36 Exercisable – March 31, 2016 21,813,281 $ 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 $ 0.20 – 0.40 21,813,281 3.93 $ 0.36 21,813,281 $ 0.36 During the three months ended March 31, 2017, a total of 6,161,615 warrants were issued with promissory notes (See Note 6 above). The warrants have a grant date fair value of $771,158 using a Black-Scholes option-pricing model and the above assumptions. During the three months ended March 31, 2017, a total of 0 warrants were issued with convertible notes (See Note 7 above). The warrants have a grant date fair value of $0 using a Black-Scholes option-pricing model and the above assumptions. During the three months ended March 31, 2017, a total of 110,000 warrants were issued with notes payable – related party (See Note 8 above). The warrants have a grant date fair value of $10,195 using a Black-Scholes option-pricing model and the above assumptions. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 11 - 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 May 9, 2017, the Company entered into a Revolving Line of Credit (the “LOC”) with Grawlin, LLC, an LLC controlled by Arthur Rosen, a related party. The LOC is was established for a period of twelve months in which the Company can borrow principal up to $130,000. The LOC bears interest at a rate of 18%. The Company shall repay the LOC and any accrued interest from any net revenue derived from the sale future sales of Guccione artwork and memorabilia as well as certain other products through Everything But The House ("EBTH") based on its auction revenue sharing model, immediately upon receipt (the "EBTH Repayments") used to repay first, any unpaid accrued interest and second, any unpaid principal balance. Failure to pay the EBTH Repayments within 3 business days of receipt shall constitute an Event of Default. On May 12, 2017, in connection with the LOC the Company issued a promissory note in the principal aggregate amount of $56,000 in favor Grawlin, LLC. |
Significant and Critical Acco18
Significant and Critical Accounting Policies and Practices (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
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”) and the rules and regulations of the Securities and Exchange Commission (“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 Form 10-K for the year ended December 31, 2016 filed with the Securities and Exchange Commission (the “ SEC |
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 consolidates all less-than-majority-owned subsidiaries, if any, in which the parent’s power to control exists. As of March 31, 2017, the Company's consolidated subsidiaries and/or entities are as follows: Name of combined affiliate State or other jurisdiction of Company interest Astoria Surgical Supplies North LLC The State of New Jersey 100 % 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 LLC The State of Delaware 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. On May 12, 2017, the Company assigned the right, title and interest to all of the membership interests of the above listed subsidiaries, with the exception of Jerrick Ventures, LLC, to the Company’s Chief Executive Officer, Jeremy Frommer, in consideration for Mr. Frommer’s assumption of all liabilities of such subsidiaries, if any, with such assignment and assumption effected entirely in the interest of corporate efficiency. The Board reviewed the transaction and believes it to be fair in all respects, deeming it to advance the Company’s business interests by allowing the Company to divest non-producing and non-operating subsidiaries at no cost to the Company. All of the Company’s operations have been, and will continue to be, run through its operating subsidiary, Jerrick Ventures LLC. |
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. The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. |
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. 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. 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 $0 as of March 31, 2017 and 2016, respectively, due to slow moving inventory. There was no lower of cost or market adjustments for the reporting period ended March 31, 2017 or 2016. |
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 In accordance with sub-topic 323-10 of the FASB ASC (“Sub-topic 323-10”), the Company accounts for investments in common stock of an investee for which the Company has significant influence in the operating or financial policies even though the Company holds 50% or less of the common stock or in-substance common stock. 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 annually for impairment. |
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. |
Derivative Liability | Derivative Liability The Company evaluates its debt and equity issuances to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with paragraph 815-10-05-4 and Section 815-40-25 of the FASB Accounting Standards Codification. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as either an asset or a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the consolidated statement of operations as other income or expense. Upon conversion, exercise or cancellation of a derivative instrument, the instrument is marked to fair value at the date of conversion, exercise or cancellation and then the related fair value is reclassified to equity. In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date. The Company adopted Section 815-40-15 of the FASB Accounting Standards Codification (“Section 815-40-15”) to determine whether an instrument (or an embedded feature) is indexed to the Company’s own stock. Section 815-40-15 provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions. The Company utilizes an option pricing model to compute the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet date. The Company records the change in the fair value of the derivative as other income or expense in the condensed consolidated statements of operations. |
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 | Stock-Based Compensation The Company recognizes compensation expense for all equity–based payments in accordance with ASC 718 “Compensation – Stock Compensation". Restricted stock awards are granted at the discretion of the Company. These awards are restricted as to the transfer of ownership and generally vest over the requisite service periods, typically over a five year period (vesting on a straight–line basis). The fair value of a stock award is equal to the fair market value of a share of Company stock on the grant date. The fair value of an option award is estimated on the date of grant using the Black–Scholes option valuation model. The Black–Scholes option valuation model requires the development of assumptions that are inputs into the model. These assumptions are the value of the underlying share, the expected stock volatility, the risk–free interest rate, the expected life of the option, the dividend yield on the underlying stock and the expected forfeiture rate. Expected volatility is benchmarked against similar companies in a similar industry over the expected option life and other appropriate factors. Risk–free interest rates are calculated based on continuously compounded risk–free rates for the appropriate term. The dividend yield is assumed to be zero as the Company has never paid or declared any cash dividends on its Common stock and does not intend to pay dividends on its Common stock in the foreseeable future. The expected forfeiture rate is estimated based on management’s best estimate. Determining the appropriate fair value model and calculating the fair value of equity–based payment awards requires the input of the subjective assumptions described above. The assumptions used in calculating the fair value of equity–based payment awards represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and the Company uses different assumptions, our equity–based compensation could be materially different in the future. In addition, the Company is required to estimate the expected forfeiture rate and recognize expense only for those shares expected to vest. If the Company’s actual forfeiture rate is materially different from its estimate, the equity–based compensation could be significantly different from what the Company has recorded in the current period. The Company accounts for share–based payments granted to non–employees in accordance with ASC 505-40, “Equity Based Payments to Non–Employees”. The Company determines the fair value of the stock–based payment as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of either (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete. The fair value of the equity instruments is re-measured each reporting period over the requisite service period. |
Income Taxes | Income Taxes Income taxes are provided in accordance with ASC No. 740, “ Accounting for Income Taxes Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. 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. |
Loss Per Share | Loss Per Share Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, which is the case for the three months ended March 31, 2017 and 2016 presented in these condensed consolidated financial statements, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. The Company had the following common stock equivalents at March 31, 2017 and 2016: March 31, March 31, Options 2,259,090 550,000 Warrants 21,813,281 12,541,667 Totals 24,072,371 13,091,667 |
Subsequent Events | Subsequent Events The Company has evaluated events that occurred subsequent to March 31, 2017 and through the date the financial statements were issued. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In August 2014, the FASB issued ASU 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 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 Acco19
Significant and Critical Accounting Policies and Practices (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 Astoria Surgical Supplies North LLC The State of New Jersey 100 % 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 LLC The State of Delaware 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 |
Schedule of common stock equivalents | March 31, March 31, Options 2,259,090 550,000 Warrants 21,813,281 12,541,667 Totals 24,072,371 13,091,667 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Property and Equipment [Abstract] | |
Summary of property and equipment | March 31, 2017 December 31, Computer Equipment $ 219,653 $ 219,653 Furniture and Fixtures 61,803 61,803 281,456 281,456 Less: Accumulated Depreciation (218,928 ) (209,627 ) $ 62,529 $ 71,829 |
Capital Leases Payable (Tables)
Capital Leases Payable (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Capital Leases Payable [Abstract] | |
Summary of capital lease obligation | March 31, 2017 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 $ 4,732 $ 4,732 Less current maturities (4,732 ) (3,524 ) Capital lease obligation, net of current maturities - 1,208 TOTAL CAPITAL LEASE OBLIGATION $ 4,732 $ 4,732 |
Summary of capital leases maturity | 2017: $ 3,524 $ 3,524 2018: 1,208 $ 1,208 |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Liabilities [Abstract] | |
Schedule of fair value of the derivative liability and warrant liability | Low High Annual dividend rate 0 % 0 % Expected life 0.59 0.83 Risk-free interest rate 0.01 % 0.92 % Expected volatility 92.14 % 92.96 % |
Schedule of changes in derivative liabilities | Three Months Ended Level 1 Level 2 Level 3 Derivative liabilities as January 1, 2017 $ - $ - $ - Addition - - 1,512,954 Conversion - - Loss on changes in fair value - - (223,767 ) Derivative liabilities as March 31, 2017 $ - $ - $ 1,289,187 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Stock Option [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Summary of assumptions used for options and warrants granted | March 31, December 31, Exercise price 0.25-0.40 0.25-0.40 Expected dividends 0 % 0 % Expected volatility 92.14 % 73.44%-90.05 % Risk free interest rate 2.10 % 1%-1.39 % Expected life of option 5 years 4.68-5 years |
Summary of stock option and warrant activity | Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Balance – December 31, 2016 2,250,000 $ 0.34 4.38 Granted 99,990 $ 0.40 4.96 Exercised - - - Cancelled/Modified (100,000 ) $ 0.40 - Balance – March 31, 2017 – outstanding 2,249,990 $ 0.34 4.38 Balance – March 31, 2017 – exercisable 2,249,990 $ 0.34 4.38 Outstanding options held by related party – March 31, 2017 2,249,990 $ 0.34 4.38 Exercisable options held by related party – March 31, 2017 2,249,990 $ 0.34 4.38 |
Summary of stock options granted | Options Value Purpose for Grant 99,990 $ 22,976 Service Rendered |
Warrants [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Summary of assumptions used for options and warrants granted | March 31, December 31, 2016 Exercise price $ 0.40-0.20 $ 0.40 Expected dividends 0 % 0 % Expected volatility 92.24-92.96 % 73.44-91.54 % Risk free interest rate 1.93- 2.03 % 1.13%-1.39 % Expected life of warrant years 5 years |
Summary of stock option and warrant activity | Warrants Weighted Average Outstanding – December 31, 2016 15,541,666 $ 0.36 Granted 6,271,615 $ 0.20 Exercised - $ - Forfeited/Cancelled - $ - Outstanding – March 31, 2017 21,813,281 $ 0.36 Exercisable – March 31, 2016 21,813,281 $ 0.36 |
Summary 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 $ 0.20 – 0.40 21,813,281 3.93 $ 0.36 21,813,281 $ 0.36 |
Significant and Critical Acco24
Significant and Critical Accounting Policies and Practices (Details) | 3 Months Ended |
Mar. 31, 2017 | |
Astoria Surgical Supplies North LLC [Member] | |
Name of combined affiliate | Astoria Surgical Supplies North LLC |
State or other jurisdiction of incorporation or organization | The State of New Jersey |
Company interest | 100.00% |
Castle 6 Productions LLC [Member] | |
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 [Member] | |
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 [Member] | |
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 [Member] | |
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 [Member] | |
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 [Member] | |
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 [Member] | |
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 LLC [Member] | |
Name of combined affiliate | Jerrick Ventures LLC |
State or other jurisdiction of incorporation or organization | The State of Delaware |
Company interest | 100.00% |
Miss Filthy LLC [Member] | |
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 [Member] | |
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 [Member] | |
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 [Member] | |
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 [Member] | |
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 [Member] | |
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 Acco25
Significant and Critical Accounting Policies and Practices (Details 1) | 3 Months Ended |
Mar. 31, 2017 | |
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 Acco26
Significant and Critical Accounting Policies and Practices (Details 2) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Loss Per Share [Line Items] | ||
Common stock equivalents total | 24,072,371 | 13,091,667 |
Options [Member] | ||
Loss Per Share [Line Items] | ||
Common stock equivalents total | 2,259,090 | 550,000 |
Warrant [Member] | ||
Loss Per Share [Line Items] | ||
Common stock equivalents total | 21,813,281 | 12,541,667 |
Significant and Critical Acco27
Significant and Critical Accounting Policies and Practices (Details Textual) - USD ($) | Jan. 02, 2013 | Mar. 31, 2017 | Mar. 31, 2016 |
Significant and Critical Accounting Policies and Practices (Textual) | |||
Inventory markdown charges | $ 0 | $ 0 | |
Investments minority interest | $ 83,333 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 281,456 | $ 281,456 |
Less: Accumulated Depreciation | (218,928) | (209,627) |
Property and equipment, net | 62,528 | 71,829 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 219,653 | 219,653 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 61,803 | $ 61,803 |
Property and Equipment (Detai29
Property and Equipment (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Property and Equipment (Textual) | ||
Depreciation expense | $ 9,301 | $ 9,971 |
Line of Credit (Details)
Line of Credit (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Mar. 19, 2009 | Dec. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2017 | Mar. 31, 2016 | |
Line of Credit (Textual) | |||||
Line of credit maximum outstanding balance | $ 200,000 | ||||
Line of credit facility, expiration date | Mar. 19, 2010 | ||||
Line of credit monthly interest rate during period | 3.75% | 4.50% | |||
Line of credit | $ 235,141 | $ 235,141 | $ 215,935 | $ 215,935 |
Note Payable (Details)
Note Payable (Details) - USD ($) | Mar. 17, 2017 | Feb. 07, 2017 | Feb. 22, 2017 | Oct. 25, 2016 | Oct. 24, 2016 | Mar. 31, 2017 | Dec. 31, 2016 |
Note Payable [Textual] | |||||||
Notes payable, outstanding balance | $ 198,559 | $ 30,579 | |||||
Debt discount | 697,747 | ||||||
Debt issuance costs | $ 129,203 | ||||||
Private Placement Offering [Member] | |||||||
Note Payable [Textual] | |||||||
Gross proceeds of private placement offering | $ 140,605 | ||||||
Private Placement Offering [Member] | Eight Investor [Member] | |||||||
Note Payable [Textual] | |||||||
Gross proceeds of private placement offering | $ 775,980 | ||||||
Loan Agreement [Member] | |||||||
Note Payable [Textual] | |||||||
Promissory note | $ 10,000 | $ 25,000 | $ 15,000 | ||||
Maturity date | May 7, 2017 | Jul. 1, 2017 | Jul. 1, 2017 | ||||
Interest rate | 10.00% | 9.00% | 9.00% | ||||
Warrants purchase of common stock | 10,000 | 50,000 | 30,000 | ||||
Warrant exercisable price per share | $ 0.30 | $ 0.30 | $ 0.30 | ||||
Warrant term | 5 years | 5 years | 5 years | ||||
Loan Agreement [Member] | Private Placement Offering [Member] | |||||||
Note Payable [Textual] | |||||||
Promissory note | $ 1,000,000 | ||||||
Maturity date | Sep. 1, 2017 | ||||||
Interest rate | 6.00% | ||||||
Warrant exercisable price per share | $ 0.20 | ||||||
Aggregate principal amount | $ 975,511 | ||||||
Aggregate gross proceeds of common stock | $ 916,585 | ||||||
Notes conversion description | The Notes are convertible into shares of the Company's common stock at the time of Company's next round of financing (the "Subsequent Offering") at a price equal to eighty-five percent (85%) of the price per share offered in the Subsequent Offering (the "Conversion Price"). The Warrants have a five-year term. Investors received Warrants in the following amounts: (i) Investors purchasing $150,000 or more of the Offering received a Warrant equal to one hundred thirty percent (130%) of the dollar amount invested in the Offering; (ii) Investors purchasing at least $100,000 but less than $150,000 of the Offering received a Warrant equal to one hundred percent (100%) of the dollar amount invested in the Offering; and (iii) Investors purchasing less than $100,000 of the Offering received to a Warrant equal to seventy percent (70%) of the dollar amount invested in the Offering. |
Convertible Note Payable (Detai
Convertible Note Payable (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Dec. 27, 2016 | Nov. 30, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Convertible Note Payable (Textual) | |||||
Warrants issued | 24,072,371 | 13,091,667 | |||
Convertible Notes Payable outstanding balance | $ 271,958 | ||||
Debt discount | 195,066 | ||||
Debt issuance costs | $ 32,976 | ||||
Convertible note to third party lender [Member] | |||||
Convertible Note Payable (Textual) | |||||
Convertible note | $ 100,000 | $ 400,000 | $ 400,000 | ||
Interest rate | 10.00% | 10.00% | 10.00% | ||
Maturity date | Dec. 27, 2017 | Nov. 1, 2017 | Nov. 1, 2017 | ||
Warrants issued | 100,000 | 400,000 | 400,000 | ||
Conversion price per share | $ 0.30 | ||||
Warrant purchase price | $ 0.40 | $ 0.30 | $ 0.30 | ||
Warrant term | 5 years | 5 years | 5 years |
Related Party Loan (Details)
Related Party Loan (Details) - USD ($) | Dec. 21, 2016 | Oct. 31, 2016 | Oct. 13, 2016 | Sep. 12, 2016 | Jan. 26, 2017 | Jan. 25, 2017 | Sep. 20, 2016 | May 26, 2016 | Mar. 31, 2017 | Dec. 31, 2016 |
Related Party Loan (Textual) | ||||||||||
Related party notes payable | $ 1,389,441 | $ 1,350,325 | ||||||||
Debt discount | $ 25,559 | $ 94,675 | ||||||||
Arthur Rosen [Member] | ||||||||||
Related Party Loan (Textual) | ||||||||||
Secured debt | $ 10,000 | $ 100,000 | $ 50,000 | $ 1,000,000 | ||||||
Interest rate | 10.00% | 12.00% | 10.00% | 12.50% | ||||||
Warrant term | 5 years | 5 years | 5 years | 5 years | ||||||
Warrants issued to purchase shares | 10,000 | 150,000 | 50,000 | 1,000,000 | ||||||
Warrant exercise price | $ 0.30 | $ 0.40 | $ 0.30 | $ 0.40 | ||||||
Maturity date | Nov. 10, 2016 | Oct. 12, 2016 | Jul. 1, 2017 | May 26, 2017 | ||||||
202 S Dean LLC [Member] | ||||||||||
Related Party Loan (Textual) | ||||||||||
Secured debt | $ 10,000 | |||||||||
Interest rate | 10.00% | |||||||||
Warrant term | 5 years | |||||||||
Warrants issued to purchase shares | 235,000 | |||||||||
Warrant exercise price | $ 0.40 | |||||||||
Maturity date | Mar. 20, 2017 | |||||||||
Chris Gordon [Member] | ||||||||||
Related Party Loan (Textual) | ||||||||||
Secured debt | $ 275,000 | $ 50,000 | $ 50,000 | |||||||
Interest rate | 10.00% | 12.00% | 10.00% | |||||||
Warrant term | 5 years | 5 years | 5 years | |||||||
Warrants issued to purchase shares | 166,666 | 50,000 | 50,000 | |||||||
Warrant exercise price | $ 0.40 | $ 0.40 | $ 0.30 | |||||||
Maturity date | Jan. 20, 2017 | Nov. 12, 2016 | Nov. 22, 2017 |
Capital Leases Payable (Details
Capital Leases Payable (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
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 | $ 4,732 | $ 4,732 |
Less current maturities | (4,732) | (3,524) |
Capital lease obligation, net of current maturities | 1,208 | |
TOTAL CAPITAL LEASE OBLIGATION | $ 4,732 | $ 4,732 |
Capital Leases Payable (Detai35
Capital Leases Payable (Details 1) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Capital Leases Payable [Abstract] | ||
2,017 | $ 3,524 | $ 3,524 |
2,018 | $ 1,208 | $ 1,208 |
Capital Leases Payable (Detai36
Capital Leases Payable (Details Textual) | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Capital Leases Payable (Textual) | |
Capital leases due amount | $ 383.10 |
Capital leases interest per annum | 10.00% |
Capital lease obligation term | 5 years |
Derivative Liabilities (Details
Derivative Liabilities (Details) | 3 Months Ended |
Mar. 31, 2017 | |
Schedule of fair value of the derivative liability and warrant liability (Line Items) | |
Annual dividend rate | 0.00% |
Low [Member] | Derivative Liabilities [Member] | |
Schedule of fair value of the derivative liability and warrant liability (Line Items) | |
Annual dividend rate | 0.00% |
Expected life | 7 months 2 days |
Risk-free interest rate | 0.01% |
Expected volatility | 92.14% |
High [Member] | Derivative Liabilities [Member] | |
Schedule of fair value of the derivative liability and warrant liability (Line Items) | |
Annual dividend rate | 0.00% |
Expected life | 9 months 29 days |
Risk-free interest rate | 0.92% |
Expected volatility | 92.96% |
Derivative Liabilities (Detai38
Derivative Liabilities (Details 1) | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Level 1 [Member] | |
Schedule of changes in derivative liabilities (Line Items) | |
Derivative liabilities as January 1, 2017 | |
Addition | |
Conversion | |
Loss on changes in fair value | |
Derivative liabilities as March 31, 2017 | |
Level 2 [Member] | |
Schedule of changes in derivative liabilities (Line Items) | |
Derivative liabilities as January 1, 2017 | |
Addition | |
Conversion | |
Loss on changes in fair value | |
Derivative liabilities as March 31, 2017 | |
Level 3 [Member] | |
Schedule of changes in derivative liabilities (Line Items) | |
Derivative liabilities as January 1, 2017 | |
Addition | 1,512,954 |
Conversion | |
Loss on changes in fair value | (223,767) |
Derivative liabilities as March 31, 2017 | $ 1,289,187 |
Derivative Liabilities (Detai39
Derivative Liabilities (Details Textual) | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Instruments Disclosure Textual [Abstract] | |
Dividend yield | 0.00% |
Stockholders' Deficit (Details)
Stockholders' Deficit (Details) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Expected dividends | 0.00% | |
Stock Options [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Expected dividends | 0.00% | 0.00% |
Expected volatility | 92.14% | |
Risk free interest rate | 2.10% | |
Expected life of option | 5 years | |
Stock Options [Member] | Minimum [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Exercise price | $ 0.25 | $ 0.25 |
Expected volatility | 73.44% | |
Risk free interest rate | 1.00% | |
Expected life of option | 4 years 8 months 5 days | |
Stock Options [Member] | Maximum [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Exercise price | $ 0.40 | $ 0.40 |
Expected volatility | 90.05% | |
Risk free interest rate | 1.39% | |
Expected life of option | 5 years |
Stockholders' Deficit (Details
Stockholders' Deficit (Details 1) - Stock Option [Member] - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Options/Warrant, Outstanding | 2,250,000 | |
Options, Granted | 99,990 | |
Options, Exercised | ||
Options, Cancelled/Modified | (100,000) | |
Options/Warrant, Outstanding | 2,249,990 | 2,250,000 |
Options, Exercisable | 2,249,990 | |
Outstanding options held by related party | 2,249,990 | |
Exercisable options held by related party | 2,249,990 | |
Weighted Average Exercise Price, Outstanding | $ 0.34 | |
Weighted Average Exercise Price, Granted | 0.40 | |
Weighted Average Exercise Price, Exercised | ||
Weighted Average Exercise Price Cancelled/Modified | 0.40 | |
Weighted Average Exercise Price, Outstanding | 0.34 | $ 0.34 |
Weighted Average Exercise Price, Exercisable | 0.34 | |
Weighted Average Exercise Price Outstanding options held by related party | 0.34 | |
Weighted Average Exercise Price Exercisable options held by related party | $ 0.34 | |
Weighted Average Remaining Contractual Life (in years), Outstanding | 4 years 4 months 17 days | 4 years 4 months 17 days |
Weighted Average Remaining Contractual Life (in years), Granted | 4 years 11 months 16 days | |
Weighted Average Remaining Contractual Life (in years), Exercisable | 4 years 4 months 17 days | |
Weighted Average Remaining Contractual Life (in years), Outstanding options held by related party | 4 years 4 months 17 days | |
Weighted Average Remaining Contractual Life (in years), Exercisable options held by related party | 4 years 4 months 17 days |
Stockholders' Deficit (Detail42
Stockholders' Deficit (Details 2) | 3 Months Ended |
Mar. 31, 2017USD ($)shares | |
Stockholders' Deficit [Abstract] | |
Options | shares | 99,990 |
Value | $ | $ 22,976 |
Purpose for Grant | Service Rendered |
Stockholders' Deficit (Detail43
Stockholders' Deficit (Details 3) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Expected dividends | 0.00% | |
Warrants [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Exercise price | $ 0.40 | |
Expected dividends | 0.00% | 0.00% |
Expected volatility, minimum | 92.24% | 73.44% |
Expected volatility, maximum | 92.96% | 91.54% |
Risk free interest rate, minimum | 1.93% | 1.13% |
Risk free interest rate, maximum | 2.03% | 1.39% |
Expected life of warrant | 5 years | |
Warrants [Member] | Minimum [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Exercise price | $ 0.20 | |
Warrants [Member] | Maximum [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Exercise price | $ 0.40 |
Stockholders' Deficit (Detail44
Stockholders' Deficit (Details 4) - Warrants [Member] | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Options/Warrant, Outstanding | shares | 15,541,666 |
Warrants, Granted | shares | 6,271,615 |
Warrants, Exercised | shares | |
Warrants, Cancelled/Modified | shares | |
Options/Warrant, Outstanding | shares | 21,813,281 |
Warrants, Exercisable | shares | 21,813,281 |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 0.36 |
Weighted Average Exercise Price, Granted | $ / shares | 0.20 |
Weighted Average Exercise Price, Exercised | $ / shares | |
Weighted Average Exercise Price, Forfeited/Cancelled | $ / shares | |
Weighted Average Exercise Price, Outstanding | $ / shares | 0.36 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 0.36 |
Stockholders' Deficit (Detail45
Stockholders' Deficit (Details 5) - Warrant [Member] - $ / shares | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Warrants Outstanding, Exercise price, Minimum | $ 0.20 | |
Warrants Outstanding, Exercise price, Maximum | $ 0.40 | |
Warrants Outstanding, Number Outstanding | 21,813,281 | 15,541,666 |
Warrants Outstanding, Weighted Average Remaining Contractual Life (in years) | 3 years 11 months 5 days | |
Warrants Outstanding, Weighted Average Exercise Price | $ 0.36 | $ 0.36 |
Warrants Exercisable , Number Exercisable | 21,813,281 | |
Warrants Exercisable, Weighted Average Exercise Price | $ 0.36 |
Stockholders' Deficit (Detail46
Stockholders' Deficit (Details Textual) - USD ($) | Feb. 01, 2017 | Feb. 13, 2015 | Jan. 30, 2017 | Aug. 31, 2016 | Jan. 29, 2016 | Dec. 21, 2015 | Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2016 |
Stockholders' Deficit (Textual) | |||||||||||
Preferred stock, shares authorized | 100,000,000 | 100,000,000 | |||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | |||||||||
Common stock, shares authorized | 300,000,000 | 300,000,000 | |||||||||
Common stock, par value | $ 0.001 | $ 0.001 | |||||||||
Common stock, shares issued | 37,701,322 | 33,894,582 | |||||||||
Common stock, shares outstanding | 37,701,322 | 33,894,582 | |||||||||
Convertible preferred stock, Shares | 1,098,933 | ||||||||||
Aggregate intrinsic value of options outstanding | $ 22,976 | ||||||||||
Aggregate intrinsic value of options exercisable | 0 | ||||||||||
Stock-based compensation for stock options | $ 0 | $ 0 | |||||||||
Loss on settlement of vendor liabilities | $ 110,674 | ||||||||||
Promissory Notes [Member] | |||||||||||
Stockholders' Deficit (Textual) | |||||||||||
Warrants issued | 6,161,615 | ||||||||||
Warrants grant date fair value | $ 771,158 | ||||||||||
Convertible Notes Payable [Member] | |||||||||||
Stockholders' Deficit (Textual) | |||||||||||
Warrants issued | 0 | ||||||||||
Warrants grant date fair value | $ 0 | ||||||||||
Notes Payable Related Party [Member] | |||||||||||
Stockholders' Deficit (Textual) | |||||||||||
Warrants issued | 110,000 | ||||||||||
Warrants grant date fair value | $ 10,195 | ||||||||||
Common Stock [Member] | |||||||||||
Stockholders' Deficit (Textual) | |||||||||||
Restricted stock issued during period | 800,000 | 2,946,740 | |||||||||
Settlement of vendor liabilities | $ 353,732 | ||||||||||
Loss on settlement of vendor liabilities | $ 110,674 | ||||||||||
Series A Preferred Stock [Member] | |||||||||||
Stockholders' Deficit (Textual) | |||||||||||
Series A Preferred stock issued with warrants, shares | 24,400 | ||||||||||
Preferred stock, par value | $ 100 | $ 0.001 | $ 0.001 | ||||||||
Preferred stock, shares issued | 33,414 | 33,314 | |||||||||
Preferred stock, shares outstanding | 33,414 | 33,314 | |||||||||
Convertible notes | $ 91,400 | ||||||||||
Convertible preferred stock, Shares | 100,000 | 8,914 | |||||||||
Aggregate intrinsic value of options outstanding | $ 2,450,000 | ||||||||||
Aggregate intrinsic value of options exercisable | $ 800,000 | ||||||||||
Accrued for liquidating damages | $ 0 | ||||||||||
Warrants associated value | $ 0 | ||||||||||
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) | |||||||||||
Series B Preferred stock issued with warrants, shares | 7,000 | ||||||||||
Preferred stock, par value | $ 100 | $ 0.001 | $ 0.001 | ||||||||
Preferred stock, shares issued | 8,063 | 7,000 | |||||||||
Preferred stock, shares outstanding | 8,063 | 7,000 | |||||||||
Convertible preferred stock, Shares | 20,000 | ||||||||||
Proceeds from the issuance of stock | $ 700,000 | ||||||||||
Accrued for liquidating damages | $ 0 | ||||||||||
Warrants associated value | $ 0 | ||||||||||
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% | ||||||||||
Conversion of interest to series B preferred stock, shares | 0 | ||||||||||
Conversion of interest to series B preferred stock | $ 0 | ||||||||||
Series D Convertible Preferred Stock [Member] | |||||||||||
Stockholders' Deficit (Textual) | |||||||||||
Preferred stock, par value | $ 100 | ||||||||||
Convertible preferred stock, Shares | 1,099 | 2,100,000 | |||||||||
Conversion price | $ 0.25 | ||||||||||
Beneficial ownership by holder and affiliates | 4.99% | ||||||||||
Preferred Stock [Member] | |||||||||||
Stockholders' Deficit (Textual) | |||||||||||
Preferred stock, shares authorized | 10,000,000 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - USD ($) | May 12, 2017 | May 09, 2017 |
Arthur Rosen [Member] | ||
Subsequent Events (Textual) | ||
Borrow principal of line of credit facility | $ 130,000 | |
LOC bears interest at a rate | 18.00% | |
Grawlin LLC [Member] | ||
Subsequent Events (Textual) | ||
Principal aggregate amount | $ 56,000 |