Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 07, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | TAUTACHROME INC. | |
Entity Central Index Key | 1,389,067 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 1,702,937,967 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,018 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash | $ 220,725 | $ 9,726 |
Total current assets | 220,725 | 9,726 |
TOTAL ASSETS | 220,725 | 9,726 |
LIABILITIES | ||
Accounts payable and accrued expenses | 391,740 | 356,213 |
Accounts payable - related party | 15,261 | 15,515 |
Loans from related parties | 99,692 | 100,033 |
Convertible notes payable - related party | 102,990 | 101,160 |
Short-term convertible notes payable, net | 822,671 | 705,303 |
Notes payable in default | 84,148 | 103,298 |
Short-term notes payable | 16,897 | 17,191 |
Derivative liability | 1,398,184 | |
Court judgment liability | 54,000 | 54,000 |
Total current liabilities | 2,985,583 | 1,452,713 |
Long-term convertible notes payable, net | 887 | 5,413 |
Total non-current liabilities | 887 | 5,413 |
TOTAL LIABILITIES | 2,986,470 | 1,458,126 |
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Common stock, $0.00001 par value. Four billion shares authorized. 1,702,937,967 and 1,685,941,636 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively | 17,030 | 16,860 |
Additional paid in capital | 4,024,190 | 3,787,675 |
Common stock payable | 44,606 | 23,186 |
Accumulated deficit | (6,883,198) | (5,293,041) |
Effect of foreign currency exchange | 30,247 | 15,540 |
TOTAL STOCKHOLDERS' EQUITY | (2,765,745) | (1,448,400) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 220,725 | 9,726 |
Preferred Stock Series D | ||
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Preferred stock value | $ 1,380 | $ 1,380 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
STOCKHOLDERS' DEFICIT | ||
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 4,000,000,000 | 4,000,000,000 |
Common stock, shares issued | 1,702,937,967 | 1,685,941,636 |
Common stock, shares outstanding | 1,702,937,967 | 1,685,941,636 |
Preferred Stock Series D | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 13,795,104 | 13,795,104 |
Preferred stock, shares issued | 13,795,104 | 13,795,104 |
Preferred stock, shares outstanding | 13,795,104 | 13,795,104 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
OPERATING EXPENSES | ||
General and administrative | $ 307,425 | $ 130,936 |
Total operating expenses | 307,425 | 130,936 |
Operating loss | (307,425) | (130,936) |
OTHER INCOME / (EXPENSE) | ||
Interest expense | (579,947) | (57,067) |
Change in value of derivatives | (702,785) | |
Total other | (1,282,732) | (57,067) |
Net loss | (1,590,157) | (188,003) |
OTHER COMPREHENSIVE INCOME (LOSS) | ||
Effect of foreign currency exchange | 14,707 | (47,973) |
Net comprehensive loss | $ (1,575,450) | $ (235,976) |
Net loss per common share, basic and diluted | $ 0 | $ 0 |
Weighted average shares outstanding, basic and diluted | 1,696,249,730 | 1,678,454,221 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY / (DEFICIT) (Unaudited) - USD ($) | Common Stock | Preferred Stock Series D | Additional Paid-In Capital | Stock Payable | Other Comprehensive Income (Loss) | Accumulated Deficit | Total |
Beginning Balance, Shares at Dec. 31, 2016 | 1,672,789,717 | 13,795,104 | |||||
Beginning Balance, Amount at Dec. 31, 2016 | $ 16,728 | $ 1,380 | $ 3,421,595 | $ 10,586 | $ 82,748 | $ (7,081,154) | $ (3,548,117) |
Shares issued for conversion of debt, Shares | 8,493,243 | ||||||
Shares issued for conversion of debt, Amount | $ 85 | 54,080 | 54,165 | ||||
Shares issued for services, Shares | 6,700,000 | ||||||
Shares issued for services, Amount | $ 67 | 84,262 | 84,329 | ||||
Shares retired from consultant, Shares | (2,041,324) | ||||||
Shares retired from consultant, Amount | $ (20) | 20 | |||||
Shares earned by consultant | 12,600 | 12,600 | |||||
Beneficial conversion feature of convertible notes | 209,040 | 209,040 | |||||
Imputed interest | 18,678 | 18,678 | |||||
Effect of foreign currency exchange | (67,208) | (67,208) | |||||
Net Income/Loss | 1,788,113 | 1,788,113 | |||||
Ending Balance, Shares at Dec. 31, 2017 | 1,685,941,636 | 13,795,104 | |||||
Ending Balance, Amount at Dec. 31, 2017 | $ 16,860 | $ 1,380 | 3,787,675 | 23,186 | 15,540 | (5,293,041) | (1,448,400) |
Shares issued with convertible note payable, Shares | 15,000,000 | ||||||
Shares issued with convertible note payable, Amount | $ 150 | 127,350 | 127,500 | ||||
Shares issued for conversion of debt, Shares | 1,996,331 | ||||||
Shares issued for conversion of debt, Amount | $ 20 | 11,135 | 11,155 | ||||
Derivative associated with early debt retirement | 93,280 | 93,280 | |||||
Shares earned by consultant | 21,420 | 21,420 | |||||
Imputed interest | 4,750 | 4,750 | |||||
Effect of foreign currency exchange | 14,707 | 14,707 | |||||
Net Income/Loss | (1,590,157) | (1,590,157) | |||||
Ending Balance, Shares at Mar. 31, 2018 | 1,702,937,967 | 13,795,104 | |||||
Ending Balance, Amount at Mar. 31, 2018 | $ 17,030 | $ 1,380 | $ 4,024,190 | $ 44,606 | $ 30,247 | $ (6,883,198) | $ (2,765,745) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Loss | $ (1,590,157) | $ (188,003) |
Stock-based compensation | 21,420 | 79,215 |
Change in fair value of derivative | 702,785 | |
Amortization of discounts on notes payable | 534,430 | 21,286 |
Imputed interest | 4,750 | 960 |
Changes in operating assets and liabilities: | ||
Accounts payable and accrued expenses | 25,384 | 104,510 |
Accounts payable - related party | 488 | |
Net cash used in operating activities | (301,388) | 18,456 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Net cash used in investing activities | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from convertible notes payable | 593,000 | 26,040 |
Principal payments on notes payable | (97,150) | (1,801) |
Proceeds from related-party loan | 1,830 | 10,151 |
Principal payments on related-party loans | (1,000) | |
Net cash provided by financing activities | 497,680 | 33,390 |
Effect of exchange rate changes on cash and cash equivalents | 14,707 | (47,973) |
Net increase/(decrease) in cash | 210,999 | 3,873 |
Cash and equivalents - beginning of period | 9,726 | 1,850 |
Cash and equivalents - end of period | 220,725 | 5,723 |
SUPPLEMENTARY INFORMATION | ||
Cash paid for interest | 2,720 | 549 |
Cash paid for income taxes | ||
SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING TRANSACTIONS | ||
Discounts on convertible notes | 664,688 | 22,040 |
Conversion of debt to common stock | 11,155 | 54,165 |
Settlement of derivative liability | $ 93,280 |
Organization and Nature of Busi
Organization and Nature of Business | 3 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
Note 1 - Organization and Nature of Business | History Tautachrome, Inc. (formerly Roadships Holdings, Inc.) was formed in Delaware on June 5, 2006 as Caddystats, Inc. and hereinafter collectively referred to as Tautachrome, the Company, we or us). The Company adopted the accounting acquirers year end, December 31. Our Business Tautachrome operates in the internet applications space, a large space we believe to be uniquely able to make possible fast growing and novel business. The iPhone, Google, Facebook, Amazon, Twitter, Android, Uber and numerous other examples are reminders of the ability of the internet applications space to surprise us with new business universes out of nowhere. A recent surprise was the arrival in the internet applications space of blockchain technology, which is empowering enterprises of all sizes to create ecosystems of trade based on self-introduced and globally useable cryptocurrencies. The arrival of blockchain technology has added a significant new and leading element to Tautachromes business plans and activities. Tautachrome is currently pursuing two main avenues of business activity based on our patented imaging technology (branded KlickZie 1. KlickZies blockchain cryptocurrency based ecosystem: 2. KlickZie technology-based business |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
Note 2 - Basis of Presentation and Summary of Significant Accounting Policies | Consolidated Financial Statements In the opinion of management, the accompanying financial statements includes all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows for the period ending March 31, 2018. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with information included in our audited financial statements for the period ended December 31, 2017, as reported in Form 10-K filed with the Securities and Exchange Commission. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company's system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented. Principles of Consolidation Our consolidated financial statements include the accounts of Tautachrome, Inc. and all majority-owned subsidiaries. All significant inter-company accounts and transactions are eliminated in consolidation. Long-Lived Assets, Intangible Assets and Impairment In accordance with U.S. GAAP, the Companys long-lived assets and amortizable intangible assets are tested for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. The Company assesses the recoverability of such assets by determining whether their carrying value can be recovered through undiscounted future operating cash flows, including its estimates of revenue driven by assumed market segment share and estimated costs. If impairment is indicated, the Company measures the amount of such impairment by comparing the fair value to the carrying value. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Net Loss Per Share Basic and diluted net loss per share calculations are calculated on the basis of the weighted average number of common shares outstanding during the year. The per share amounts include the dilutive effect of common stock equivalents in years with net income. Basic and diluted loss per share is the same for the three months ended March 31, 2018 and 2017 as the effect of our potential common stock equivalents would be anti-dilutive. Recent Accounting Pronouncements In January 2017, the FASB issued ASU 201701, Business Combinations (Topic 805); Clarifying the Definition of a Business In July 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 201711, Earnings Per Share Distinguishing Liabilities from Equity Derivatives and Hedging DebtDebt with Conversion and Other Options The adoption of these standards is not expected to have a material impact on our financial position or results of operations. |
Going Concern
Going Concern | 3 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
Note 3 - Going Concern | We have not begun our core operations in the technology industry and have not yet acquired the assets to enter this markets and we will require additional capital to do so. There is no guarantee that we will acquire the capital to procure the assets to enter this market or, upon doing so, that we will generate positive cash flows from operations. Substantial doubt exists as to Tautachromes ability to continue as a going concern. No adjustment has been made to these financial statements for the outcome of this uncertainty. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
Note 4 - Related Party Transactions | For the year ended December 31, 2017, we had the following transactions with the Twenty Second Trust (the "Trust"), the trustee of whom is Sonny Nugent, the son of our major shareholder and former Chief Executive Officer, Micheal Nugent: · We accrued $4,924 in interest payable to the Trust and paid $0 of interest for both years. · The outstanding balance at December 31, 2017 to the 22 nd For the three months ended March 31, 2018, we accrued $1,233 to the 22 nd According to our agreement with Mr. Nugent, we accrue interest on all unpaid amounts at 5%. Principal and interest are callable at any time. If principal and interest are called and not repaid, the loan is considered in default after which interest is accrued at 10%. Convertible note payable, related party On May 5, 2013 (and on August 8, 2013 with an enlargement amendment) the Company entered into a no interest demand-loan agreement with our current Chairman, Jon N. Leonard under which the Company may borrow such money from Jon as Jon in his sole discretion is willing to loan. The terms of the note provide that at the Companys option, the Company may make repayments in stock, at a fixed share price of $1.00 per share. Also, because this loan is a no-interest loan an imputed interest expense of $2,019 was recorded as additional paid-in capital for the three months ended March 31, 2018. The Company evaluated Dr. Leonards note for the existence of a beneficial conversion feature and determined that none existed. During the three months ended March 31, 2018, Dr. Leonard paid $1,830 of company expenses and this amount is included in our loan to him. At March 31, 2018, we owed Dr. Leonard $102,990. |
Capital
Capital | 3 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
Note 5 - Capital | During the year ended December 31, 2017, we issued 8,493,243 common shares to convert $49,249 of convertible notes payable, and $4,916 in accrued interest, to common stock. Also during the year ended December 31, 2017, we issued 6,700,000 common shares to four consultants for services. We valued the shares at their grant date fair values, charging general and administrative expenses with $84,329. On October 5, 2017, we received 2,041,324 shares back into the treasury from a consultant. These shares were gifted to the consultant by a major shareholder. We recorded the receipt of these shares at par value. On October 16, 2017, we signed a consulting agreement to aide us in developing our blockchain-based cryptotokens in five stages, with 700,000 shares accruing at the completion of each stage. Phase 1 was completed on December 12, 2017. We therefore accrued those 700,000 shares at the date they were earned, charging general and administrative expense $12,600. Additionally, Phases 2 and 3 were completed on January 16, 2018 and February 26, 2018, respectively. During the three months ended March 31, 2018, we accrued an additional 140,000 shares, charging general and administrative expenses with $21,420. During the three months ended March 31, 2018, we issued 1,996,331 shares in conversion of an outstanding convertible promissory note. We recorded a reduction of the balance of this note of $10,000 and $1,155 of principal and interest, respectively. We recognized no gain or loss on their conversions as they were converted within the terms of conversion. Also during the three months ended March 31, 2018, we issued 15,000,000 shares as an equity incentive to a creditor (see Note 6) . We valued the shares at their grant-date fair values and recorded a discount on that debt of $127,500. Preferred Stock On September 29, 2016, the Companys principal shareholders (Principals), Dr. Jon N. Leonard, Micheal P. Nugent, and Matthew W. Staker, offered to retire 1,379,510,380 of their common shares in exchange for a new series of non-trading preferred shares. On October 5, 2016, the Board of Directors voted to accept the share retirement offer, and on October 20, 2016, the Company filed a Certificate of Designations with the State of Delaware creating 13,795,104 shares of Series D Preferred Stock (the Preferred Shares) to effect the exchange. Share Exchange ratio and Preservation of Voting Rights In the share exchange, each principal received 1 Preferred Share for each 100 common shares retired. Each share of Preferred Shares entitles the holder to 100 votes (and each 1/100 th Conversion Rights A holder may convert Preferred Shares to common under the following conditions: Automatic conversion each Preferred Share automatically converts to 100 common shares upon the earlier of · The end of 5 years (5:00 PM EST, October 5, 2021), or · A change of control Optional conversion - After October 5, 2017, each holder may convert each share into 100 shares of common stock immediately following a period of ten consecutive trading days during which the average closing or last sale price exceeds $3.00 per share. Also, each holder may convert into 110 shares of common stock at any time that the shares are listed on a National exchange (for example, the NYSE or NASDAQ). Imputed Interest Certain of our promissory notes bear no nominal interest. We therefore imputed interest expense and increase Additional Paid in Capital. For the three months ended March 31, 2018, we imputed $4,750 of such interest. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
Note 6 - Debt | Loans from related parties As is discussed in Note 4, at March 31, 2018 we owed $219,902 in related-party debts consisting of $99,692 and $17,220 in unpaid principal and interest, respectively, to the 22 nd Convertible notes payable During the year ended December 31, 2017 we issued seven convertible promissory notes in the aggregate amount of $213,040, receiving proceeds therefrom of the same amount. These convertible notes can convert to common stock at various prices. We evaluated these convertible notes for beneficial conversion features and calculated a collective value of $209,040 which we are accounting for as debt discounts. During the year ended December 31, 2017, we amortized $138,668 of debt discounts to interest expense. Also during the year ended December 31, 2017, we converted two outstanding convertible notes payable to common stock, reducing principal owed by $49,249. At December 31, 2017, $95,798 of our convertible notes payable were in default. On December 27, 2017, we issued a convertible promissory note which was not funded until January 2, 2018. The note nominal amount was $78,000 and we received proceeds of $75,000, recording an original issue discount in the amount of $3,000. The note matures on September 30, 2018 and bears interest at 12% with any unpaid interest and principal at maturity bearing interest at 22%. The note could be converted at 58% of the lowest two trading prices during the twenty days prior to conversion. We initially recorded a discount on this note in the amount of $95,816 which included the $3,000 original issue discount and an initial derivative of $92,816 (see Derivative section below), but immediately amortized $17,816 to interest expense. This note allowed the debtor certain prepayment rights, but incurring an interest penalty upon doing so. On February 14, 2018, we paid $94,923 to the creditor to pay this note in its entirety. During the period from issuance to retirement, we accrued $1,118 in interest and, upon paying the note, incurred additional interest expense of $15,805. On February 1, 2018, we issued a promissory note in the amount of $60,000 and received $58,000 in proceeds, recording an original issue discount in the amount of $2,000. The note matures on February 1, 2019 and bears interest at 12%, with any unpaid principal and interest at maturity bearing interest at 18%. At any time 180 days after the issuance (or June 30, 2018) the lender may convert at a 40% discount of the three lowest trading prices during the previous twenty trading days prior to the notice of conversion. We initially recorded a discount on this note in the amount of $68,286 including the $2,000 original issue discount and an initial derivative of $66,286 (see Derivative section below), but immediately amortized $8,286 to interest expense. During the three months ended March 31, 2018, we amortized an additional $10,000 of this discount to interest expense. Additionally, during the three months ended March 31, 2018, we accrued $1,034 of nominal interest. The Company has certain prepayment rights and may prepay any outstanding interest or principal at the following rates: 0-90 days, 135%; 91-180 days:150%. On February 12, 2018, we issued a promissory note in the amount of $55,125 and received proceeds of $50,000, recording an original issue discount in the amount of $5,125 . The note matures on February 5, 2019 and bears interest at 8%, with any unpaid principal and interest at maturity bearing interest at 16%. The lender may convert any outstanding principal and interest at 60% of the lowest trading price for twenty days prior to the notice of conversion. We initially recorded a discount on this note in the amount of $72,868 including the $5,125 original issue discount and an initial derivative of $67,743 (see Derivative section below), but immediately amortized $17,743 to interest expense. During the three months ended March 31, 2018, we amortized an additional $11,694 of this discount to interest expense. Additionally, during the three months ended March 31, 2018, we accrued $645 of nominal interest. The Company has prepayment rights as follows: Days % 1-30 115 % 31-60 120 % 61-90 125 % 91-120 130 % 121-150 135 % 151-180 140 % On February 7, 2018, we issued a convertible promissory note in the amount of $465,000. The first tranche of proceeds in the amount of $220,000 was received on February 12, 2018. The agreement calls for proceeds, original issue discounts and nominal liabilities as follows: Proceeds Original Issue Discount Total Nominal Liability Tranche 1 220,000 41,563 261,563 Future tranche(s) 180,000 23,438 203,438 Total 400,000 65,000 465,000 The note matures nine months from the date of payment of each tranche (thus, the maturity date for the first tranche is May 13, 2018). The note bears interest at 6%, with any unpaid principal and interest at maturity bearing interest at 18%. After 180 days, the lender has the right to convert any and all principal and interest to common stock at 65% of the lowest trading price over the twenty trading days prior to the notice of conversion. At any time during default, the lender may apply an additional market discount of 15%. We originally recorded a discount on this note of $446,400 consisting of the original issue discount of $41,563, the initial derivative (see Derivative section below) of $277,337, and an equity incentive of $127,500 in the form of 15,000,000 shares which we valued on the fair value grant date. Of the $446,400 recorded as a discount, we immediately amortized $184,837 to interest expense. During the three months ended March 31, 2018, we amortized an additional $58,125 to interest expense and accrued $1,996 of nominal interest. On February 26, 2018, we issued a convertible promissory note in the amount of $100,000. We received the proceeds of $90,000 on the same date, recording an original issue discount of $10,000. The note matures on October 30, 2018 and bears interest at 12%, with any unpaid principal and interest at maturity bearing interest at 18%. The lender may convert any outstanding principal and interest at 60% of the average of the four lowest trading price for twenty five days prior to the notice of conversion. We initially recorded a discount on this note in the amount of $173,273 consisting of the $10,000 original issue discount and an initial derivative of $163,273 (see Derivative section below), but immediately amortized $73,273 to interest expense. During the three months ended March 31, 2018, we amortized an additional $22,222 of this discount to interest expense. Additionally, during the three months ended March 31, 2018, we accrued $1,066 of nominal interest. The Company has the option to prepay the outstanding interest at principal at any time prior to 180 days after issue, incurring the following additional interest expense: 0-90 days: 135%; 91-180 days 150%. After 180 days after issuance, no prepayment is allowed. On March 9, 2018, we issued a convertible promissory note in the amount of $110,000. We received the proceeds of $100,000 on March 13, 2018, recording an original issue discount of $10,000. The note matures on March 5, 2019 and bears interest at 8%, with any unpaid principal and interest at maturity bearing interest at 16%. The lender may convert any outstanding principal and interest at 63% of twenty trading days prior to the notice of conversion. We initially recorded a discount on this note in the amount of $131,224 consisting of the $10,000 original issue discount and an initial derivative of $121,224 (see Derivative section below), but immediately amortized $21,224 to interest expense. During the three months ended March 31, 2018, we amortized an additional $8,732 of this discount to interest expense. Additionally, during the three months ended March 31, 2018, we accrued $1,167 of nominal interest. The Company has the option to prepay the outstanding interest at principal at any time prior to 180 days after issue, incurring the following additional interest expense: 0-90 days: 115%; 91-180 days 125%. Convertible notes payable at March 31, 2018 and December 31, 2017 and their classification into long-term, short-term and in-default were as follows: 03/31/18 12/31/17 All convertible promissory notes Unpaid principal 1,507,442 960,311 Discounts (599,736 ) (146,297 ) Convertible notes payable, net $ 907,706 $ 814,014 Classified as short-term Unpaid principal balance 1,418,294 825,013 Discounts (595,623 ) (119,710 ) Convertible notes payable - short-term, net $ 822,671 $ 705,303 Classified as long-term Unpaid principal balance 5,000 32,000 Discounts (4,113 ) (26,587 ) Convertible notes payable - short-term, net $ 887 $ 5,413 Classified as in default Unpaid principal balance 84,148 103,298 Discounts - - Convertible notes payable - short-term, net $ 84,148 $ 103,298 Derivative liabilities The above-referenced convertible promissory notes issued during the three months ended March 31, 2018 were analyzed in accordance with EITF 0705 and ASC 815. EITF 075, which is effective for fiscal years beginning after December 15, 2009, and interim periods within those fiscal years. The objective of EITF 075 is to provide guidance for determining whether an equitylinked financial instrument is indexed to an entitys own stock. This determination is needed for a scope exception under Paragraph 11(a) of ASC 815 which would enable a derivative instrument to be accounted for under the accrual method. The classification of a nonderivative instrument that falls within the scope of EITF 0019 Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Companys Own Stock also hinges on whether the instrument is indexed to an entitys own stock. A nonderivative instrument that is not indexed to an entitys own stock cannot be classified as equity and must be accounted for as a liability. The EITF reached a consensus that would establish a twostep approach in determining whether an instrument or embedded feature is indexed to an entitys own stock. First, the instrument's contingent exercise provisions, if any, must be evaluated, followed by an evaluation of the instrument's settlement provisions. Derivative financial instruments should be recorded as liabilities in the consolidated balance sheet and measured at fair value. For purposes of this engagement and report, we utilized fair value as the basis for formulating our opinion which has been defined by the Financial Accounting Standards Board (FASB) as the amount for which an asset (or liability) could be exchanged in a current transaction between knowledgeable, unrelated willing parties when neither party is acting under compulsion. The FASB has provided guidance that its definition of fair value is consistent with the definition of fair market value in IRS Rev. Rule 5960. The Company issued Subscription Notes from 2015 through 2017 in the United States and Australia which are convertible at discounted market rates and market prices based on the average of 5 trading day closing bids. The notes are convertible after 1 year from issuance; mature in 18 months from issuance; accrued at 5% interest; and a 10% default rate. These convertible notes have become tainted (The Tainted Notes) as a result of the issuance of convertible promissory notes issued in the United States since there is a possibility (however remote) that the Company would not have enough shares in the Treasury to satisfy all possible conversions. The Convertible Note derivatives were valued as of issuance; conversion; redemption/settlement; and the quarterly period 3/31/18. The following assumptions were used for the valuation of the derivative liability related to the Notes: · The stock price of $0.0081 to $0.0169 in this period would fluctuate with the Company projected volatility. · The notes convert with variable conversion prices based on the percentages of the low or average trades or bids over 20 to 25 trading days. · The effective discounts rates estimated throughout the periods range from 35% to 42% with potentially an additional discount. · The Holder would automatically convert the note before maturity if the registration was effective and the company was not in default. · The projected annual volatility for each valuation period was based on the historic volatility of the company are 217.0% 233% (annualized over the term remaining for each valuation). · An event of default would occur 0% of the time, increasing 1.00% per month to a maximum of 20%. · The Holders would redeem the notes (with penalties up to 50% depending on the date and fullpartial redemption) based on availability of alternative financing of 0% of the time, increasing 1.00% per month to a maximum of 5%. · The Holder would automatically convert the note at the maximum of 2 times the conversion price or the stock price on the date of valuation. · The Holder would automatically convert the note based on ownership or trading volume limitations. We recorded the initial derivative as both a derivative liability and a debt discount (or initial reduction in carrying value of the debt). We then amortized the debt discounts using the Effective Interest Method which recognizes the cost of borrowing at a constant interest rate throughout the contractual term of the obligation. The effective interest rates on six instruments issued during the quarter ended March 31, 2018 range from 243% to 289%. At each reporting date, we determine the fair market value for each derivative associated with each of the above instruments. At March 31, 2018, we determined the fair value of these derivatives were $1,479,001. Changes in outstanding derivative liabilities are as follows: Balance, December 31, 2017 $ - Changes due to new issuances 788,679 Changes due to extinguishments (93,280 ) Changes due to adjustment to fair value 702,785 Balance, March 31, 2018 $ 1,398,184 |
Litigation
Litigation | 3 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
Note 7 - Litigation | Morgan Lawsuit Background The May 21, 2015 merger of the Company with Click Evidence, Inc. (Click) resulted in the transfer of Clicks assets and interests from Click to the Company and in Click becoming an asset-less entity inside the Company and then being disposed of on November 25, 2015. In the November 25, 2015 conveyance of the Click to the new owner, its name was changed to BH Trucking, Inc. (BH). Filing and service A first lawsuit was filed in the Superior Court of the State of Arizona, Pima County, by a former consultant to Click, Richard Morgan (Morgan). This lawsuit was served on December 2, 2015, against Click/BH, with the Company also named in the lawsuit, but not served by it or effectively made aware of it until 2017. Allegation The lawsuit claimed that the consultants agreement with Click/BH permitted him to recover a finders fee for the cashless stock swap that achieved the merger on May 21, 2015. The new owner of Click/BH, the only party served, declined to defend the lawsuit allowing it to go to default. Default judgment On December 16, 2016, the Court issued a default judgment for the plaintiff and against the defendants in the amount of $2,377,915. The Company believes that having not been served or made aware of the lawsuit, it is not a target of the judgment. Second Lawsuit On January 23, 2017, the Company and its CEO were served in a second lawsuit by Morgan alleging that the Companys intellectual property assets that were transferred to it by Click under the May 21, 2015 merger of the Company with Click, were fraudulently removed from Click/BH, and seeks to have them returned to Click/BH. Charge to the Financial Statements The Company believes that the second lawsuit is baseless, and is defending itself vigorously against it. The Company also believes that being named but not served, the default judgment in Morgans first lawsuit does not apply to the Company. Nevertheless, out of an abundance of caution, in Q3 2017 we included in liabilities the default amount of $2,377,915 plus $4,459 interest at 4.5% from December 16, 2016, the date of the judgment, to December 31, 2016. On August 29, 2017, the Court set aside the judgment in the First Lawsuit resulting in the removal of the liability of $2,377,915 and accrued interest of $4,459 at December 31, 2016, as well as the additional accrued interest recorded during 2017 of $44,294, for a total gain of $2,426,668. McRae Lawsuit On October 7, 2017, Eric L. McRae of Sedgwick County, Kansas (McRae) filed a complaint against the Company in the United States District Court for the District of Kansas asserting a claim that Tautachrome breached a written agreement for the employment of McRae and seeking an award of damages in excess of $75,000. Although Tautachrome refutes each and every allegation made by McRae in the complaint and intends to vigorously defend against it, we have accrued $49,000 to expense against this contingency. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
Note 8 - Income Taxes | Deferred income taxes reflect the tax consequences on future years of differences between the tax bases: 3/31/18 12/31/17 Net operating loss carry-forward 2,429,514 2,103,201 Deferred tax asset at 39% $ 947,510 $ 820,248 Valuation allowance (947,510 ) (820,248 ) Net future income taxes $ - $ - In assessing the realizability of future tax assets, management considers whether it is more likely than not that some portion or all of the future tax assets will not be realized. The ultimate realization of future tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of future tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Management has provided for a valuation allowance on all of its losses as there is no assurance that future tax benefits will be realized. Our tax loss carry-forwards will begin to expire in 2030. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
Note 9 - Subsequent Events | On April 16, 2018, the Board of Directors appointed Mr. Aasim Saied as a director pursuant to section 223 of the Delaware General Corporation Law. |
Basis of Presentation and Sum16
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Basis Of Presentation And Summary Of Significant Accounting Policies Policies | |
Consolidated Financial Statements | In the opinion of management, the accompanying financial statements includes all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows for the period ending March 31, 2018. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with information included in our audited financial statements for the period ended December 31, 2017, as reported in Form 10-K filed with the Securities and Exchange Commission. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company's system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented. |
Principles of Consolidation | Our consolidated financial statements include the accounts of Tautachrome, Inc. and all majority-owned subsidiaries. All significant inter-company accounts and transactions are eliminated in consolidation. |
Long-Lived Assets, Intangible Assets and Impairment | In accordance with U.S. GAAP, the Companys long-lived assets and amortizable intangible assets are tested for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. The Company assesses the recoverability of such assets by determining whether their carrying value can be recovered through undiscounted future operating cash flows, including its estimates of revenue driven by assumed market segment share and estimated costs. If impairment is indicated, the Company measures the amount of such impairment by comparing the fair value to the carrying value. |
Use of Estimates | The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Net Loss Per Share | Basic and diluted net loss per share calculations are calculated on the basis of the weighted average number of common shares outstanding during the year. The per share amounts include the dilutive effect of common stock equivalents in years with net income. Basic and diluted loss per share is the same for the three months ended March 31, 2018 and 2017 as the effect of our potential common stock equivalents would be anti-dilutive. |
Recent Accounting Pronouncements | In January 2017, the FASB issued ASU 201701, Business Combinations (Topic 805); Clarifying the Definition of a Business In July 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 201711, Earnings Per Share Distinguishing Liabilities from Equity Derivatives and Hedging DebtDebt with Conversion and Other Options The adoption of these standards is not expected to have a material impact on our financial position or results of operations. |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Tables | |
Schedule of prepayment rights | Days % 1-30 115 % 31-60 120 % 61-90 125 % 91-120 130 % 121-150 135 % 151-180 140 % |
Summary of proceeds, original issue discounts and nominal liabilities | Proceeds Original Issue Discount Total Nominal Liability Tranche 1 220,000 41,563 261,563 Future tranche(s) 180,000 23,438 203,438 Total 400,000 65,000 465,000 |
Summary of convertible notes payable | Convertible notes payable at March 31, 2018 and December 31, 2017 and their classification into long-term, short-term and in-default were as follows: 03/31/18 12/31/17 All convertible promissory notes Unpaid principal 1,507,442 960,311 Discounts (599,736 ) (146,297 ) Convertible notes payable, net $ 907,706 $ 814,014 Classified as short-term Unpaid principal balance 1,418,294 825,013 Discounts (595,623 ) (119,710 ) Convertible notes payable - short-term, net $ 822,671 $ 705,303 Classified as long-term Unpaid principal balance 5,000 32,000 Discounts (4,113 ) (26,587 ) Convertible notes payable - short-term, net $ 887 $ 5,413 Classified as in default Unpaid principal balance 84,148 103,298 Discounts - - Convertible notes payable - short-term, net $ 84,148 $ 103,298 |
Changes in outstanding derivative liabilities | Changes in outstanding derivative liabilities are as follows: Balance, December 31, 2017 $ - Changes due to new issuances 788,679 Changes due to extinguishments (93,280 ) Changes due to adjustment to fair value 702,785 Balance, March 31, 2018 $ 1,398,184 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Income Taxes Tables | |
Summary of deferred income taxes | Deferred income taxes reflect the tax consequences on future years of differences between the tax bases: 3/31/18 12/31/17 Net operating loss carry-forward 2,429,514 2,103,201 Deferred tax asset at 39% $ 947,510 $ 820,248 Valuation allowance (947,510 ) (820,248 ) Net future income taxes $ - $ - |
Organization and Nature of Bu19
Organization and Nature of Business (Details Narrative) | 3 Months Ended |
Mar. 31, 2018 | |
Organization And Nature Of Business Details Narrative | |
State of incorporation | Delaware |
Date of incorporation | Jun. 5, 2006 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Interest paid | $ 2,720 | $ 549 | |
Short term borrowings | $ 16,025 | ||
Exercise price | $ 1 | ||
Adjustment to additional paid in capital, Imputed interest | $ 2,019 | ||
Proceeds from related-party loan | 1,830 | $ 10,151 | |
Convertible notes payable - related party | 102,990 | 101,160 | |
Twenty Second Trust [Member] | |||
Accrued interest | 4,924 | ||
Accrued expenses | 1,233 | ||
Interest paid | 0 | 0 | |
Debt outstanding balance | 100,033 | ||
Short term borrowings | 219,902 | ||
Principal and interest outstanding | $ 16,012 | ||
Interest payment default description | According to our agreement with Mr. Nugent, we accrue interest on all unpaid amounts at 5%. Principal and interest are callable at any time. If principal and interest are called and not repaid, the loan is considered in default after which interest is accrued at 10%. | ||
Twenty Second Trust [Member] | Principal [Member] | |||
Short term borrowings | 99,692 | ||
Twenty Second Trust [Member] | Interest [Member] | |||
Short term borrowings | 17,220 | ||
Dr. Leonard [Member] | |||
Proceeds from related-party loan | 1,830 | ||
Convertible notes payable - related party | $ 102,990 |
Capital (Details Narrative)
Capital (Details Narrative) | Feb. 07, 2018USD ($)shares | Dec. 12, 2017USD ($)shares | Oct. 05, 2017shares | Oct. 20, 2016shares | Sep. 29, 2016 | Mar. 31, 2018USD ($)shares | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($)Integershares | Mar. 09, 2018USD ($) | Feb. 26, 2018USD ($) | Dec. 27, 2017USD ($) |
Imputed interest | $ | $ 4,750 | $ 18,678 | |||||||||
Common stock shares issued for incentive to creditor | 15,000,000 | ||||||||||
Debt discount | $ | $ 127,500 | ||||||||||
Description for retirement of Preferred stock | the Companys principal shareholders (Principals), Dr. Jon N. Leonard, Micheal P. Nugent, and Matthew W. Staker, offered to retire 1,379,510,380 of their common shares in exchange for a new series of non-trading preferred shares | ||||||||||
Description for share exchange ratio and voting rights | In the share exchange, each principal received 1 Preferred Share for each 100 common shares retired Each share of Preferred Shares entitles the holder to 100 votes (and each 1/100th of a Preferred Share entitles the holder to one vote) | ||||||||||
Convertible preferred stock maturity period | 5 years | ||||||||||
Terms of optional conversion of preferred stock | Optional conversion - After October 5, 2017, each holder may convert each share into 100 shares of common stock immediately following a period of ten consecutive trading days during which the average closing or last sale price exceeds $3.00 per share. Also, each holder may convert into 110 shares of common stock at any time that the shares are listed on a National exchange (for example, the NYSE or NASDAQ) | ||||||||||
General and administrative expense | $ | $ 307,425 | $ 130,936 | |||||||||
Consulting Agreement [Member] | |||||||||||
Earned Shares, accrued | 700,000 | 140,000 | |||||||||
General and administrative expense | $ | $ 12,600 | $ 21,420 | |||||||||
Preferred Stock Series D | |||||||||||
Preferred stock shares authorized, designated shares | 13,795,104 | ||||||||||
Preferred stock coversion ratio | 100 | ||||||||||
Consultant [Member] | |||||||||||
Common stock shares issued for services | 6,700,000 | ||||||||||
Common stock value issued for services charged to general and administrative expenses | $ | $ 84,329 | ||||||||||
Number of consultants | Integer | 4 | ||||||||||
Treasury stock, shares acquired | 2,041,324 | ||||||||||
Convertible promissory note [Member] | |||||||||||
Common stock shares issued for incentive to creditor | 15,000,000 | ||||||||||
Debt discount | $ | $ 446,400 | $ 131,224 | $ 173,273 | $ 95,816 | |||||||
Debt conversion converted instrument shares issued | 8,493,243 | ||||||||||
Principal reduction on debt conversion original amount | $ | 10,000 | $ 49,249 | |||||||||
Reduction on debt conversion converted instrument, Accrued interest | $ | $ 1,155 | $ 4,916 | |||||||||
Common stock issued for conversion of convertible debt | 1,996,331 |
Debt (Details)
Debt (Details) | 3 Months Ended |
Mar. 31, 2018 | |
1-30 Days [Member] | |
Prepayment interest rate | 115.00% |
31-60 Days [Member] | |
Prepayment interest rate | 120.00% |
61-90 Days [Member] | |
Prepayment interest rate | 125.00% |
91-120 Days [Member] | |
Prepayment interest rate | 130.00% |
121-150 Days [Member] | |
Prepayment interest rate | 135.00% |
151-180 Days [Member] | |
Prepayment interest rate | 140.00% |
Debt (Details1)
Debt (Details1) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Proceeds | $ 593,000 | $ 26,040 |
Tranche 1 [Member] | ||
Proceeds | 220,000 | |
Original Issue Discount | 180,000 | |
Total Nominal Liability | 400,000 | |
Future Tranche [Member] | ||
Proceeds | 41,563 | |
Original Issue Discount | 23,438 | |
Total Nominal Liability | 65,000 | |
Total [Member] | ||
Proceeds | 261,563 | |
Original Issue Discount | 203,438 | |
Total Nominal Liability | $ 465,000 |
Debt (Details 2)
Debt (Details 2) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
All convertible promissory notes [Member] | ||
Unpaid principal | $ 1,507,442 | $ 960,311 |
Discounts | (599,736) | (146,297) |
Convertible notes payable | 907,706 | 814,014 |
Classified as short-term [Member] | ||
Unpaid principal | 1,418,294 | 825,013 |
Discounts | (595,623) | (119,710) |
Convertible notes payable | 822,671 | 705,303 |
Classified as long-term [Member] | ||
Unpaid principal | 5,000 | 32,000 |
Discounts | (4,113) | (26,587) |
Convertible notes payable | 887 | 5,413 |
Classified as in default [Member] | ||
Unpaid principal | 84,148 | 103,298 |
Discounts | ||
Convertible notes payable | $ 84,148 | $ 103,298 |
Debt (Details 3)
Debt (Details 3) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Debt Details 3 | |
Beginning balance | |
Changes due to new issuances | 788,679 |
Changes due to extinguishments | (93,280) |
Changes due to adjustment to fair value | 702,785 |
Ending balance | $ 1,398,184 |
Debt (Details Narrative)
Debt (Details Narrative) | Mar. 13, 2018USD ($) | Mar. 09, 2018USD ($) | Feb. 12, 2018USD ($) | Feb. 07, 2018USD ($)shares | Feb. 26, 2018USD ($) | Feb. 12, 2018USD ($) | Dec. 27, 2017USD ($) | Mar. 31, 2018USD ($)Integer$ / sharesshares | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) |
Proceeds from convertible notes payable | $ 593,000 | $ 26,040 | ||||||||
Debt discount, amortized to interest expenses | 534,430 | $ 21,286 | $ 138,668 | |||||||
Debt discount, additional amortized to interest expenses | 11,694 | |||||||||
Loans from related parties | 16,025 | |||||||||
Principal reduction on convertible debt amount | 49,249 | |||||||||
Convertible notes payable, default | 95,798 | |||||||||
Debt discount | 127,500 | |||||||||
Accrued nominal interest | $ 1,034 | |||||||||
Common stock shares issued for incentive | shares | 15,000,000 | |||||||||
Fair value of derivatives | $ 1,479,001 | |||||||||
Convertible notes payable - related party | 102,990 | 101,160 | ||||||||
Dr. Leonard [Member] | ||||||||||
Convertible notes payable - related party | 102,990 | |||||||||
Twenty Second Trust [Member] | ||||||||||
Loans from related parties | 219,902 | |||||||||
Accrued interest | $ 4,924 | |||||||||
Principal [Member] | Twenty Second Trust [Member] | ||||||||||
Loans from related parties | 99,692 | |||||||||
Interest [Member] | Twenty Second Trust [Member] | ||||||||||
Loans from related parties | $ 17,220 | |||||||||
0-90 Days [Member] | ||||||||||
Prepayment interest rate | 135.00% | |||||||||
91-180 Days [Member] | ||||||||||
Prepayment interest rate | 150.00% | |||||||||
Promissory note [Member] | ||||||||||
Debt discount, amortized to interest expenses | $ 17,743 | |||||||||
Derivative liability | 67,743 | $ 67,743 | ||||||||
Original issue discount | 5,125 | |||||||||
Debt discount | $ 72,868 | $ 72,868 | ||||||||
Maturity date | Feb. 5, 2019 | |||||||||
Debt conversion, description | The lender may convert any outstanding principal and interest at 60% of the lowest trading price for twenty days prior to the notice of conversion. | |||||||||
Accrued nominal interest | $ 645 | |||||||||
Promissory notes, amount | $ 55,125 | |||||||||
Proceeds from notes payable | 50,000 | |||||||||
Promissory note [Member] | Interest [Member] | ||||||||||
Bearing interest rate | 16.00% | |||||||||
Promissory note [Member] | Unpaid principal [Member] | ||||||||||
Bearing interest rate | 8.00% | |||||||||
Promissory note [Member] | On February 1, 2018 [Member] | ||||||||||
Debt discount, amortized to interest expenses | 8,286 | |||||||||
Debt discount, additional amortized to interest expenses | 10,000 | |||||||||
Derivative liability | 66,286 | |||||||||
Original issue discount | 2,000 | |||||||||
Debt discount | $ 68,286 | |||||||||
Debt conversion, description | At any time 180 days after the issuance (or June 30, 2018) the lender may convert at a 40% discount of the three lowest trading prices during the previous twenty trading days prior to the notice of conversion. | |||||||||
Promissory notes, amount | $ 60,000 | |||||||||
Proceeds from notes payable | $ 58,000 | |||||||||
Promissory note [Member] | On February 1, 2018 [Member] | Interest [Member] | ||||||||||
Bearing interest rate | 18.00% | |||||||||
Promissory note [Member] | On February 1, 2018 [Member] | Unpaid principal [Member] | ||||||||||
Bearing interest rate | 12.00% | |||||||||
Convertible promissory note [Member] | ||||||||||
Number of convertible promissory notes | Integer | 7 | |||||||||
Convertible promissory notes, issued | $ 110,000 | $ 465,000 | $ 100,000 | |||||||
Proceeds from convertible notes payable | $ 100,000 | 90,000 | $ 75,000 | $ 213,040 | ||||||
Beneficial conversion feature of convertible notes | 209,040 | |||||||||
Debt discount, amortized to interest expenses | 21,224 | 184,837 | 73,273 | 17,816 | ||||||
Debt discount, additional amortized to interest expenses | 58,125 | |||||||||
Nominal amount of convertible notes | 78,000 | |||||||||
Derivative liability | 121,224 | 277,337 | 163,273 | 92,816 | ||||||
Original issue discount | 10,000 | 41,563 | 10,000 | 3,000 | ||||||
Debt discount | $ 131,224 | $ 446,400 | $ 173,273 | $ 95,816 | ||||||
Maturity date | Mar. 5, 2019 | Oct. 30, 2018 | Sep. 30, 2018 | |||||||
Debt conversion, description | The lender may convert any outstanding principal and interest at 63% of twenty trading days prior to the notice of conversion. | After 180 days, the lender has the right to convert any and all principal and interest to common stock at 65% of the lowest trading price over the twenty trading days prior to the notice of conversion. At any time during default, the lender may apply an additional market discount of 15%. | The lender may convert any outstanding principal and interest at 60% of the average of the four lowest trading price for twenty five days prior to the notice of conversion. | The note could be converted at 58% of the lowest two trading prices during the twenty days prior to conversion. | ||||||
Notes amount paid to creditor | $ 94,923 | |||||||||
Accrued interest | 1,118 | |||||||||
Accrued nominal interest | $ 1,996 | |||||||||
Additional interest expense | $ 15,805 | |||||||||
Equity incentive | $ 127,500 | |||||||||
Common stock shares issued for incentive | shares | 15,000,000 | |||||||||
Convertible promissory note [Member] | First Tranche [Member] | ||||||||||
Proceeds from convertible notes payable | $ 220,000 | |||||||||
Maturity date | May 13, 2018 | |||||||||
Convertible promissory note [Member] | Principal [Member] | ||||||||||
Bearing interest rate | 22.00% | |||||||||
Convertible promissory note [Member] | Interest [Member] | ||||||||||
Bearing interest rate | 16.00% | 18.00% | 18.00% | |||||||
Convertible promissory note [Member] | Unpaid principal [Member] | ||||||||||
Bearing interest rate | 8.00% | 6.00% | 12.00% | |||||||
Convertible promissory note [Member] | Unpaid interest[Member] | ||||||||||
Bearing interest rate | 12.00% | |||||||||
Convertible promissory note [Member] | 0-90 Days [Member] | ||||||||||
Additional interest expenses, percentage | 135.00% | |||||||||
Convertible promissory note [Member] | 91-180 Days [Member] | ||||||||||
Additional interest expenses, percentage | 150.00% | |||||||||
Convertible Note Derivatives [Member] | ||||||||||
Debt conversion, description | The Holder would automatically convert the note at the maximum of 2 times the conversion price or the stock price on the date of valuation. | |||||||||
Default interest rate, description | An event of default would occur 0% of the time, increasing 1.00% per month to a maximum of 20%. | |||||||||
Notes redemption, description | The Holders would redeem the notes (with penalties up to 50% depending on the date and full–partial redemption) based on availability of alternative financing of 0% of the time, increasing 1.00% per month to a maximum of 5%. | |||||||||
Convertible Note Derivatives [Member] | Minimum [Member] | ||||||||||
Assumption of stock price per shares | $ / shares | $ 0.0081 | |||||||||
Notes conversion trading days | Integer | 20 | |||||||||
Estimated effective discount rate | 35.00% | |||||||||
Volatility rate | 217.00% | |||||||||
Effective interest rate | 243.00% | |||||||||
Convertible Note Derivatives [Member] | Maximum [Member] | ||||||||||
Assumption of stock price per shares | $ / shares | $ 0.0169 | |||||||||
Notes conversion trading days | Integer | 25 | |||||||||
Estimated effective discount rate | 42.00% | |||||||||
Volatility rate | 233.00% | |||||||||
Effective interest rate | 289.00% | |||||||||
Subscription Notes [Member] | 2015 Through 2017 [Member] | ||||||||||
Debt conversion, description | The notes are convertible after 1 year from issuance; mature in 18 months from issuance; accrued at 5% interest; and a 10% default rate. | |||||||||
Convertible promissory note One [Member] | ||||||||||
Debt discount, additional amortized to interest expenses | $ 22,222 | |||||||||
Accrued nominal interest | $ 1,066 | |||||||||
Convertible promissory note One [Member] | 0-90 Days [Member] | ||||||||||
Additional interest expenses, percentage | 115.00% | |||||||||
Convertible promissory note One [Member] | 91-180 Days [Member] | ||||||||||
Additional interest expenses, percentage | 125.00% | |||||||||
Convertible promissory note Two [Member] | ||||||||||
Debt discount, additional amortized to interest expenses | $ 8,732 | |||||||||
Accrued nominal interest | $ 1,167 |
Litigation (Details Narrative)
Litigation (Details Narrative) - USD ($) | Oct. 07, 2017 | Aug. 29, 2017 | Dec. 16, 2016 | Dec. 31, 2017 |
Amount of damages sought | $ 2,377,915 | |||
Loss contingency damages sought interest amount | $ 4,459 | |||
Interest rate | 4.50% | |||
Litigation amount damages sought included in liabilities removed | $ 2,377,915 | |||
Litigation amount damages sought accrued interest included in liabilities removed | 4,459 | $ 44,294 | ||
Gain on litigation settlement amount | $ 2,426,668 | |||
McRae [Member] | ||||
Amount of damages sought | $ 75,000 | |||
Loss contingency damages sought accrued expenses | $ 49,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Income Taxes Details | ||
Net operating loss carry-forward | $ 2,429,514 | $ 2,103,201 |
Deferred tax asset at 39% | 947,510 | 820,248 |
Valuation allowance | (947,510) | (820,248) |
Net future income taxes |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 3 Months Ended |
Mar. 31, 2018 | |
Income Taxes Details | |
Operating loss carry-forwards expiration period | 2,030 |