Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 18, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Thinspace Technology, Inc. | |
Entity Central Index Key | 1,393,935 | |
Amendment Flag | false | |
Trading Symbol | thns | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,015 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 625,510,160 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 49,326 | $ 135,965 |
Accounts receivable | 68,205 | 158,329 |
Inventory | 20,465 | 100,637 |
Prepaid expenses and other current assets | 35,946 | 17,058 |
Total current assets | 173,942 | 411,989 |
Fixed assets, net of accumulated depreciation of $86,183 and $73,396, respectively | 22,732 | 31,272 |
Intangible assets, net of accumulated amortization of $522,407 and $489,221, respectively | 95,124 | 142,799 |
Other assets | 106,963 | 104,683 |
Total assets | 398,761 | 690,743 |
Current liabilities: | ||
Accounts payable and accrued expenses | 1,821,189 | 1,627,641 |
Income taxes payable | 29,000 | 29,000 |
Deferred revenue | 385,022 | 773,163 |
Loans and notes payable, current portion | 502,546 | 469,400 |
Convertible notes payable, net of discount of $1,470,374 and $0, respectively | 1,437,874 | |
Derivative liabilities | 3,869,620 | 12,173,986 |
Total current liabilities | 8,045,251 | 15,073,190 |
Deferred revenue, long term | 172,436 | 202,826 |
Convertible notes payable, net of discount of $0 and $1,247,035, respectively | 849,396 | |
Loans payable | 13,953 | |
Total liabilities | 8,217,687 | 16,139,365 |
Stockholders' deficit | ||
Common stock authorized 500,000,000 shares, $0.001 par value, 448,809,894 and 98,381,445 shares issued and outstanding, respectively | 448,810 | 98,381 |
Additional paid in capital | 9,501,071 | 6,890,970 |
Accumulated deficit | (17,754,836) | (22,414,873) |
Accumulated other comprehensive income (loss) | (14,718) | (23,847) |
Total stockholders' deficit | (7,818,926) | (15,448,622) |
Total liabilities and stockholders' deficit | 398,761 | 690,743 |
Preferred Stock, Undesignated | ||
Stockholders' deficit | ||
Preferred stock, value | ||
Preferred Stock, Series B | ||
Stockholders' deficit | ||
Preferred stock, value | 75 | 75 |
Preferred Stock, Series C | ||
Stockholders' deficit | ||
Preferred stock, value | $ 672 | $ 672 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Accumulated depreciation (in dollars) | $ 86,183 | $ 73,396 |
Accumulated amortization (in dollars) | 522,407 | 489,221 |
Discount on convertible notes payable, current | 1,470,374 | 0 |
Discount on convertible notes payable | $ 0 | $ 1,247,035 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 448,809,894 | 98,381,445 |
Common stock, shares outstanding | 448,809,894 | 98,381,445 |
Preferred Stock, Undesignated | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 49,253,000 | 49,253,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Preferred Stock, Series B | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 75,000 | 75,000 |
Preferred stock, shares issued | 75,000 | 75,000 |
Preferred stock, shares outstanding | 75,000 | 75,000 |
Series C Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 672,000 | 672,000 |
Preferred stock, shares issued | 672,000 | 672,000 |
Preferred stock, shares outstanding | 672,000 | 672,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | ||||
Revenues | $ 271,705 | $ 2,322,170 | $ 1,394,704 | $ 5,700,775 |
Cost of goods sold | 111,513 | 1,488,293 | 560,606 | 3,332,524 |
Gross profit | 160,192 | 833,877 | 834,098 | 2,368,251 |
Operating expense: | ||||
Selling, general and administrative | 409,138 | 1,486,697 | 2,314,971 | 4,735,832 |
Depreciation and amortization | 20,218 | 20,964 | 59,658 | 60,999 |
Total operating expense | 429,356 | 1,507,661 | 2,374,629 | 4,796,831 |
Loss from operations | (269,164) | (673,784) | (1,540,531) | (2,428,580) |
Gain (loss) on change in fair value of derivative liability | 37,132,403 | (16,556,422) | 9,489,141 | (15,447,215) |
Gain on conversion of debt | 58,019 | 20,979 | 80,676 | 176,108 |
Interest expense | (687,899) | (1,883,300) | (3,369,249) | (7,354,199) |
Income (loss) before provision for income taxes | 36,233,359 | (19,092,527) | 4,660,037 | (25,053,886) |
Provision for income taxes | ||||
Net income (loss) | 36,233,359 | (19,092,527) | 4,660,037 | (25,053,886) |
Preferred dividend | (1,875) | (1,875) | (5,625) | (5,625) |
Net income (loss) attributable to common shareholders | $ 36,231,484 | $ (19,094,402) | $ 4,654,412 | $ (25,059,511) |
Income (loss) per share: | ||||
Basic | $ 0.1 | $ (0.2) | $ 0.02 | $ (0.27) |
Diluted | $ 0 | $ (0.2) | $ 0 | $ (0.27) |
Weighted average shares outstanding: | ||||
Basic | 353,913,823 | 96,085,012 | 189,737,454 | 92,807,067 |
Diluted | 500,000,000 | 96,085,012 | 500,000,000 | 92,807,067 |
Comprehensive income (loss): | ||||
Net income (loss) | $ 36,233,359 | $ (19,092,527) | $ 4,660,037 | $ (25,053,886) |
Foreign currency translation adjustments | 3,746 | 13,136 | 9,129 | (5,102) |
Comprehensive income (loss) | $ 36,237,105 | $ (19,079,391) | $ 4,669,166 | $ (25,058,988) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 4,660,037 | $ (25,053,886) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation and amortization | 59,658 | 60,999 |
Amortization of prepaid stock based compensation | 937,500 | |
Stock based compensation | 267,352 | 669,678 |
Gain on conversion of debt | (80,676) | (176,108) |
Change in fair value of derivative liability | (9,489,141) | 15,447,215 |
Amortization of debt discount | 3,102,263 | 6,814,247 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 84,813 | 64,722 |
Inventory | 80,172 | (42,606) |
Prepaid expenses and other current assets | (19,387) | (63,573) |
Other assets | (1,280) | (7,763) |
Accounts payable and accrued expenses | 408,715 | (172) |
Deferred revenue | (412,754) | (367,243) |
Net cash used in operating activities | (1,340,228) | (1,716,990) |
Cash flows from investing activities: | ||
Cash paid for fixed assets | (6,249) | (18,421) |
Net cash used in investing activities | (6,249) | (18,421) |
Cash flows from financing activities: | ||
Proceeds from sale of preferred stock | 472,000 | |
Proceeds from notes payable | 1,440,650 | 1,191,000 |
Repayments of notes payable | (162,400) | (75,000) |
Repayment of loan | (10,361) | (11,583) |
Payment of accrued preferred dividends | (11,050) | |
Advances from related parties | 21,000 | |
Repayments to related parties | (118,670) | |
Net cash provided by financing activities | 1,256,839 | 1,478,747 |
Effect of exchange rate changes on cash | 2,999 | (2,470) |
Net decrease in cash | (86,639) | (259,134) |
Cash, beginning of period | 135,965 | 341,031 |
Cash, end of period | 49,326 | 81,897 |
Supplemental Schedule of Cash Flow Information: | ||
Cash paid for interest | 109,709 | 288,689 |
Non-cash investing and financing activities: | ||
Derivative liability of debt issued | 3,233,146 | 5,959,048 |
Fair value of common stock issued upon conversion of notes and accrued interest | 2,567,266 | 1,348,968 |
Note payable converted to common stock | 630,923 | 233,244 |
Accrued interest converted to common stock | 54,128 | 11,410 |
Derivative liability extinguished upon conversion of debt | 2,384,568 | 1,348,684 |
Derivative liability reclassified to equity upon expiration of warrants | 1,892,000 | |
Common stock issued as payment of prepaid consulting fees | $ 1,250,000 |
Organization and Line of Busine
Organization and Line of Business | 9 Months Ended |
Sep. 30, 2015 | |
Organization and Line of Business [Abstract] | |
ORGANIZATION AND LINE OF BUSINESS | NOTE 1 - ORGANIZATION AND LINE OF BUSINESS COMPANY OVERVIEW Nature of Operations THINSPACE TECHNOLOGY, INC. (formerly Vanity Events Holding, Inc.) (the “Company”, “Thinspace” “we”, “us” or “our”), was organized as a Delaware corporation on August 25, 2004, and is a holding company. We are a cloud computing company that develops software productivity solutions that allow our customers secure access to centrally managed desktop or software applications and to work and collaborate from anywhere, accessing enterprise apps and data on any of the latest devices, as easily as they would in their own office- simply and securely. The Company’s principal activity is the development and sale of network software. The Company has a desktop virtualization solution suite, named skySpace, offering 5 key products: ● skyDesk - a simple management software solution for Microsoft remote desktop users. ● skyGate – software solution that allows secure remote access to applications and data from outside of the corporate network. ● skyView – provides access to applications or Windows desktops from a browser on any device, including iPad, iPhone or Android tablet or Smartphone. ● skyDirect – a virtual desktop infrastructure (VDI) software solution that allows secure fast access to hosted virtual desktops. ● skyPoint – A branded hardware thin client endpoint aimed for the enterprise and corporate market. We sell directly to independent software vendors and Application Service Providers (ASPs) and to end users through a chain of distributors and resellers. Our larger customers are predominantly large businesses based around the world, with a concentration in North America, the Far East and India. Our operating subsidiaries are Thinspace Technology Ltd (“Thinspace UK”), organized and operating in the United Kingdom, and Thinspace Technology Ltd. (“Thinspace US”), a Nevada corporation formed on August 24, 2010 and operating in the states of Florida and Texas. BASIS OF PRESENTATION AND GOING CONCERN Basis of Presentation The accompanying condensed consolidated financial statements are unaudited. The unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. These interim consolidated financial statements as of and for the three and nine months ended September 30, 2015 and 2014 are unaudited; however, in the opinion of management, such statements include all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position, results of operations and cash flows of the Company for the periods presented. The results for the three and nine months ended September 30, 2015 are not necessarily indicative of the results to be expected for the year ending December 31, 2015 or for any future period. All references to September 30, 2015 and 2014 in these footnotes are unaudited. These unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto for the year ended December 31, 2014, included in the Company's annual report on Form 10-K filed with the SEC on March 31, 2015. The condensed consolidated balance sheet as of December 31, 2014 has been derived from the audited consolidated financial statements at that date but does not include all disclosures required by the accounting principles generally accepted in the United States of America. Going Concern As of September 30, 2015 we have negative working capital of $7,871,309 and a stockholders’ deficit of $7,818,926. Although we had net income of $4,660,037 for the nine months ended September 30, 2015, this was primarily the result of a noncash gain of approximately $9 million from the change in value of our derivative liabilities. As a result, there is substantial doubt about the Company’s ability to continue as a going concern at September 30, 2015. Management has implemented its business plan to add new products, increase marketing activities and, as a result, increase revenue. Our ability to continue to implement our current business plan and continue as a going concern ultimately is dependent upon our ability to obtain additional equity or debt financing, attain further operating efficiencies and to achieve profitable operations. There can be no assurances that funds will be available to the Company when needed or, if available, that such funds will be available under favorable terms. In the event that the Company is unable to generate adequate revenues to cover expenses and cannot obtain additional funds in the near future, the Company may seek protection under bankruptcy laws. To date, management has not considered this alternative, nor does management view it as a likely occurrence, since the Company is progressing with various potential sources of new capital and we anticipate a successful outcome from these activities. However, capital markets remain difficult and there can be no certainty of a successful outcome from these activities. The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business and does not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. As disclosed in Note 7, Subsequent Events, the Company has continued to fund its operations with proceeds from the sale of convertible debt. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION The unaudited condensed consolidated financial statements include the accounts of Thinspace Technology, Inc. and its wholly-owned subsidiaries, Thinspace UK and Thinspace US. All material inter-company accounts and transactions have been eliminated. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. CASH AND CASH EQUIVALENTS We consider all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. ACCOUNTS RECEIVABLE Accounts receivable are reported at the customers' outstanding balances less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable. The Company evaluates receivables on a regular basis for potential reserve. The accounts receivable balances of $68,205 and $158,329 as of September 30, 2015 and December 31, 2014, respectively, do not include an allowance for doubtful accounts as the Company anticipates payment on all accounts within the next fiscal year. The Company routinely evaluates accounts receivable for uncollectible amounts. REVENUE RECOGNITION The Company is party to certain volume licensing arrangements that include a perpetual license for current products combined with rights to receive unspecified future versions of software products, which the Company has determined are additional software products and are therefore accounted for as subscriptions, with billings recorded as unearned revenue and recognized as revenue ratably over the coverage period. Arrangements that include term based licenses for current products with the right to use unspecified future versions of the software during the coverage period are also accounted for as subscriptions, with revenue recognized ratably over the coverage period. Revenue from cloud-based services arrangements that allow for the use of a hosted software product or service over a contractually determined period of time without taking possession of software are accounted for as subscriptions with billings recorded as unearned revenue and recognized as revenue ratably over the coverage period beginning on the date the service is made available to customers. Some volume licensing arrangements include time-based subscriptions for cloud-based services and software offerings that are accounted for as subscriptions. These arrangements are considered multiple element arrangements. However, because all elements are accounted for as subscriptions and have the same coverage period and delivery pattern, they have the same revenue recognition timing. DEFERRED REVENUE Deferred revenue related to support and maintenance is recorded in a manner consistent with the Company’s revenue recognition policy. The Company typically enters into one-year upgrade and maintenance contracts with its customers. The upgrade and maintenance contracts are generally paid in advance but can be billed monthly or quarterly. The Company defers such payments and recognizes revenue ratably over the contract period. INVENTORY The Company values its inventory at the lower of cost (first-in, first-out) or market. The Company uses estimates and judgments regarding the valuation of inventory to properly value inventory. Inventory adjustments are made for the difference between the cost of the inventory and the estimated realizable value and charged to cost of goods sold in the period in which the facts that give rise to the adjustments become known. FAIR VALUE OF FINANCIAL INSTRUMENTS Our short-term financial instruments, including cash, accounts receivable and accounts payable and accrued expenses consist primarily of instruments without extended maturities, the fair value of which, based on management’s estimates, reasonably approximate their book value. The fair value of our notes and advances payable is based on management estimates and reasonably approximates their book value based on their terms. Fair value measurements ASC 820 “Fair Value Measurements and Disclosure” establishes a framework for measuring fair value and expands disclosure about fair value measurements. ASC 820 defines fair value as the amount that would be received for an asset or paid to transfer a liability (i.e., an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes the following three levels of inputs that may be used: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. In accordance with ASC 820, the following table represents the Company's fair value hierarchy for its financial assets and (liabilities) measured at fair value on a recurring basis as of September 30, 2015: Level 1 Level 2 Level 3 Total Liabilities Conversion derivative liabilities $ — $ — $ 3,869,620 $ 3,869,620 Total Liabilities $ — $ — $ 3,869,620 $ 3,869,620 The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities (conversion and warrant derivative liabilities) for the nine months ended September 30, 2015. Balance at beginning of year $ 12,173,986 Additions and modifications to derivative instruments 3,569,343 Change in fair value of derivative liabilities (9,489,141 ) Extinguishment of derivative liabilities (2,384,568 ) Balance at end of period $ 3,869,620 The following is a description of the valuation methodologies used for these items: Conversion derivative liability CONVERTIBLE INSTRUMENTS The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for “Accounting for Derivative Instruments and Hedging Activities” (“ASC 815-40”). The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standards when “Accounting for Convertible Securities with Beneficial Conversion Features,” as those professional standards pertain to “Certain Convertible Instruments.” Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. ASC 815-40 provides that, among other things, generally, if an event is not within the entity’s control could or require net cash settlement, then the contract shall be classified as an asset or a liability. DERIVATIVE LIABILITIES ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as freestanding derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described. CONCENTRATIONS OF CREDIT RISK The Company performs ongoing credit evaluations of its customers. At September 30, 2015, three customers accounted for 69% of accounts receivable. The Company maintains cash and cash equivalents with major financial institutions. Cash held in US bank accounts is insured up to $250,000 at each institution. Cash held in UK bank accounts is insured up to £85,000 (approximately $129,000 at September 30, 2015) at each institution for each entity. At times, cash balances may exceed the insured limits. The Company has not experienced any loss on these accounts. The balances are maintained in demand accounts to minimize risk. RESEARCH AND DEVELOPMENT Expenses related to present and future products are expensed as incurred. FOREIGN CURRENCY TRANSLATION The financial statements of the Company’s U.K. subsidiary, Thinspace UK, are measured using the British Pound as the functional currency. Assets, liabilities and equity accounts of the company are translated at exchange rates as of the balance sheet date or historical acquisition date, depending on the nature of the account. Revenues and expenses are translated at average rates of exchange in effect throughout the year. The resulting cumulative translation adjustments have been recorded as a separate component of stockholders' equity. The unaudited condensed consolidated financial statements are presented in United States of America dollars. INCOME (LOSS) PER SHARE We use ASC 260, “Earnings Per Share” for calculating the basic and diluted income (loss) per share. We compute basic income (loss) per share by dividing net income (loss) and net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding. Diluted earnings per share for the three and nine months ended September 30, 2015 have been calculated as follows: Three Months Ended September 30, 2015 Nine Months Ended September 30, 2015 Income available to common shareholders $ 36,231,484 $ 4,654,412 Preferred dividend 1,875 5,625 Income attributable to convertible instruments (37,190,422 ) (9,569,817 ) Expense attributable to convertible instruments 687,899 3,369,249 Diluted loss $ (269,164 ) $ (1,540,531 ) Basic shares outstanding 353,913,823 189,737,454 Convertible instruments 146,086,177 310,262,546 Diluted shares outstanding 500,000,000 500,000,000 Diluted EPS $ (0.00 ) $ (0.00 ) Additional potentially dilutive shares of approximately 4 billion shares at September 30, 2015 have been excluded from the calculation since they exceed authorized shares available. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In June 2014, 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 In November 2015, the FASB issued ASU 2015-17, “ Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes In January 2016, the FASB issued ASU 2016-01, “ Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, the FASB issued ASU 2016-02, “ Leases (Topic 842) In March 2016, the FASB issued ASU 2016-09, “ Improvements to Employee Share-Based Payment Accounting In April 2016, the FASB issued ASU 2016-10 “ Revenue from Contracts with Customers (Topic 606)” In May 2016, the FASB issued ASU 2016-12, “ Revenue from Contracts with Customers(Topic 606): Narrow-Scope Improvements and Practical Expedients The Company does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying consolidated financial statements. |
Convertible Notes Payable
Convertible Notes Payable | 9 Months Ended |
Sep. 30, 2015 | |
Convertible Notes Payable [Abstract] | |
CONVERTIBLE NOTES PAYABLE | NOTE 3 – CONVERTIBLE NOTES PAYABLE IBC Funds 2015 Financings During January and February of 2015 the Company received additional funds, aggregating $167,000, pursuant to a Securities Purchase Agreement with IBC Funds, LLC (“IBC Funds”) dated May 29, 2014 in which the Company sold to IBC Funds an 8% convertible debenture in the principal amount of up to $617,500. The debenture matures on the third anniversary of the date of issuance and bears interest a rate of 8% per year, payable semi-annually and on the maturity date. IBC Funds may convert, at any time, the outstanding principal and accrued interest on the debenture into shares of the Company’s common stock, at a conversion price per share at 40% of the lowest closing bid price for the Company’s common stock during the previous 20 trading days. The conversion price is subject to adjustment in the event of sales by the Company of common stock or securities convertible into common stock at a price per share lower than the then-effective conversion price, to such lower price, subject to certain exceptions. A total of $617,000 has been received pursuant to this debenture. During March, April and May 2015 the Company received additional funds, aggregating $305,000, pursuant to a Securities Purchase Agreement originally entered into with Greystone Capital Partners, Inc. (“Greystone”) dated May 29, 2014 in which the Company sold to Greystone Funds an 8% convertible debenture in the principal amount of up to $617,500. Greystone has assigned $305,000 of this debenture to IBC Funds. The debenture matures on the third anniversary of the date of issuance and bears interest a rate of 8% per year, payable semi-annually and on the maturity date. IBC Funds may convert, at any time, the outstanding principal and accrued interest on the debenture into shares of the Company’s common stock, at a conversion price per share at 40% of the lowest closing bid price for the Company’s common stock during the previous 20 trading days. The conversion price is subject to adjustment in the event of sales by the Company of common stock or securities convertible into common stock at a price per share lower than the then-effective conversion price, to such lower price, subject to certain exceptions. A total of $361,000 has been received pursuant to this debenture, $305,000 from IBC Funds in 2015 and $56,000 from Greystone in 2014. LG Capital March 19, 2015 Financing On March 20, 2015, the Company entered into and closed a securities purchase agreement with LG Capital Funding, LLC (“LG Capital”), pursuant to which the Company issued and sold to LG Capital an 8% convertible redeemable note in the principal amount of $137,500 for a purchase price of $131,250. The note matures on the one year anniversary of the date of issuance and bears interest a rate of 8% per year, payable on the maturity date. LG Capital may convert, at any time, the outstanding principal and accrued interest on the note into shares of the Company’s common stock, at a conversion price equal to 70% of the average of the 5 lowest closing prices of the common stock for the twenty prior trading days including the day upon which a notice of conversion is received by the Company. Iconic Holdings March 23, 2015 Financing On March 23, 2015, the Company entered into and closed a securities purchase agreement with Iconic Holdings, LLC (“Iconic”), pursuant to which the Company issued and sold to Iconic a 6% convertible debenture in the principal amount of $50,000 for a purchase price of $50,000. The note matures on the one year anniversary of the date of issuance and bears interest a rate of 6% per year, payable on the maturity date. Iconic may convert, at any time, the outstanding principal and accrued interest on the note into shares of the Company’s common stock, at a conversion price equal to 70% of the average of the 5 lowest closing prices of the common stock for the twenty prior trading days including the day upon which a notice of conversion is received by the Company. Black Mountain March 23, 2015 Financing On March 23, 2015, the Company entered into, and on March 25, 2015, the Company closed a securities purchase agreement with Black Mountain Equities, Inc. (“Black Mountain”), pursuant to which the Company sold to Black Mountain a 10% convertible note in the principal amount of $105,000 for a purchase price of $100,000. The note matures on the two year anniversary of the date of issuance and bears interest a rate of 10% per year, payable on the maturity date. Black Mountain may convert, at any time, the outstanding principal and accrued interest on the note into shares of the Company’s common stock, at a conversion price equal to the lesser of (a) $0.17 or (b) 70% of the average of the three lowest closing bids occurring during the twenty consecutive trading days immediately preceding the applicable conversion date. RDW Capital, LLC April 6, 2015 Financing On April 6, 2015, the Company issued and sold to RDW Capital, LLC (“RDW”) a 6% convertible debenture in the principal amount of $105,000 for a purchase price of $100,000. The debenture is convertible into the Company’s common stock at a conversion price equal to 65% of the average of the 3 lowest closing prices of the common stock for the twenty trading days prior to conversion. Repayment of the debenture is due one year from the date of issuance. St. George Investments LLC April 9, 2015 Financing On April 9, 2015, the Company entered into and closed a securities purchase agreement with St. George Investments LLC (“St. George”), pursuant to which the Company issued and sold to St. George an 8% convertible promissory note in the principal amount of $107,500 for a purchase price of $100,000. The note is convertible into the Company’s common stock at a conversion price equal to 65% of the lowest closing bid price of the common stock for the twenty trading days prior to conversion. Repayment of the note is due one year from the date of issuance. Blue Citi PR April 10, 2015 Financing On April 10, 2015, the Company entered into and closed a securities purchase agreement with Blue Citi PR (“Blue Citi”), pursuant to which the Company issued and sold to Blue Citi a 8% convertible debenture in the principal amount of up to $535,000 for a purchase price of $500,000 payable as follows: (i) $200,000 was paid upon issuance; (ii) $200,000 is payable at Blue Citi’s discretion at any time within 60 days of issuance provided that, if Blue Citi does not make such payment prior to the date this is 60 days from the date of issuance, Blue Citi will be required to make such payment on the date that is 60 days from the date of issuance, subject to the condition that the average trading price for the Company’s common stock for the five trading days prior to the date that is 60 days from the date of issuance is equal to or greater than 50% of the 5 day average trading price prior to the date of issuance, and (iii) $100,000 at the sole discretion of Blue Citi within 365 days of the date of issuance provided that, if Blue Citi does not make the second $200,000 payment under the debenture within 60 days of the date of issuance, Blue Citi will not have the right to make such $100,000 payment. The debenture is convertible into the Company’s common stock at a conversion price equal to 65% of the average of the three lowest trading prices for the common stock for the twenty trading days prior to conversion. Repayment of the debenture is due two years from the date of issuance. On May 14, 2015 the Company entered into an Amendment with Blue Citi PR whereby the terms were adjusted as follows: i) $200,000 paid to the Company upon issuance; (ii) $200,000 payable to the Company on June 10, 2015; and $100,000 payable to the Company on July 10, 2015. Each such payment reflects a 7% original issue discount added to the principal amount at time of payment (up to $14,000). As of September 30, 2015 a total of $395,000 has been funded pursuant to this agreement. Black Mountain Buyback On August 10, 2015, the Company entered into a payoff agreement with Black Mountain, pursuant to which the Company paid to Black Mountain $70,000, and issued to Black Mountain a non-convertible note in the principal amount of $30,000, due one year from the date of issuance, in exchange for the Company’s convertible note issued to Black Mountain, dated March 23, 2015, in the original principal amount of $105,000. The conversion features of the debentures described above contain a variable conversion rate. As a result, we have classified the conversion features as derivative liabilities in the consolidated financial statements. Upon issuance, we have recorded conversion feature liabilities of $2,434,738. The value of the conversion feature liabilities was determined using an option valuation model based on the following assumptions: (1) risk free interest rates of between 0.265 - 0.625%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of between 165% - 210%; and (4) expected lives of 1 – 2.42 years. The Company has allocated $1,346,077 to debt discount, to be amortized over the life of the debt, with the balance of $1,088,661 being charged to expense at issue. |
Derivative Liabilities
Derivative Liabilities | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Liabilities [Abstract] | |
DERIVATIVE LIABILITIES | NOTE 4 –DERIVATIVE LIABILITIES The Company has identified certain embedded derivatives related to its convertible debentures, convertible preferred stock and a debt purchase agreement. Since certain of the debentures, the preferred stock and the debt settlement agreement are convertible into a variable number of shares, the conversion features of those debentures are recorded as derivative liabilities. The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date and to adjust to fair value as of each subsequent balance sheet date. Convertible Debentures and Debt Settlement Agreement During the nine months ended September 30, 2015, $630,923 of principal and $54,128 of accrued interest was converted into 348,278,449 shares of common stock. The Company has recorded income of $2,596,238 and $2,222,937 for the three and nine months ended September 30, 2015, respectively, related to the change in fair value of the conversion feature through the dates of conversion. At September 30, 2015, we recalculated the fair value of the embedded conversion feature of our notes and debt settlement agreement subject to derivative accounting and have determined that their fair value at September 30, 2015 was $3,281,889. The value of the conversion liabilities was determined using an option valuation modelbased on the following assumptions: (1) risk free interest rate of 0.066% - 0.417%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of between 191% - 248% and (4) an expected life of 0.25 – 1.66 years. We recorded income of $28,249,012 and $4,814,818 for the three and nine months ended September 30, 2015, respectively, related to the change in fair value. During the three and nine months ended September 30, 2015 we recorded additions to our derivative conversion liabilities related to the conversion feature attributable to interest accrued during the period. These additions aggregated $96,767 and $798,408 for the three and nine months ended September 30, 2015, respectively, which has been charged to interest expense. Convertible Preferred Stock The conversion feature of our Series B preferred stock has been adjusted due to the subsequent issuance of debt. As a result, the conversion price is now $0.001755 per share, such that an aggregate of 42,735,043 shares of the Company’s common stock are issuable upon such conversion. The Company has recorded income of $234,162 and $333,112 for the three and nine months ended September 30, 2015, respectively, related to the change in fair value of the conversion feature of the preferred stock through the dates of adjustment. The Company has also recorded an expense of $22,911 and $336,197 for the three and nine months ended September 30, 2015, respectively, due to the increase in the fair value of the conversion feature as a result of the modification. At September 30, 2015, we recalculated the fair value of the embedded conversion feature of our Series B and Series C preferred stock subject to derivative accounting and have determined that the fair value at September 30, 2015 was $587,731. The value of the conversion liabilities was determined using an option valuation model based on the following weighted average assumptions: (1) risk free interest rate of 0.209%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of 191% and (4) an expected life of 1 year. We recorded income of $6,052,991 and $2,118,274 during the three and nine months ended September 30, 2015, respectively, related to the change in fair value. Derivative liability activity for the nine months ended September 30, 2015 is summarized as follows: Balance at December 31, 2014 Additions Modifications Conversions Reclassifications Change in Value Balance at September 30, 2015 Convertible notes, interest and debt settlement $ 9,471,074 $ 3,233,146 $ — $ (2,253,031 ) $ (131,537 ) $ (7,037,755 ) $ 3,281,897 Convertible preferred stock 2,702,912 — 336,197 — — (2,451,386 ) 587,723 $ 12,173,986 $ 3,233,146 $ 336,197 $ (2,253,031 ) $ (131,537 ) $ (9,489,141 ) $ 3,869,620 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2015 | |
Stockholders' Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 5 – STOCKHOLDERS’ EQUITY Preferred Stock The Company is authorized to issue 50,000,000 shares of preferred stock, with par value of $0.001 per share, of which 75,000 shares have been designated as Series B 10% Convertible preferred stock, with par value of $0.001 per share, and 672,000 shares have been designated as Series C Convertible preferred stock. There were 75,000 Series B shares and 672,000 Series C shares issued and outstanding as of September 30, 2015. Common Stock The Company is authorized to issue 500,000,000 shares of common stock, with par value of $0.001 per share. As of September 30, 2015 and December 31, 2014, there were 448,809,894 and 98,381,445 shares of common stock issued and outstanding, respectively. During the nine months ended September 30, 2015, we issued 348,278,449 shares of common stock upon the conversion of $630,923 of debt principal and $54,128 of accrued interest. During June 2015 we issued stock grants of 1,000,000 shares to each of two directors, valued at $22,600. The grants vest upon the one year anniversary of issuance. The expense will be recorded over that one year period. One of these grants was forfeited during the third quarter. We have recorded expense of $1,875 and $3,775 for the three and nine months ended September 30, 2015, respectively. During June 2015 we issued 150,000 shares of common stock, valued at $1,950, as payment for financing activities. During May 2014 we issued a stock grant to an employee in the amount of 200,000 shares of common stock, valued at $34,000. The grant vests upon the two year anniversary, on May 29, 2016. The expense will be recorded over that two year period. We have recorded an expense of $4,250 and $12,750 for the three and nine months ended September 30, 2015, respectively. Options Outstanding We have recorded an expense for employee options of $64,334 and $248,877 for the three and nine months ended September 30, 2015, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 6 – COMMITMENTS AND CONTINGENCIES LEASE Effective July 2015 we entered into an office lease with a five year term expiring in July, 2020. Annual minimum lease payments range from approximately $33,000 for the first year to approximately $47,000 for the final year. Rent expense for the three months ended September 30, 2015 and 2014 was $8,460 and $26,178, respectively. Rent expense for the nine months ended September 30, 2015 and 2014 was $42,361 and $88,604, respectively. LITIGATION From time to time, the Company and its subsidiaries may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. The Company and its subsidiaries are currently not aware of any such legal proceedings or claims that they believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 7 – SUBSEQUENT EVENTS Common Shares Issued During the month of October 2015, we issued 36,300,266 shares of common stock upon the conversion of $36,800.27 of note principal. During the month of November 2015, we issued 9,500,000 shares of common stock upon the conversion of $9,500 of note principal. During the month of April 2016 we cancelled 1,100,000 shares of common stock which had been issued as compensation to a former Board Member, pursuant to the request of the former Board Member. During the month of May 2016, we issued 40,000,000 shares of common stock upon the conversion of $10,000 of note principal. During the month of June 2016, we issued 76,000,000 shares of common stock upon the conversion of $13,300 of note principal. During the month of July 2016, we issued 16,000,000 shares of common stock upon the conversion of $2,800 of note principal. Amendment to Articles of Incorporation At the Special Meeting of Stockholders held on March 28, 2016, the stockholders of Thinspace Technology, Inc. approved an amendment to the Company’s charter to increase the total number of authorized shares of the Company’s common stock from 500,000,000 to 3,500,000,000 shares, $0.001 par value per share. The charter amendment became effective on May 2, 2016 upon filing with, and acceptance for record by, the Delaware Secretary of State. Debt Financings On November 18, 2015, the Company issued and sold to Rockwell Capital Partners, Inc. (“Rockwell”) an 8% convertible debenture in the principal amount of up to $125,000. The debenture is convertible into the Company’s common stock at a conversion price equal to 65% of the lowest closing bid price of the common stock for the twenty trading days prior to conversion. Repayment of the debenture is due two years from the date of issuance. The Company received funds aggregating $25,000 pursuant to the Note during the month of November 2015. During the month of November the Company entered into an amendment of a $100,000 Note originally entered into with IBC Equity Holdings on October 8, 2014 whereby an option for conversion of any or all outstanding portion of the note into shares of common stock was added. The debenture is convertible into the Company’s common stock at a conversion price equal to 65% of the lowest closing bid price of the common stock for the twenty trading days prior to conversion During the month of November the Company entered into an amendment of a $300,000 Note originally entered into with IBC Equity Holdings on October 8, 2014 whereby an option for conversion any or all outstanding portion of the note into shares of common stock was added. The debenture is convertible into the Company’s common stock at a conversion price equal to 65% of the lowest closing bid price of the common stock for the twenty trading days prior to conversion On November 18, 2015, the Company issued and sold to IBC Funds, LLC, (“IBC Funds”) an 8% convertible debenture in the principal amount of $101,978.91. The debenture is convertible into the Company’s common stock at a conversion price equal to 65% of the lowest closing bid price of the common stock for the twenty trading days prior to conversion. Repayment of the debenture is due two years from the date of issuance. On December 9, 2015, the Company issued and sold to Blue Citi, LLC, (“Blue Citi”) an 8% convertible debenture in the principal amount of up to $150,000. The debenture is convertible into the Company’s common stock at a conversion price equal to 65% of the lowest trading price of the common stock for the twenty trading days prior to conversion. Repayment of the debenture is due January 15, 2018. The Company received funds pursuant to the Note aggregating $49,000 during the month of December 2015 and $101,000 in the month of January 2016. During the month of March 2016 the Company received funds, aggregating $20,000, pursuant to a Securities Purchase Agreement originally entered into with Rockwell Capital Partners, Inc. (“Rockwell”) dated November 18, 2015 in which the Company sold to Rockwell an 8% convertible debenture in the principal amount of up to $125,000. On May 2, 2016, the Company issued and sold to Rockwell Capital Partners, Inc. (“Rockwell”) an 8% convertible debenture in the principal amount of up to $360,000. The debenture is convertible into the Company’s common stock at a conversion price equal to 65% of the lowest closing bid price of the common stock for the twenty trading days prior to conversion. Repayment of the debenture is due two years from the date of issuance. The Company received funds aggregating $130,000 pursuant to the Note during the month of May 2016. On May 4, 2016, the Company issued and sold to Blue Citi, LLC, (“Blue Citi”) an 8% convertible debenture in the principal amount of up to $45,000. The debenture is convertible into the Company’s common stock at a conversion price equal to 65% of the lowest trading price of the common stock for the twenty trading days prior to conversion. Repayment of the debenture is due May 4, 2018. On July 25, 2016 the Note was amended to a principal amount of up to $25,000. During the month of June 2016 the Company received funds, aggregating $90,000, pursuant to a Securities Purchase Agreement originally entered into with Rockwell Capital Partners, Inc. (“Rockwell”) dated May 2, 2016 in which the Company sold to Rockwell an 8% convertible debenture in the principal amount of up to $360,000. During the month of August 2016 the Company received funds, aggregating $60,000, pursuant to a Securities Purchase Agreement originally entered into with Rockwell Capital Partners, Inc. (“Rockwell”) dated May 2, 2016 in which the Company sold to Rockwell an 8% convertible debenture in the principal amount of up to $360,000. On August 10, 2016 the Company issued to Rockwell Capital Partners, Inc. (“Rockwell”) a 10% Promissory Note in the amount of $30,250 with an OID of $2,750. The Note matures on August 9, 2017 and requires a monthly payment of $2,653.40. During the month of September 2016 the Company received funds, aggregating $25,000, pursuant to a Securities Purchase Agreement originally entered into with Blue Citi, LLC (“Blue Citi”) dated May 4, 2016 in which the Company sold to Blue Citi an 8% convertible debenture in the principal amount of up to $45,000. Legal Matters On April 9, 2015, the Company entered into and closed a securities purchase agreement with St. George Investments LLC (“St. George”), pursuant to which the Company issued and sold to St. George an 8% convertible promissory note in the principal amount of $107,500 for a purchase price of $100,000. The note is convertible into the Company’s common stock at a conversion price equal to 65% of the lowest closing bid price of the common stock for the twenty trading days prior to conversion. Repayment of the note is due one year from the date of issuance. During the month of September 2016 the Company received notice of a default judgment in the principal amount of $261,462.79, plus interest at 18% per annum, awarded to St. George Investments, LLC in Case No. 160903366 in the Third Judicial District Court of Salt Lake County, State of Utah on September 19, 2016. The judgment of $261,462.79 includes principal, default penalties and interest. On November 11, 2015 the Company entered into an amended employment agreement with its Chief Executive Officer whereby Mr. Bautista’s annual salary was reduced to $60,000. In addition, Mr. Bautista will be eligible to receive commission on all software maintenance agreements which are renewed or entered into from the company's current user install base at a rate of 10% of the net renewal rate - which is invoiced price less any taxes or prepayment discounts. Additionally, employee will be entitled to a commission at a rate of 10% of the net margin on any new sales of the company’s current released products, based on the net margin to the company which would be calculated based on Gross Sales – Channel/customer discounts- cost of goods = net margin, payment of commission will be paid within 30 days of receipt of funds from the customers. In addition, Mr. Bautista forfeited the option to purchase Five Million (5,000,000) shares of the Company’s common stock with an exercise price of $0.17 and agreed that at termination of employment he will not be eligible to receive severance payments. |
Summary of Significant Accoun13
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
PRINCIPLES OF CONSOLIDATION | PRINCIPLES OF CONSOLIDATION The unaudited condensed consolidated financial statements include the accounts of Thinspace Technology, Inc. and its wholly-owned subsidiaries, Thinspace UK and Thinspace US. All material inter-company accounts and transactions have been eliminated. |
USE OF ESTIMATES | USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
CASH AND CASH EQUIVALENTS | CASH AND CASH EQUIVALENTS We consider all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE Accounts receivable are reported at the customers' outstanding balances less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable. The Company evaluates receivables on a regular basis for potential reserve. The accounts receivable balances of $68,205 and $158,329 as of September 30, 2015 and December 31, 2014, respectively, do not include an allowance for doubtful accounts as the Company anticipates payment on all accounts within the next fiscal year. The Company routinely evaluates accounts receivable for uncollectible amounts. |
REVENUE RECOGNITION | REVENUE RECOGNITION The Company is party to certain volume licensing arrangements that include a perpetual license for current products combined with rights to receive unspecified future versions of software products, which the Company has determined are additional software products and are therefore accounted for as subscriptions, with billings recorded as unearned revenue and recognized as revenue ratably over the coverage period. Arrangements that include term based licenses for current products with the right to use unspecified future versions of the software during the coverage period are also accounted for as subscriptions, with revenue recognized ratably over the coverage period. Revenue from cloud-based services arrangements that allow for the use of a hosted software product or service over a contractually determined period of time without taking possession of software are accounted for as subscriptions with billings recorded as unearned revenue and recognized as revenue ratably over the coverage period beginning on the date the service is made available to customers. Some volume licensing arrangements include time-based subscriptions for cloud-based services and software offerings that are accounted for as subscriptions. These arrangements are considered multiple element arrangements. However, because all elements are accounted for as subscriptions and have the same coverage period and delivery pattern, they have the same revenue recognition timing. |
DEFERRED REVENUE | DEFERRED REVENUE Deferred revenue related to support and maintenance is recorded in a manner consistent with the Company’s revenue recognition policy. The Company typically enters into one-year upgrade and maintenance contracts with its customers. The upgrade and maintenance contracts are generally paid in advance but can be billed monthly or quarterly. The Company defers such payments and recognizes revenue ratably over the contract period. |
INVENTORY | INVENTORY The Company values its inventory at the lower of cost (first-in, first-out) or market. The Company uses estimates and judgments regarding the valuation of inventory to properly value inventory. Inventory adjustments are made for the difference between the cost of the inventory and the estimated realizable value and charged to cost of goods sold in the period in which the facts that give rise to the adjustments become known. |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS Our short-term financial instruments, including cash, accounts receivable and accounts payable and accrued expenses consist primarily of instruments without extended maturities, the fair value of which, based on management’s estimates, reasonably approximate their book value. The fair value of our notes and advances payable is based on management estimates and reasonably approximates their book value based on their terms. Fair value measurements ASC 820 “Fair Value Measurements and Disclosure” establishes a framework for measuring fair value and expands disclosure about fair value measurements. ASC 820 defines fair value as the amount that would be received for an asset or paid to transfer a liability (i.e., an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes the following three levels of inputs that may be used: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. In accordance with ASC 820, the following table represents the Company's fair value hierarchy for its financial assets and (liabilities) measured at fair value on a recurring basis as of September 30, 2015: Level 1 Level 2 Level 3 Total Liabilities Conversion derivative liabilities $ — $ — $ 3,869,620 $ 3,869,620 Total Liabilities $ — $ — $ 3,869,620 $ 3,869,620 The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities (conversion and warrant derivative liabilities) for the nine months ended September 30, 2015. Balance at beginning of year $ 12,173,986 Additions and modifications to derivative instruments 3,569,343 Change in fair value of derivative liabilities (9,489,141 ) Extinguishment of derivative liabilities (2,384,568 ) Balance at end of period $ 3,869,620 The following is a description of the valuation methodologies used for these items: Conversion derivative liability |
CONVERTIBLE INSTRUMENTS | CONVERTIBLE INSTRUMENTS The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for “Accounting for Derivative Instruments and Hedging Activities” (“ASC 815-40”). The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standards when “Accounting for Convertible Securities with Beneficial Conversion Features,” as those professional standards pertain to “Certain Convertible Instruments.” Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. ASC 815-40 provides that, among other things, generally, if an event is not within the entity’s control could or require net cash settlement, then the contract shall be classified as an asset or a liability. |
DERIVATIVE LIABILITIES | DERIVATIVE LIABILITIES ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as freestanding derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described. |
CONCENTRATIONS OF CREDIT RISK | CONCENTRATIONS OF CREDIT RISK The Company performs ongoing credit evaluations of its customers. At September 30, 2015, three customers accounted for 69% of accounts receivable. The Company maintains cash and cash equivalents with major financial institutions. Cash held in US bank accounts is insured up to $250,000 at each institution. Cash held in UK bank accounts is insured up to £85,000 (approximately $129,000 at September 30, 2015) at each institution for each entity. At times, cash balances may exceed the insured limits. The Company has not experienced any loss on these accounts. The balances are maintained in demand accounts to minimize risk. |
RESEARCH AND DEVELOPMENT | RESEARCH AND DEVELOPMENT Expenses related to present and future products are expensed as incurred. |
FOREIGN CURRENCY TRANSLATION | FOREIGN CURRENCY TRANSLATION The financial statements of the Company’s U.K. subsidiary, Thinspace UK, are measured using the British Pound as the functional currency. Assets, liabilities and equity accounts of the company are translated at exchange rates as of the balance sheet date or historical acquisition date, depending on the nature of the account. Revenues and expenses are translated at average rates of exchange in effect throughout the year. The resulting cumulative translation adjustments have been recorded as a separate component of stockholders' equity. The unaudited condensed consolidated financial statements are presented in United States of America dollars. |
INCOME (LOSS) PER SHARE | INCOME (LOSS) PER SHARE We use ASC 260, “Earnings Per Share” for calculating the basic and diluted income (loss) per share. We compute basic income (loss) per share by dividing net income (loss) and net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding. Diluted earnings per share for the three and nine months ended September 30, 2015 have been calculated as follows: Three Months Ended September 30, 2015 Nine Months Ended September 30, 2015 Income available to common shareholders $ 36,231,484 $ 4,654,412 Preferred dividend 1,875 5,625 Income attributable to convertible instruments (37,190,422 ) (9,569,817 ) Expense attributable to convertible instruments 687,899 3,369,249 Diluted loss $ (269,164 ) $ (1,540,531 ) Basic shares outstanding 353,913,823 189,737,454 Convertible instruments 146,086,177 310,262,546 Diluted shares outstanding 500,000,000 500,000,000 Diluted EPS $ (0.00 ) $ (0.00 ) Additional potentially dilutive shares of approximately 4 billion shares at September 30, 2015 have been excluded from the calculation since they exceed authorized shares available. |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In June 2014, 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 In November 2015, the FASB issued ASU 2015-17, “ Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes In January 2016, the FASB issued ASU 2016-01, “ Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, the FASB issued ASU 2016-02, “ Leases (Topic 842) In March 2016, the FASB issued ASU 2016-09, “ Improvements to Employee Share-Based Payment Accounting In April 2016, the FASB issued ASU 2016-10 “ Revenue from Contracts with Customers (Topic 606)” In May 2016, the FASB issued ASU 2016-12, “ Revenue from Contracts with Customers(Topic 606): Narrow-Scope Improvements and Practical Expedients The Company does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying consolidated financial statements. |
Summary of Significant Accoun14
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of financial assets and liabilities measured at fair value on recurring basis | Level 1 Level 2 Level 3 Total Liabilities Conversion derivative liabilities $ — $ — $ 3,869,620 $ 3,869,620 Total Liabilities $ — $ — $ 3,869,620 $ 3,869,620 |
Schedule of changes in fair value of Company's Level 3 financial liabilities (conversion and warrant derivative liabilities) | 2015 Balance at beginning of year $ 12,173,986 Additions and modifications to derivative instruments 3,569,343 Change in fair value of derivative liabilities (9,489,141 ) Extinguishment of derivative liabilities (2,384,568 ) Balance at end of period $ 3,869,620 |
Schedule of diluted earnings per share | Three Months Ended September 30, 2015 Nine Months Ended September 30, 2015 Income available to common shareholders $ 36,231,484 $ 4,654,412 Preferred dividend 1,875 5,625 Income attributable to convertible instruments (37,190,422 ) (9,569,817 ) Expense attributable to convertible instruments 687,899 3,369,249 Diluted loss $ (269,164 ) $ (1,540,531 ) Basic shares outstanding 353,913,823 189,737,454 Convertible instruments 146,086,177 310,262,546 Diluted shares outstanding 500,000,000 500,000,000 Diluted EPS $ (0.00 ) $ (0.00 ) |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Liabilities [Abstract] | |
Schedule of derivative liability activity | Balance at December 31, 2014 Additions Modifications Conversions Reclassifications Change in Value Balance at September 30, 2015 Convertible notes, interest and debt settlement $ 9,471,074 $ 3,233,146 $ — $ (2,253,031 ) $ (131,537 ) $ (7,037,755 ) $ 3,281,897 Convertible preferred stock 2,702,912 — 336,197 — — (2,451,386 ) 587,723 $ 12,173,986 $ 3,233,146 $ 336,197 $ (2,253,031 ) $ (131,537 ) $ (9,489,141 ) $ 3,869,620 |
Organization and Line of Busi16
Organization and Line of Business (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Organization and Line of Business (Textual) | |||||
Net income | $ 36,233,359 | $ (19,092,527) | $ 4,660,037 | $ (25,053,886) | |
Negative working capital | 7,871,309 | 7,871,309 | |||
Change in value of derivative liabilities | 9,000,000 | ||||
Stockholders' deficit | $ (7,818,926) | $ (7,818,926) | $ (15,448,622) |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Liabilities | ||
Conversion derivative liabilities | $ 3,869,620 | $ 12,173,986 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | ||
Liabilities | ||
Conversion derivative liabilities | ||
Total Liabilities | ||
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | ||
Liabilities | ||
Conversion derivative liabilities | ||
Total Liabilities | ||
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ||
Liabilities | ||
Conversion derivative liabilities | 3,869,620 | |
Total Liabilities | 3,869,620 | |
Fair Value, Measurements, Recurring [Member] | Total | ||
Liabilities | ||
Conversion derivative liabilities | 3,869,620 | |
Total Liabilities | $ 3,869,620 |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Details 1) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at beginning of year | $ 12,173,986 | |
Additions and modifications to derivative instruments | 3,569,343 | |
Change in fair value of derivative liabilities | 9,489,141 | $ (15,447,215) |
Extinguishment of derivative liabilities | (2,384,568) | |
Balance at end of period | $ 3,869,620 |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Details 2) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income (loss) per share [Abstract] | ||||
Income available to common shareholders | $ 36,231,484 | $ (19,094,402) | $ 4,654,412 | $ (25,059,511) |
Preferred dividend | 1,875 | 1,875 | 5,625 | 5,625 |
Income attributable to convertible instruments | (37,190,422) | (9,569,817) | ||
Expense attributable to convertible instruments | 687,899 | 1,883,300 | 3,369,249 | 7,354,199 |
Diluted loss | $ (269,164) | $ (673,784) | $ (1,540,531) | $ (2,428,580) |
Weighted Average Number of Shares Outstanding, Basic | 353,913,823 | 96,085,012 | 189,737,454 | 92,807,067 |
Convertible instruments | 146,086,177 | 310,262,546 | ||
Weighted Average Number of Shares Outstanding, Diluted | 500,000,000 | 96,085,012 | 500,000,000 | 92,807,067 |
Earnings Per Share, Diluted | $ 0 | $ (0.2) | $ 0 | $ (0.27) |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Detail Textual) | 9 Months Ended | |||
Sep. 30, 2015USD ($)shares | Sep. 30, 2014shares | Sep. 30, 2015GBP (£) | Dec. 31, 2014USD ($) | |
Summary of Significant Accounting Policies (Textual) | ||||
Accounts receivable | $ 68,205 | $ 158,329 | ||
Common share equivalents excluded from the computation of the weighted average diluted shares | shares | 4,382,560,883 | 270,375,324 | ||
Three Customers [Member] | Accounts Receivable [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Concentration risk, percentage | 69.00% | |||
US Bank [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Cash | $ 250,000 | |||
UK Bank [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Cash | $ 129,000 | £ 85,000 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details) - USD ($) | Aug. 10, 2015 | May 14, 2015 | Apr. 10, 2015 | Apr. 09, 2015 | Apr. 06, 2015 | Mar. 23, 2015 | Mar. 20, 2015 | May 29, 2014 | Sep. 30, 2015 | May 31, 2015 | Apr. 30, 2015 | Mar. 31, 2015 | Feb. 28, 2015 | Jan. 31, 2015 | Dec. 31, 2014 |
Convertible Notes Payable (Textual) | |||||||||||||||
Fair value assumptions, expected life (in years) | 5 years | ||||||||||||||
Conversion derivative liabilities | $ 3,869,620 | $ 12,173,986 | |||||||||||||
Black Mountain Equities Inc [Member] | |||||||||||||||
Convertible Notes Payable (Textual) | |||||||||||||||
Principal amount paid in cash | $ 70,000 | ||||||||||||||
Black Mountain Equities Inc [Member] | Non-convertible Note [Member] | |||||||||||||||
Convertible Notes Payable (Textual) | |||||||||||||||
Debt instrument, principal amount | $ 30,000 | ||||||||||||||
Convertible Debt [Member] | |||||||||||||||
Convertible Notes Payable (Textual) | |||||||||||||||
Convertible note payable | 361,000 | ||||||||||||||
Convertible Debt [Member] | IBC Funds, LLC (IBC) [Member] | |||||||||||||||
Convertible Notes Payable (Textual) | |||||||||||||||
Convertible note payable | $ 617,000 | $ 305,000 | $ 305,000 | $ 305,000 | $ 305,000 | $ 167,000 | $ 167,000 | ||||||||
Annual interest rate on convertible debentures | 8.00% | ||||||||||||||
Debt instrument, principal amount | $ 617,500 | ||||||||||||||
Number of trading days of conversion | 20 days | ||||||||||||||
Percentage of discounts to market price of common stock | 40.00% | ||||||||||||||
Convertible Debt [Member] | Greystone Capital Partners Inc [Member] | |||||||||||||||
Convertible Notes Payable (Textual) | |||||||||||||||
Convertible note payable | $ 305,000 | $ 56,000 | |||||||||||||
Annual interest rate on convertible debentures | 8.00% | ||||||||||||||
Debt instrument, principal amount | $ 617,500 | ||||||||||||||
Number of trading days of conversion | 20 days | ||||||||||||||
Percentage of discounts to market price of common stock | 40.00% | ||||||||||||||
Convertible Debt [Member] | LG Capital Funding LLC [Member] | |||||||||||||||
Convertible Notes Payable (Textual) | |||||||||||||||
Annual interest rate on convertible debentures | 8.00% | ||||||||||||||
Debt instrument, principal amount | $ 137,500 | ||||||||||||||
Proceeds from convertible debt | $ 131,250 | ||||||||||||||
Description of convertible note | The outstanding principal and accrued interest on the note into shares of the Company's common stock, at a conversion price equal to 70% of the average of the 5 lowest closing prices of the common stock for the twenty prior trading days including the day upon which a notice of conversion is received by the Company. | ||||||||||||||
Number of trading days of conversion | 20 days | ||||||||||||||
Convertible Debt [Member] | Iconic Holdings LLC [Member] | |||||||||||||||
Convertible Notes Payable (Textual) | |||||||||||||||
Annual interest rate on convertible debentures | 6.00% | ||||||||||||||
Debt instrument, principal amount | $ 50,000 | ||||||||||||||
Proceeds from convertible debt | $ 50,000 | ||||||||||||||
Description of convertible note | The outstanding principal and accrued interest on the note into shares of the Company's common stock, at a conversion price equal to 70% of the average of the 5 lowest closing prices of the common stock for the twenty prior trading days including the day upon which a notice of conversion is received by the Company. | ||||||||||||||
Number of trading days of conversion | 20 days | ||||||||||||||
Convertible Debt [Member] | Black Mountain Equities Inc [Member] | |||||||||||||||
Convertible Notes Payable (Textual) | |||||||||||||||
Annual interest rate on convertible debentures | 10.00% | ||||||||||||||
Debt instrument, principal amount | $ 105,000 | ||||||||||||||
Proceeds from convertible debt | $ 100,000 | ||||||||||||||
Description of convertible note | The outstanding principal and accrued interest on the note into shares of the Company's common stock, at a conversion price equal to the lesser of (a) $0.17 or (b) 70% of the average of the three lowest closing bids occurring during the twenty consecutive trading days immediately preceding the applicable conversion date. | ||||||||||||||
Number of trading days of conversion | 20 days | ||||||||||||||
Fair value assumptions, dividend yield | 0.00% | ||||||||||||||
Discount on issuance of debt | $ 1,346,077 | ||||||||||||||
Interest expenses | 1,088,661 | ||||||||||||||
Conversion derivative liabilities | $ 2,434,738 | ||||||||||||||
Convertible Debt [Member] | Black Mountain Equities Inc [Member] | Minimum [Member] | |||||||||||||||
Convertible Notes Payable (Textual) | |||||||||||||||
Fair value assumptions, risk free interest rate | 0.265% | ||||||||||||||
Fair value assumptions, expected volatility rate | 165.00% | ||||||||||||||
Fair value assumptions, expected life (in years) | 1 year | ||||||||||||||
Convertible Debt [Member] | Black Mountain Equities Inc [Member] | Maximum [Member] | |||||||||||||||
Convertible Notes Payable (Textual) | |||||||||||||||
Fair value assumptions, risk free interest rate | 0.625% | ||||||||||||||
Fair value assumptions, expected volatility rate | 210.00% | ||||||||||||||
Fair value assumptions, expected life (in years) | 2 years 5 months 1 day | ||||||||||||||
Convertible Debt [Member] | RDW Capital, LLC [Member] | |||||||||||||||
Convertible Notes Payable (Textual) | |||||||||||||||
Annual interest rate on convertible debentures | 6.00% | ||||||||||||||
Debt instrument, principal amount | $ 105,000 | ||||||||||||||
Proceeds from convertible debt | $ 100,000 | ||||||||||||||
Debt conversion, Description | The debenture is convertible into the Company's common stock at a conversion price equal to 65% of the average of the 3 lowest closing prices of the common stock for the twenty trading days prior to conversion. | ||||||||||||||
Number of trading days of conversion | 20 days | ||||||||||||||
Convertible Debt [Member] | St. George Investments LLC [Member] | |||||||||||||||
Convertible Notes Payable (Textual) | |||||||||||||||
Annual interest rate on convertible debentures | 8.00% | ||||||||||||||
Debt instrument, principal amount | $ 107,500 | ||||||||||||||
Proceeds from convertible debt | $ 100,000 | ||||||||||||||
Debt conversion, Description | The note is convertible into the Company's common stock at a conversion price equal to 65% of the lowest closing bid price of the common stock for the twenty trading days prior to conversion. | ||||||||||||||
Number of trading days of conversion | 20 days | ||||||||||||||
Convertible Debt [Member] | Blue Citi PR [Member] | |||||||||||||||
Convertible Notes Payable (Textual) | |||||||||||||||
Convertible note payable | $ 395,000 | ||||||||||||||
Annual interest rate on convertible debentures | 8.00% | ||||||||||||||
Debt instrument, principal amount | $ 535,000 | ||||||||||||||
Proceeds from convertible debt | $ 500,000 | ||||||||||||||
Debt conversion, Description | The debenture is convertible into the Company's common stock at a conversion price equal to 65% of the average of the three lowest trading prices for the common stock for the twenty trading days prior to conversion. | ||||||||||||||
Number of trading days of conversion | 60 days | ||||||||||||||
Debt repayment term | i) $200,000 paid to the Company upon issuance; (ii) $200,000 payable to the Company on June 10, 2015; and $100,000 payable to the Company on July 10, 2015. Each such payment reflects a 7% original issue discount added to the principal amount at time of payment (up to $14,000). | (i) $200,000 was paid upon issuance; (ii) $200,000 is payable at Blue Citi's discretion at any time within 60 days of issuance provided that, if Blue Citi does not make such payment prior to the date this is 60 days from the date of issuance, Blue Citi will be required to make such payment on the date that is 60 days from the date of issuance, subject to the condition that the average trading price for the Company's common stock for the five trading days prior to the date that is 60 days from the date of issuance is equal to or greater than 50% of the 5 day average trading price prior to the date of issuance, and (iii) $100,000 at the sole discretion of Blue Citi within 365 days of the date of issuance provided that, if Blue Citi does not make the second $200,000 payment under the debenture within 60 days of the date of issuance, Blue Citi will not have the right to make such $100,000 payment. |
Derivative Liabilities (Details
Derivative Liabilities (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Beginning Balance | $ 12,173,986 | |
Additions | 3,233,146 | |
Modifications | 336,197 | |
Conversions | (2,253,031) | |
Reclassifications | (131,537) | |
Change in fair value of derivative liability | (9,489,141) | $ 15,447,215 |
Ending Balance | 3,869,620 | |
Convertible Preferred Stock [Member] | ||
Beginning Balance | 2,702,912 | |
Additions | ||
Modifications | 336,197 | |
Conversions | ||
Reclassifications | ||
Change in fair value of derivative liability | (2,451,386) | |
Ending Balance | 587,723 | |
Convertible notes, interest and debt settlement [Member] | ||
Beginning Balance | 9,471,074 | |
Additions | 3,233,146 | |
Modifications | ||
Conversions | (2,253,031) | |
Reclassifications | (131,537) | |
Change in fair value of derivative liability | (7,037,755) | |
Ending Balance | $ 3,281,897 |
Derivative Liabilities (Detai23
Derivative Liabilities (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | |
Short-term Debt [Line Items] | |||
Fair value assumptions, expected life (in years) | 5 years | ||
Accrued interest converted to common stock | $ 54,128 | $ 11,410 | |
Convertible Preferred Stock [Member] | |||
Short-term Debt [Line Items] | |||
Conversion feature liability | $ 587,731 | $ 587,731 | |
Fair value assumptions, risk free interest rate | 0.209% | ||
Fair value assumptions, dividend yield | 0.00% | ||
Fair value assumptions, expected volatility rate | 191.00% | ||
Fair value assumptions, expected life (in years) | 1 year | ||
Income related to change in fair value | $ 6,052,991 | $ 2,118,274 | |
Conversion price | $ 0.001755 | $ 0.001755 | |
Common shares issued for instrument exercisable | 42,735,043 | ||
Recorded income of fair value conversion feature | $ 234,162 | $ 333,112 | |
Recorded expense of fair value conversion feature | 22,911 | 336,197 | |
Convertible Debentures and Debt Settlement Agreement [Member] | |||
Short-term Debt [Line Items] | |||
Conversion feature liability | 3,281,889 | $ 3,281,889 | |
Fair value assumptions, dividend yield | 0.00% | ||
Income related to change in fair value | 28,249,012 | $ 4,814,818 | |
Additions to interest expense | 96,767 | 798,408 | |
Debt Instrument, principal amount | 630,923 | $ 630,923 | |
Converted shares of common stock | 348,278,449 | ||
Income for change in fair value of conversion feature | $ 2,596,238 | $ 2,222,937 | |
Convertible Debentures and Debt Settlement Agreement [Member] | Minimum [Member] | |||
Short-term Debt [Line Items] | |||
Fair value assumptions, risk free interest rate | 0.066% | ||
Fair value assumptions, expected volatility rate | 191.00% | ||
Fair value assumptions, expected life (in years) | 3 months | ||
Convertible Debentures and Debt Settlement Agreement [Member] | Maximum [Member] | |||
Short-term Debt [Line Items] | |||
Fair value assumptions, risk free interest rate | 0.417% | ||
Fair value assumptions, expected volatility rate | 248.00% | ||
Fair value assumptions, expected life (in years) | 1 year 7 months 28 days |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2015 | May 31, 2014 | Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Class of Stock [Line Items] | ||||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |||
Common stock, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | |||
Common stock, shares issued | 448,809,894 | 448,809,894 | 98,381,445 | |||
Common stock, shares outstanding | 448,809,894 | 448,809,894 | 98,381,445 | |||
Stock granted to each director | $ 34,000 | |||||
Stock granted to each director, shares | 200,000 | |||||
Issued common stock | $ 1,950 | |||||
Issued shares of common stock | 150,000 | |||||
Employee shares vesting period | 2 years | |||||
Compensation expense | $ 4,250 | $ 12,750 | ||||
Employee shares expiration date | May 29, 2016 | |||||
Accrued interest converted to common stock | 54,128 | $ 11,410 | ||||
Two Directors [Member] | ||||||
Class of Stock [Line Items] | ||||||
Stock granted to each director | $ 22,600 | |||||
Stock granted to each director, shares | 1,000,000 | |||||
Employee shares vesting period | 1 year | |||||
Compensation expense | 1,875 | 3,775 | ||||
Employee Stock Option [Member] | ||||||
Class of Stock [Line Items] | ||||||
Compensation expense | $ 64,334 | $ 248,877 | ||||
Series B Preferred Stock [Member] | ||||||
Class of Stock [Line Items] | ||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |||
Preferred stock, shares authorized | 75,000 | 75,000 | 75,000 | |||
Preferred stock, shares issued | 75,000 | 75,000 | 75,000 | |||
Preferred stock, shares outstanding | 75,000 | 75,000 | 75,000 | |||
Convertible preferred stock | 10.00% | 10.00% | ||||
Series C Preferred Stock [Member] | ||||||
Class of Stock [Line Items] | ||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |||
Preferred stock, shares authorized | 672,000 | 672,000 | 672,000 | |||
Preferred stock, shares issued | 672,000 | 672,000 | 672,000 | |||
Preferred stock, shares outstanding | 672,000 | 672,000 | 672,000 | |||
Preferred Stock [Member] | ||||||
Class of Stock [Line Items] | ||||||
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | ||||
Common Stock [Member] | ||||||
Class of Stock [Line Items] | ||||||
Converted shares of common stock | 348,278,449 | |||||
Debt Instrument, principal amount | $ 630,923 | $ 630,923 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Commitments and Contingencies [Line Items] | ||||
Short term lease on office space, expiration date | Jul. 31, 2020 | |||
Rent expense | $ 8,460 | $ 26,178 | $ 42,361 | $ 88,604 |
Lease term | 5 years | |||
Maximum [Member] | ||||
Commitments and Contingencies [Line Items] | ||||
Annual lease payments | 47,000 | $ 47,000 | ||
Minimum [Member] | ||||
Commitments and Contingencies [Line Items] | ||||
Annual lease payments | $ 33,000 | $ 33,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Aug. 10, 2016 | May 04, 2016 | Dec. 09, 2015 | Nov. 18, 2015 | Nov. 11, 2015 | Apr. 09, 2015 | Sep. 30, 2016 | Jul. 31, 2016 | Jun. 30, 2016 | May 31, 2016 | Apr. 30, 2016 | Nov. 30, 2015 | Oct. 31, 2015 | Aug. 31, 2016 | Jul. 25, 2016 | May 02, 2016 | Mar. 31, 2016 | Mar. 28, 2016 | Jan. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 | May 29, 2014 |
Subsequent Event [Line Items] | |||||||||||||||||||||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | |||||||||||||||||||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||||||||||||||||||||
Convertible promissory note in the principal amount | $ 849,396 | ||||||||||||||||||||||
IBC Funds, LLC (IBC) [Member] | Convertible Debt [Member] | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Debt instrument, principal amount | $ 617,500 | ||||||||||||||||||||||
St. George Investments, LIC [Member] | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Convertible promissory note in the principal amount | $ 107,500 | ||||||||||||||||||||||
Proceeds from purchase price received | $ 100,000 | ||||||||||||||||||||||
Subsequent Event [Member] | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Common stock shares issued upon conversion, value | $ 2,800 | $ 13,300 | $ 10,000 | $ 9,500 | $ 36,800.27 | ||||||||||||||||||
Common stock shares issued upon conversion | 16,000,000 | 76,000,000 | 40,000,000 | 9,500,000 | 36,300,266 | ||||||||||||||||||
Cancellation of common stock shares | 1,100,000 | ||||||||||||||||||||||
Common stock, shares authorized | 500,000,000 | ||||||||||||||||||||||
Increased number of authorized shares | 3,500,000,000 | ||||||||||||||||||||||
Common stock, par value (in dollars per share) | $ 0.001 | ||||||||||||||||||||||
Subsequent Event [Member] | Mr. Bautista's [Member] | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Annual salary was reduced | $ 60,000 | ||||||||||||||||||||||
Current user install base at a rate of net renewal rate | 10.00% | ||||||||||||||||||||||
Commission at a rate | 10.00% | ||||||||||||||||||||||
Forfeited option to purchase | 5,000,000 | ||||||||||||||||||||||
Company's common stock with exercise price | $ 0.17 | ||||||||||||||||||||||
Subsequent Event [Member] | Rockwell Capital Partners, Inc. [Member] | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Proceeds from convertible debt | $ 25,000 | $ 130,000 | |||||||||||||||||||||
Debt instrument, principal amount | $ 90,000 | $ 60,000 | $ 20,000 | ||||||||||||||||||||
Debt instruments percentage | 10.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | |||||||||||||||||
Maximum borrowing line of credit | $ 125,000 | $ 360,000 | $ 360,000 | $ 360,000 | $ 125,000 | ||||||||||||||||||
Principal amount paid in cash | $ 2,653.40 | ||||||||||||||||||||||
Common stock conversion percentage | 65.00% | 65.00% | |||||||||||||||||||||
Debenture due date | Aug. 9, 2017 | ||||||||||||||||||||||
Debenture due description | Repayment of the debenture is due two years from the date of issuance. | Repayment of the debenture is due two years from the date of issuance. | |||||||||||||||||||||
OID amount | $ 2,750 | ||||||||||||||||||||||
Debt amount | $ 30,250 | ||||||||||||||||||||||
Subsequent Event [Member] | IBC Equity Holdings [Member] | Convertible Debt [Member] | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Debt instrument, principal amount | $ 100,000 | ||||||||||||||||||||||
Common stock conversion percentage | 65.00% | ||||||||||||||||||||||
Subsequent Event [Member] | IBC Equity Holdings [Member] | Convertible debt one [Member] | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Debt instrument, principal amount | $ 300,000 | ||||||||||||||||||||||
Common stock conversion percentage | 65.00% | ||||||||||||||||||||||
Subsequent Event [Member] | IBC Funds, LLC (IBC) [Member] | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Debt instrument, principal amount | $ 101,978.91 | ||||||||||||||||||||||
Debt instruments percentage | 8.00% | ||||||||||||||||||||||
Common stock conversion percentage | 65.00% | ||||||||||||||||||||||
Debenture due description | Repayment of the debenture is due two years from the date of issuance | ||||||||||||||||||||||
Subsequent Event [Member] | St. George Investments, LIC [Member] | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Debt instruments percentage | 18.00% | ||||||||||||||||||||||
Judgment amount | $ 261,462.79 | ||||||||||||||||||||||
Subsequent Event [Member] | Blue Citi LLC [Member] | |||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||
Debt instrument, principal amount | $ 25,000 | $ 101,000 | $ 49,000 | ||||||||||||||||||||
Debt instruments percentage | 8.00% | 8.00% | 8.00% | ||||||||||||||||||||
Maximum borrowing line of credit | $ 45,000 | $ 150,000 | $ 45,000 | $ 25,000 | |||||||||||||||||||
Common stock conversion percentage | 65.00% | ||||||||||||||||||||||
Debenture due date | May 4, 2018 | ||||||||||||||||||||||
Debt Conversion, Description | The debenture is convertible into the Company's common stock at a conversion price equal to 65% of the lowest trading price of the common stock for the twenty trading days prior to conversion. Repayment of the debenture is due January 15, 2018. |