Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 12, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | Friendable, Inc. | |
Entity Central Index Key | 1,414,043 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 140,966,526 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,015 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Current Assets | ||
Cash | $ 320,692 | $ 0 |
Accounts receivable | 13,837 | 14,137 |
Prepaid expenses | 8,730 | 49,741 |
Debt issue costs (Note 12) | 220,630 | 47,122 |
Total current assets | 563,889 | 111,000 |
Non-current assets | ||
Intangible assets (Note 4) | 35,000 | 0 |
TOTAL ASSETS | 598,889 | 111,000 |
Current Liabilities | ||
Cheques issued in excess of cash on hand | 0 | 945 |
Accounts payable | 952,207 | 683,516 |
Convertible debentures (Note 12) | 251,131 | 120,432 |
Deferred revenue | 17,836 | 17,836 |
Promissory notes and accrued interest (Note 7) | 0 | 261,425 |
Total Liabilities | $ 1,221,174 | $ 1,084,154 |
Going concern (Note 1) | ||
Commitments (Note 9) | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock, 50,000,000 shares authorized at par value of $0.0001, 22,287 (December 31, 2014 - 22,807) shares issued and outstanding (Note 5) | $ 2 | $ 2 |
Common stock, 10,000,000,000 shares authorized at par value of $0.0001, 140,966,526 (December 31, 2014 - 8,802,940) shares issued and outstanding (Note 5) | 13,970 | 881 |
Additional paid-in capital | 5,906,876 | 3,340,495 |
Common stock subscriptions receivable (Note 10) | (4,500) | (4,500) |
Deficit | (6,538,633) | (4,310,032) |
Total Stockholders' Deficit | (622,285) | (973,154) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 598,889 | $ 111,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized shares | 50,000,000 | 50,000,000 |
Preferred stock, issued shares | 22,807 | 22,807 |
Preferred stock, outstanding shares | 22,807 | 22,807 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, Authorized | 10,000,000,000 | 10,000,000,000 |
Common stock, Issued | 140,966,526 | 8,802,940 |
Common stock, outstanding | 140,966,526 | 8,802,940 |
CONSOLIDATED STATEMENT OF COMPR
CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | ||||
REVENUES | $ 34,770 | $ 61,480 | $ 120,028 | $ 154,697 |
OPERATING EXPENSES | ||||
Accretion and interest expense | 349,306 | 297,753 | 996,696 | 771,893 |
App hosting (Note 10) | 100,161 | 53,416 | 276,221 | 103,897 |
Commissions | 10,431 | 18,444 | 36,008 | 46,409 |
Financing costs | 17,031 | 22,722 | 95,245 | 55,366 |
General and administrative (Note 10) | 197,641 | 313,164 | 684,100 | 1,010,962 |
Product development | 32,927 | 101,433 | 77,622 | 225,157 |
Sales and marketing | 38,799 | 228,271 | 187,833 | 486,310 |
TOTAL OPERATING EXPENSES | 746,296 | 1,035,203 | 2,353,725 | 2,699,994 |
LOSS FROM OPERATIONS | (711,526) | (973,723) | (2,233,697) | (2,545,297) |
OTHER INCOME (EXPENSES) | ||||
Impairment loss | 0 | 0 | 0 | (293,750) |
Gain on extinguishment of debt (Note 7) | 0 | 0 | 5,096 | 76,359 |
NET LOSS AND COMPREHENSIVE LOSS | $ (711,526) | $ (973,723) | $ (2,228,601) | $ (2,762,688) |
BASIC LOSS PER SHARE | $ (0.01) | $ (0.01) | $ (0.03) | $ (0.05) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | 130,123,048 | 990,512 | 76,690,053 | 571,945 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) | Common Stock | Preferred Stock | Additional Paid-In Capital | Common Stock Subscriptions Receivable | Deficit | Total |
Beginning Balance, Shares at Dec. 01, 2013 | 0 | |||||
Beginning Shares, Amount at Dec. 01, 2013 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | |
Shares issued for cash, shares | 5,413 | |||||
Shares issued for cash, amount | $ 1 | 4,999 | (5,000) | 0 | ||
Share subscribed received | 0 | |||||
Net loss | $ (16,109) | (16,109) | ||||
Ending Balance, Shares at Dec. 31, 2013 | 5,413 | |||||
Ending Balance, Amount at Dec. 31, 2013 | $ 1 | 4,999 | $ (5,000) | $ (16,109) | (16,109) | |
Issuance of preferred shares, shares | 588 | |||||
Issuance of preferred shares, amount | $ 1 | 293,749 | 293,750 | |||
Conversion of preferred shares, shares | 771,426 | (2,193) | ||||
Conversion of preferred shares, amount | $ 77 | $ (1) | (76) | |||
Reverse acquisition transaction, shares | 111,000 | 24,413 | ||||
Reverse acquisition transaction, amount | $ 11 | $ 2 | 479,546 | $ (612,256) | (132,697) | |
Share subscribed received | $ 500 | 500 | ||||
Shares issued for services, shares | 197,495 | |||||
Shares issued for services, amount | $ 20 | 269,696 | 269,716 | |||
Conversion of convertible notes, shares | 7,717,606 | |||||
Conversion of convertible notes (net) | $ 772 | 2,292,581 | 2,293,353 | |||
Net loss | $ (3,681,667) | (3,681,667) | ||||
Ending Balance, Shares at Dec. 31, 2014 | 8,802,940 | 22,807 | ||||
Ending Balance, Amount at Dec. 31, 2014 | $ 881 | $ 2 | 3,340,495 | $ (4,500) | (4,310,032) | (973,154) |
Conversion of preferred shares, shares | 9,341,596 | (520) | ||||
Conversion of preferred shares, amount | $ 934 | (934) | ||||
Share subscribed received | 0 | |||||
Shares issued for services, shares | 1,150,000 | |||||
Shares issued for services, amount | $ 115 | 6,325 | 6,440 | |||
Conversion of convertible notes, shares | 121,671,990 | |||||
Conversion of convertible notes (net) | $ 12,040 | 227,991 | 240,031 | |||
Issuance of Convertible notes (net), amount | 2,332,999 | 2,332,999 | ||||
Net loss | (2,228,601) | (2,228,601) | ||||
Ending Balance, Shares at Sep. 30, 2015 | 140,966,526 | 22,287 | ||||
Ending Balance, Amount at Sep. 30, 2015 | $ 13,970 | $ 2 | $ 5,906,876 | $ (4,500) | $ (6,538,633) | $ (622,285) |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOW - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Cash Flows from Operating Activities: | ||||||
Net loss | $ (16,109) | $ (711,526) | $ (973,723) | $ (2,228,601) | $ (2,762,688) | $ (3,681,667) |
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: | ||||||
Impairment loss | 0 | 0 | 0 | 293,750 | ||
Debt issue costs | 0 | 13,146 | ||||
Interest on promissory note | 22,965 | 3,863 | ||||
Accretion expense | 837,244 | 751,339 | ||||
Gain on extinguishment of debt | 0 | 0 | (5,096) | (76,359) | ||
Shares issued for services | 47,893 | 228,066 | ||||
Changes in Operating Assets and Liabilities | ||||||
Decrease (increase) in accounts receivable | 300 | (5,673) | ||||
Decrease (increase) in prepaid expenses | (442) | 21,910 | ||||
Increase (decrease) in accounts payable | 370,979 | 419,745 | ||||
Net Cash Used in Operating Activities | (954,758) | (1,112,900) | ||||
Cash Flows provided by (used in) Investing Activities: | ||||||
Acquisition of intangible assets | (35,000) | 0 | ||||
Cash acquired in the Merger | 0 | 966 | ||||
Net Cash Provided by (used in) Investing Activities | (35,000) | 966 | ||||
Cash Flows from Financing Activities: | ||||||
Proceeds from convertible debentures (net) | 1,311,395 | 885,910 | ||||
Proceeds from promissory notes | 0 | 250,000 | ||||
Share subscriptions received | 0 | 0 | 500 | 500 | ||
Net Cash Provided by Financing Activities | 1,311,395 | 1,136,410 | ||||
Net Increase in Cash | 321,637 | 24,476 | ||||
Cash (cheques issues in excess of cash on hand) - Beginning | (945) | 0 | 0 | |||
Cash- Ending | $ 0 | $ 320,692 | $ 24,476 | $ 320,692 | $ 24,476 | $ (945) |
Supplemental Cash Flow Information: | ||||||
Cash paid for interest | ||||||
Cash paid for income taxes | ||||||
Non-cash Investing and Financing Items: | ||||||
Shares issued for conversion of debt (net) | $ 240,031 | $ 939,250 | ||||
Convertible debentures issued to extinguish promissory notes | $ 261,425 | $ 0 |
1. NATURE OF BUSINESS AND GOING
1. NATURE OF BUSINESS AND GOING CONCERN | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF BUSINESS AND GOING CONCERN | Friendable, Inc., a Nevada corporation (the Company), was incorporated in the State of Nevada with a plan to produce user-friendly software that creates interactive digital yearbook software for schools. Effective June 15, 2011, the Company completed a merger with its subsidiary, Titan Iron Ore Corp., a Nevada corporation, which was incorporated solely to effect a change in the Companys name from Digital Yearbook Inc. to Titan Iron Ore Corp. The Company then began to pursue business in the area of mining exploration. On February 3, 2014, the Company entered into an Agreement and Plan of Merger and Reorganization (the Merger) The Merger was regarded as a reverse recapitalization whereby iHookup-DE was considered to be the accounting acquirer as its stockholders retained control of the Company after the Merger. During the year ended December 31, 2014, the Merger was completed and as a result, iHookup-DE acquired the net liabilities of the Company. As a result of the Merger, the Company ceased its prior operations and its business became the development and dissemination of a proximity based mobile-social media application that facilitates connections between people, utilizing the intelligence of global positioning system and localized recommendations. On September 28, 2015 the Company filed a Certificate of Amendment to its Articles of Incorporation changing the name of the Company from iHookup Social, Inc. to Friendable, Inc.. On October 27, 2015 the Companys trading symbol on the OTC Pink marketplace was changed from HKUP to FDBL. This change was made in conjunction with the re-branding of the Companys app from "iHookup Social" to "Friendable". The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which implies that the Company would continue to realize its assets and discharge its liabilities in the normal course of business. The Company has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. As of September 30, 2015 the Company has a working capital deficiency of $657,285 and has an accumulated deficit of $6,538,633 since inception and its operations continue to be funded primarily from sales of its stock and issuance of convertible debentures. These factors raise substantial doubt about the Companys ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Companys ability to obtain the necessary financing from sales of its stock financings. The consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Management plans to raise financing through the issuance of convertible notes. No assurance can be given that any such additional financing will be available, or that it can be obtained on terms acceptable to the Company and its stockholders. |
2. SUMMARY OF SIGNIFICANT ACCOU
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Basis of Presentation These consolidated financial statements include the accounts of Friendable, Inc., from the date of acquisition, and its wholly owned subsidiary, iHookup-DE from inception. These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. The Companys fiscal year end is December 31. Interim financial statements The unaudited interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim consolidated financial information and with the instructions for Securities and Exchange Commission (SEC) Form 10-Q and they do not include all of the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements. Therefore, these consolidated financial statements should be read in conjunction with the Companys audited annual consolidated financial statements and notes thereto for the year ended December 31, 2014, included in the Companys Annual Report on Form 10-K filed on April 16, 2015, with the SEC. In the opinion of management, all adjustments (consisting of normal and recurring accruals) considered necessary for fair presentation of the Companys financial position, results of operations and cash flows have been included. Operating results for the nine months ended September 30, 2015, are not necessarily indicative of the results that may be expected for future quarters or the year ending December 31, 2015. On April 29, 2014, the Company completed a common stock and preferred stock reverse stock split at a ratio of 20 to 1. Furthermore, on March 19, 2015, the Company completed a common stock and preferred stock reverse stock split at a ratio of 100 to 1. The reverse stock splits have been retroactively applied to all common stock, preferred stock, weighted average common stock, and loss per common stock disclosures. Use of Estimates The preparation of these consolidated financial statements in accordance with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to useful life and recoverability of intangible assets, valuation of convertible debenture conversion options, deferred income tax asset valuations, financial instrument valuations, share-based payments, other equity-based payments, and loss contingencies. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Companys estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. Revenue Recognition Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable. Revenue generally is recognized net of allowances for returns and any taxes collected from customers and subsequently remitted to governmental authorities. The Company derives revenues from the sale of application software, unlimited messaging subscriptions for periods varying from one to twelve months, and arrangements for virtual gifts and access to special features referred to as coin packs. Revenue from the sale of application software is recognized upon download. Revenue from messaging subscriptions is recognized as revenue ratably over the subscription period beginning on the date the service is made available to customers. Revenue from coin packs is recognized on a consumption basis commensurate with the customer utilization of such resources. Advertising Costs The Companys policy regarding advertising is to expense advertising when incurred. During the nine months ended September 30, 2015, the Company incurred $187,833 (2014: 486,310) in advertising costs. Cash and Cash Equivalents The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. Intangible Assets Acquired indefinite-lived intangible assets are capitalized and subject to impairment testing. Acquired finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets. The estimated remaining useful lives for intangible assets range from less than one year to five years. The Company evaluates the recoverability of finite-lived intangible assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If such review indicates that the carrying amount of intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value. The Company has not recorded any significant impairment charge during the periods presented. In addition to the recoverability assessment, the Company routinely reviews the remaining estimated useful lives of finite-lived intangible assets. If the Company reduces the estimated useful life assumption for any asset, the remaining unamortized balance would be amortized or depreciated over the revised estimated useful life. Impairment of Long-Lived Assets The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell. Stock-based Compensation The Company records stock-based compensation in accordance with ASC 718, Compensation Stock Based Compensation and ASC 505, Equity Based Payments to Non-Employees, which requires the measurement and recognition of compensation expense based on estimated fair values for all share-based awards made to employees and directors, including stock options. ASC 718 requires companies to estimate the fair value of share-based awards on the date of grant using an option-pricing model. The Company uses the Black-Scholes option pricing model as its method in determining fair value. This model is affected by the Companys stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to the Companys expected stock price volatility over the terms of the awards, and actual and projected employee stock option exercise behaviors. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the consolidated statement of comprehensive loss over the requisite service period. Allowance for Doubtful Accounts The Company receives revenues from sales of its software application. The Company monitors its outstanding receivables for timely payments and potential collection issues. During the nine months ended September 30, 2015, the Company did not have any allowance for doubtful accounts. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Financial Instruments Financial assets and financial liabilities are recognized in the consolidated balance sheet when the Company has become party to the contractual provisions of the instruments. The Companys financial instruments consist of accounts receivable, accounts payable, promissory notes, and convertible debentures. The fair values of these financial instruments approximate their carrying value, due to their short term nature, and current market rates for similar financial instruments. Fair value of a financial instrument is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Companys financial instruments recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Basic and Diluted Loss Per Share The Company computes net loss per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the consolidated statement of comprehensive loss. Basic EPS is computed by dividing net income (loss) available to common stockholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As of September 30, 2015, there were approximately 4,520,258,987 potentially dilutive shares outstanding. Income Taxes The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. Recent Accounting Pronouncements In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40). Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern (ASU 2014-15). ASU 2014-15 is intended to define managements responsibility to evaluate whether there is substantial doubt about an organizations ability to continue as a going concern and to provide related footnote disclosure. This ASU provides guidance to an organizations management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations today in the financial statement footnotes. The amendments are effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The Company is evaluating the impact the revised guidance will have on its consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09). ASU 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition and some cost guidance included in ASC Subtopic 605-35, Revenue Recognition -Construction-Type and Production-Type Contracts. 2014-09 requires the disclosure of sufficient information to enable users of the financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. The Company will also be required to disclose information regarding significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. Early adoption is not allowed. ASU 2014-09 provides two methods of retrospective application. The first method would require the Company to apply ASU 2014-09 to each prior reporting period presented. The second method would require the Company to retrospectively apply with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application. The Company is currently evaluating the impact that the adoption of ASU 2014-09 may have on its consolidated financial statements. |
3. MINERAL PROPERTIES
3. MINERAL PROPERTIES | 9 Months Ended |
Sep. 30, 2015 | |
Extractive Industries [Abstract] | |
MINERAL PROPERTIES | Wyoming Iron Complex Properties The Company was formerly involved in mineral exploration activities for (i) the property located at Southwest Quarter of Section 22, Township 19 North, Range 71 West, 6th Principal Meridian, Albany County, Wyoming ( Leased Real Property Unpatented Mining Claims, Wyoming Iron Complex |
4. INTANGIBLE ASSETS
4. INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2015 | |
Intangible Assets | |
Intangible Assets | On June 24, 2015, the Company completed the acquisition of the Friendable Properties which includes domain names, logos, icons, and registered trademarks for cash consideration of $35,000. |
5. COMMON AND PREFERRED STOCK
5. COMMON AND PREFERRED STOCK | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
COMMON AND PREFERRED STOCK | Issued during 2015: On March 19, 2015, the Company completed a common stock and preferred stock reverse stock split at a ratio of 100 to 1. The reverse stock splits have been retroactively applied to all common stock, preferred stock, weighted average common stock, and loss per common stock disclosures. During the nine months ended September 30, 2015, the Company issued 121,671,990 shares of common stock to various convertible note holders for full and partial conversion of the notes (Note 12). During the nine months ended September 30, 2015, the Company issued 1,150,000 shares of common stock to a consultant in exchange for investor relations and advertising services. During the nine months ended September 30, 2015, the Company issued 9,341,596 shares of common stock to various Series A preferred stockholders on conversion of 520 preferred shares. Preferred Stock: The Series A Preferred Stock is convertible into nine (9) times the number of common stock outstanding until the closing of a Qualified Financing (i.e. the sale and issuance of the Companys equity securities that results in gross proceeds in excess of $2,500,000). The number of shares of common stock issued on conversion of preferred stock is based on the ratio of the number of shares of preferred stock converted to the total number of shares of preferred stock outstanding at the date of conversion multiplied by nine (9) times the number of common stock outstanding at the date of conversion. |
6. SHARE PURCHASE WARRANTS
6. SHARE PURCHASE WARRANTS | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
SHARE PURCHASE WARRANTS | Number of Warrants Weighted Average Exercise Price $ Balance, December 31, 2014 334 2,000 Warrants expired (334 ) (2,000) Warrants issued 119,471,154 0.015 Balance, September 30, 2015 119,471,154 0.015 |
7. PROMISSORY NOTE
7. PROMISSORY NOTE | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
PROMISSORY NOTE | As of June 25, 2014, the Company entered into a Letter Agreement (the Letter Agreement) with Beaufort Capital Partners LLC to loan (the Loan) up to $400,000 to the Company upon the Companys written request. From June 25, 2014 to October 1, 2014 (the Term), the Loan may be made in monthly installments of One Hundred Thousand Dollars ($100,000) each and must be made within three (3) days of the receipt of the written request from the Company and evidenced by a Secured Promissory Note (the Note). Each Note shall be secured by a pledge of shares of common stock of the Company provided by Copper Creek Holdings, LLC (Copper Creek), pledged under the terms and conditions of a Stock Pledge Agreement (the Pledge). During the year ended December 31, 2014 and pursuant to the Letter Agreement, the Company delivered written requests for installments in the aggregate of $250,000 and executed three Notes totaling $250,000. The Notes bear 1% interest per month, compounded monthly, and mature in six (6) months (Maturity Date). In the event that payment is not received within ten (10) days of the Maturity Date, then the Company shall be charged a late fee in an amount equal to 5% of the amount of such overdue payment, payable within five (5) days of the Maturity Date. During the nine months ended September 30, 2015, the Company extinguished these notes in their entirety by issuing replacement convertible notes (Note 12). The Company also recorded interest expense of $6,074 and a gain on debt extinguishment of $5,096 on these notes. |
8. STOCK-BASED COMPENSATION
8. STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | On November 22, 2011, the Board of Directors of Titan Iron Ore Corp. (see Note 1) approved a stock option plan ( 2011 Stock Option Plan The aggregate number of options authorized by the plan shall not exceed 4,974 shares of common stock of the Company. The following table summarizes the options outstanding and exercisable under the 2011 Stock Option Plan as of September 30, 2015: Option Price Expiry Date Per Share($) Number December 21, 2021 1,680 1,725 June 21, 2022 400 500 June 25, 2023 134 850 $ 1,044 3,075 The Board of Directors and the stockholders holding a majority of the voting power approved a 2014 Equity Incentive Plan (the 2014 Plan There are 120,679 shares of common stock reserved for issuance under the 2014 Plan. The Board shall have the power and authority to make grants of stock options to employees, directors, consultants and independent contractors who serve the Company and its affiliates. Any stock options granted under the 2014 Plan shall have an exercise price equal to or greater than the fair market value of the Companys shares of common stock. Unless otherwise determined by the Board of Directors, stock options shall vest over a four-year period with 25% being vested after the end of one (1) year of service and the remainder vesting equally over a 36-month period. The Board may award options that may vest based upon the achievement of certain performance milestones. As of September 30, 2015, no options have been awarded under the 2014 Plan. The following table summarizes the Companys stock options outstanding and exercisable: Number of Options Weighted Average Exercise Price Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value $ $ Outstanding, December 31, 2013 - - - - Exercisable, December 31, 2013 - - - - Stock options of the Company outstanding and exercisable at the Merger 3,075 1,044 7.57 Outstanding and exercisable, December 31, 2014 3,075 1,044 7.57 - Outstanding and exercisable, September 30, 2015 3,075 1,044 7.32 - |
9. COMMITMENTS
9. COMMITMENTS | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS | The following table summarizes the Companys significant contractual obligations as of September 30, 2015: $ Convertible Notes (1) 2,201,370 Employment Agreements (2) 75,000 2,276,370 (1) Principal and interest due for various convertible notes agreements. (2) Employment agreements with related parties. |
10. RELATED PARTY TRANSACTIONS
10. RELATED PARTY TRANSACTIONS AND BALANCES | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS AND BALANCES | During the nine months ended September 30, 2015, the Company incurred $334,853 (2014: 318,656) in salaries to officers and directors with such costs being recorded as general and administrative expenses. During the nine months ended September 30, 2015, the Company incurred $352,811 (2014: $258,300) in app hosting, app development, office expenses, and rent to a company with two officers and directors in common with such costs being recorded as general and administrative and product development expenses. As of September 30, 2015, the Company had a stock subscription receivable totaling $4,500 (December 31, 2014: $4,500) from an officer and director and from a company with an officer and director in common. As of September 30, 2015, included in prepaid expenses is $1,868 (December 31, 2014: $2,938) advanced to the Chief Executive Officer of the Company. As of September 30, 2015, accounts payable include $99,462 (December 31, 2014: $42,352) payable to a company with two officers and directors in common, and $154,167 (December 31, 2014: $16,667) payable in salaries to directors and officers of the Company. The amounts are unsecured, non-interest bearing and are due on demand. The above transactions were recorded at their exchange amounts, being the amounts agreed by the related parties. |
11. FAIR VALUE MEASUREMENT
11. FAIR VALUE MEASUREMENT | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENT | ASC 820, Fair Value Measurements and Disclosures, require an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instruments categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value: Level 1 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Valuations are based on quoted prices that are readily and regularly available in an active market and do not entail a significant degree of judgment. Level 2 Level 2 applies to assets or liabilities for which there are other than Level 1 observable inputs such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 2 instruments require more management judgment and subjectivity as compared to Level 1 instruments. For instance: determining which instruments are most similar to the instrument being priced requires management to identify a sample of similar securities based on the coupon rates, maturity, issuer, credit rating and instrument type, and subjectively select an individual security or multiple securities that are deemed most similar to the security being priced; and determining whether a market is considered active requires management judgment. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The determination of fair value for Level 3 instruments requires the most management judgment and subjectivity. Pursuant to ASC 825, cash and cheques issued in excess of cash on hand is based on Level 1 inputs. The Company believes that the recorded values of accounts payable approximate their current fair values because of their nature or respective relatively short durations. The fair value of the Companys promissory notes and convertible debentures approximates their carrying values as the underlying imputed interest rates approximates the estimated current market rate for similar instruments. As of September 30, 2015, there were no assets or liabilities measured at fair value on a recurring basis presented on the Companys balance sheet, other than cash. |
12. CONVERTIBLE DEBENTURES
12. CONVERTIBLE DEBENTURES | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE DEBENTURES | Issuance Principal ($) Discount ($) Carrying Value ($) Interest Rate Maturity Date a ) 2-Apr-13 5,054 - 5,054 0 % 2-Jan-14 b ) 5-Aug-15 750,000 707,205 42,795 7 % 5-Feb-17 c ) 5-Aug-15 18,750 17,681 1,069 7 % 5-Feb-17 d ) 7-Oct-14 75,000 11,668 63,332 8 % 7-Oct-15 d ) 15-Jan-15 40,000 29,433 10,567 8 % 15-Jan-16 d ) 15-Feb-15 35,000 27,956 7,044 8 % 15-Feb-16 d ) 17-Feb-15 63,125 53,001 10,124 8 % 17-Feb-16 d ) 17-Feb-15 102,135 89,334 12,801 8 % 17-Feb-16 d ) 17-Feb-15 5,000 2,949 2,051 8 % 17-Feb-16 d ) 27-Feb-15 37,500 31,203 6,297 8 % 27-Feb-16 d ) 12-Mar-15 37,500 32,038 5,462 8 % 11-Mar-16 d ) 19-Mar-15 84,209 74,219 9,990 8 % 19-Mar-16 d ) 19-Mar-15 53,551 47,428 6,123 8 % 19-Mar-16 d ) 19-Mar-15 8,000 5,804 2,196 8 % 19-Mar-16 d ) 27-Mar-15 50,000 44,694 5,306 8 % 26-Mar-16 d ) 11-May-15 50,000 46,939 3,061 8 % 10-May-16 d ) 2-Jun-15 29,500 27,511 1,989 8 % 1-Jun-16 d ) 2-Jun-15 45,966 43,641 2,325 8 % 1-Jun-16 d ) 2-Jun-15 10,000 8,634 1,366 8 % 1-Jun-16 d ) 2-Jun-15 58,540 56,008 2,532 8 % 1-Jun-16 d ) 2-Jun-15 35,408 33,288 2,120 8 % 1-Jun-16 d ) 2-Jun-15 20,758 18,998 1,760 8 % 1-Jun-16 d ) 11-Jun-15 50,000 46,753 3,247 8 % 10-Jun-16 d ) 16-Jun-15 30,464 28,818 1,646 8 % 15-Jun-16 d ) 19-Jun-15 30,000 28,361 1,639 8 % 18-Jun-16 d ) 19-Jun-15 35,408 33,685 1,723 8 % 18-Jun-16 d ) 24-Jun-15 37,500 35,870 1,630 8 % 23-Jun-16 d ) 24-Jun-15 35,000 32,162 2,838 8 % 23-Jun-16 d ) 24-Jun-15 37,500 34,958 2,542 8 % 23-Jun-16 d ) 7-Jul-15 75,000 56,266 18,734 8 % 7-Oct-15 d ) 17-Jul-15 27,000 25,837 1,163 8 % 17-Jul-16 d ) 1-Aug-15 17,408 16,476 932 8 % 4-Aug-16 d ) 1-Aug-15 30,000 28,962 1,038 8 % 1-Aug-16 d ) 1-Aug-15 35,408 34,337 1,071 8 % 1-Aug-16 d ) 21-Sep-15 64,744 64,133 611 8 % 21-Sep-16 e ) 18-May-15 25,000 18,047 6,953 12 % 17-May-16 2,145,428 1,894,297 251,131 a) On April 2, 2013, the Company entered into a convertible bridge note with GCA Strategic Investment Fund Limited (GCA). On December 31, 2013, the Company entered in a letter agreement with GCA, in which the original maturity date of September 20, 2013 was extended to January 2, 2014. The unpaid principal portion and accrued interest on the convertible bridge note is convertible in whole or in part as follows: · Conversion price per share equal to the lower of : (i) 100% of the average price of the Companys common stock for the 5 trading days preceding the conversion date; (ii) 70% of the daily average price of the Companys common stock for the 10 trading days preceding the conversion date. The holders must not convert more than 33 1/3% of the initial principal sum into shares of the Companys common stock at a price below $0.08 per share during any calendar month. GCA does not have the right to convert the convertible bridge note, to the extent that GCA and its affiliates would beneficially own in excess of 9.99% of the Companys outstanding common stock. In the event the Company elects to prepay the convertible bridge note in full or in part, the Company is required to pay principal, interest and any other amounts owing multiplied by 130%. The convertible bridge note also contains a mandatory partial prepayment requirement should the Company obtain certain future net financings in excess of $300,000, and under other conditions. b-c) On August 5, 2015 the Company entered into a Securities Purchase Agreement (the SPA) with Alpha Capital Anstalt (Alpha Capital), to issue and sell up to, in principal amount, $1,500,000 of convertible notes, payable in two tranches (the Alpha Notes). The first tranche of $750,000 was funded on August 5, 2015 (Initial Closing Date) and the second tranche of $750,000 will be funded upon the Company reaching a trading value of at least $2,000,000 during each thirty (30) calendar day period commencing one (1) calendar day after the Initial Closing Date and ending on the one hundred and fiftieth (150th) day after the Initial Closing Date (Second Closing Date, and with the Initial Closing Date, each a Closing). Trading value means the number of shares traded on the Companys principal trading market during a specified period multiplied by the volume weighted average price (VWAP) for such trading period as determined by Bloomberg L.P. for the Companys principal trading market. Pursuant to the SPA, the Company also issued warrants to Alpha Capital to purchase up to a number of shares of the Companys common stock (Common Stock) equal to the purchase price of the Alpha Notes divided by the conversion price in effect as of the date of Closing (the Alpha Warrant). The conversion price as of the Initial Closing Date was $0.0078, and therefore warrants to purchase 96,153,846 shares of Common Stock were issued to Alpha Capital. The Alpha Warrants per share exercise price of $0.00936 is equivalent to 120% of the conversion price. For its services as a placement agent for this transaction and pursuant to the SPA, Palladium Capital Advisors, LLC (Palladium) received the following compensation: (i) 5% of the aggregate purchase price paid in each Closing, payable in cash by wire transfer at the time of such Closing, or $37,500 in cash as of the Initial Closing Date; (ii) 2.5% of the aggregate purchase price paid in each Closing, payable in the securities purchased in the Closing, which means as of the Initial Closing Date, by (1) a convertible note in the principal amount of $18,750 (Palladium Note), and (2) a warrant to purchase up to a number of shares of Common Stock equal to the purchase price of the Palladium Note divided by the conversion price in effect as of the date of the Closing, or warrants to purchase 2,403,846 shares of Common Stock (the Palladium Note Warrant); and (iii) warrants to purchase 6% of the number of shares of Common Stock issuable upon the assumed conversion of all the convertible notes sold at each Closing divided by the conversion price in effect on the date of such Closing, or warrants to purchase 5,913,462 shares of Common Stock as of the Initial Closing Date (the Palladium Warrant). The Palladium Note Warrant and Palladium Warrant will be identical to the Alpha Warrant in all other respects. d) As of October 7, 2014 and with a closing date of October 8, 2014, the Company entered into a Securities Purchase Agreement (the Coventry SPA) with Coventry Enterprises, LLC (Coventry), pursuant to which the Company issued two Convertible Notes (together, the Notes) in the amount of $75,000 each, at a rate of 8% per annum. Amounts funded are convertible into shares of the common stock of the Company, $0.0001 par value per share (the Common Stock), upon the terms and subject to the limitations and conditions set forth in such Notes. The first of the two Convertible Notes (the Coventry Note) was paid by the Buyer on October 8, 2014. The second Convertible Note (the Coventry Back-End Note) shall initially be paid for by an offsetting $75,000 promissory note issued to the Company by the Buyer (Buyer Note), provided that prior to the conversion of the Coventry Back-End Note, the Buyer must have paid off the Buyer Note in cash. Payment to the Company under the Buyer Note must be no later than October 7, 2015. The Buyer Note will be initially secured by the pledge of the Coventry Back-End Note. The term of the Coventry Note and the Coventry Back-End Note is one year, upon which the outstanding principal and interest is payable. The amount funded plus accrued interest under the Coventry Note and Coventry Back-End Note is convertible into Common Stock at any time after the requisite Rule 144 holding period (subject to the condition above for the Coventry Back-End Note), at a conversion price equal to 50% of the lowest closing bid price in the 15 trading days previous to the conversion. In the event the Company redeems the Coventry Note in full, the Company is required to pay off all principal, interest and any other amounts owing multiplied by 150% if prepaid prior to the 180th day after its issuance. There shall be no redemption after the 180th day. The Coventry Back-End Note may not be prepaid, except that if the Coventry Back-End Note is redeemed by the Company within six months of its issuance, all obligations of the Company and Coventry under the Coventry Back-End Note and the Buyer Note will be deemed satisfied and such notes shall automatically be deemed cancelled and of no further force or effect. In the event of default, the amount of principal and accrued interest will bear default interest at a rate of 16% per annum, or the highest rate of interest permitted by law, and the Notes shall become immediately due and payable. In connection with the Coventry Note, the Company paid $3,750 in legal fees and expenses. Upon the cash payment of the Buyer Note, the Company will pay an additional $3,750 in legal fees and expenses for the Coventry Back-End Note. The Coventry Back-End Note was funded on July 7, 2015. On January 15, 2015, the Company entered into a securities purchase agreement (the Coventry SPA) with Coventry Enterprises LLC., (Coventry), pursuant to which the Company sold to Coventry a $40,000 face value 8% Convertible Note (the Coventry Note) with a term of 12 months (the Coventry Maturity Date). Interest accrues daily on the outstanding principal amount of the Coventry Note at a rate per annual equal to 8% on the basis of a 365-day year. The principal amount and interest of the Coventry Note is payable on the Coventry Maturity Date. The Coventry Note is convertible into common stock beginning six months after the Issue Date, at the holders option, at a 50% discount to the lowest closing bid price of the common stock during the 20 trading day period prior to conversion. Coventry does not have the right to convert the Note, to the extent that Coventry and its affiliates would beneficially own in excess of 9.99% of the common stock of the Company. In the event the Company prepays the Coventry Note in full, the Company is required to pay off all principal, interest and any other amounts owing multiplied by 150%. In the event of default, the amount of principal and interest not paid when due bear default interest at the rate of 24% per annum and the Coventry Note becomes immediately due and payable. The Company paid Coventry $2,000 for its legal fees and expenses. On February 12, 2015, the Company entered into a Securities Purchase Agreement (the Coventry SPA) with Coventry Enterprises, LLC (Coventry), pursuant to which the Company issued two Convertible Notes (together, the Notes) in the amount of $35,000 each, at a rate of 8% per annum. Amounts funded are convertible into shares of the common stock of the Company, $0.0001 par value per share (the Common Stock), upon the terms and subject to the limitations and conditions set forth in such Notes. The first of the two Convertible Notes (the Coventry Note) was paid by the Buyer on February 15, 2015. The second Convertible Note (the Coventry Back-End Note) shall initially be paid for by an offsetting $35,000 promissory note issued to the Company by the Buyer (Buyer Note), provided that prior to the conversion of the Coventry Back-End Note, the Buyer must have paid off the Buyer Note in cash. Payment to the Company under the Buyer Note must be no later than October 12, 2015. The Buyer Note will be initially secured by the pledge of the Coventry Back-End Note. The Back-End Note was funded on June 24, 2015. The term of the Coventry Note and the Coventry Back-End Note is one year, upon which the outstanding principal and interest is payable. The amount funded plus accrued interest under the Coventry Note and Coventry Back-End Note is convertible into Common Stock at any time after the requisite Rule 144 holding period (subject to the condition above for the Coventry Back-End Note), at a conversion price equal to 50% of the lowest closing bid price in the 15 trading days previous to the conversion. In the event the Company redeems the Coventry Note in full, the Company is required to pay off all principal, interest and any other amounts owing multiplied by 150% if prepaid prior to the 180th day after its issuance. There shall be no redemption after the 180th day. The Coventry Back-End Note may not be prepaid, except that if the Coventry Back-End Note is redeemed by the Company within six months of its issuance, all obligations of the Company and Coventry under the Coventry Back-End Note and the Buyer Note will be deemed satisfied and such notes shall automatically be deemed cancelled and of no further force or effect. In the event of default, the amount of principal and accrued interest will bear default interest at a rate of 16% per annum, or the highest rate of interest permitted by law, and the Notes shall become immediately due and payable. In connection with the Coventry Note, the Company paid $1,750 in legal fees and expenses. Upon the cash payment of the Buyer Note, the Company paid an additional $1,750 in legal fees and expenses for the Coventry Back-End Note. On July 17, 2015 the parties entered into an amendment which established a ceiling price of $0.0005 on conversion of the note. On February 12, 2015, the Company entered into a Convertible Redeemable Note with Coventry whereby the Company issued a $63,125 face value 8% Convertible Note (the Coventry Note) with a term of 12 months (the Coventry Maturity Date) to replace a $58,675 debt to Bingham McCutchen LLP originally incurred on March 1, 2014. Interest accrues daily on the outstanding principal amount of the Coventry Note at a rate per annual equal to 8% on the basis of a 365-day year. The principal amount and interest of the Coventry Note is payable on the Coventry Maturity Date. The Coventry Note is convertible into common stock, at the holders option, at a 50% discount to the lowest closing bid price of the common stock during the 20- trading day period prior to conversion. Coventry does not have the right to convert the Note, to the extent that Coventry and its affiliates would beneficially own in excess of 9.99% of the common stock of the Company. In the event of default, the amount of principal and interest not paid when due bear default interest at the rate of 24% per annum and the Coventry Note becomes immediately due and payable. On July 17, 2015 the parties entered into an amendment which established a ceiling price of $0.0005 on conversion of the note. On February 17, 2015, the Company entered into a Convertible Redeemable Note with Coventry whereby the Company issued a $102,135 face value 8% Convertible Note (the Coventry Note) with a term of 12 months (the Coventry Maturity Date) to replace a $100,000 note to Beaufort Capital Partners LLP originally issued on January 29, 2015. Interest accrues daily on the outstanding principal amount of the Coventry Note at a rate per annual equal to 8% on the basis of a 365-day year. The principal amount and interest of the Coventry Note is payable on the Coventry Maturity Date. The Coventry Note is convertible into common stock, at the holders option, at a 50% discount to the lowest closing bid price of the common stock during the 20- trading day period prior to conversion. Coventry does not have the right to convert the Note, to the extent that Coventry and its affiliates would beneficially own in excess of 9.99% of the common stock of the Company. In the event of default, the amount of principal and interest not paid when due bear default interest at the rate of 24% per annum and the Coventry Note becomes immediately due and payable. In connection with the note, the Company issued a separate $5,000 8% convertible Rule 144 note to Coventry, with the same conversion terms, to pay for legal expenses. On June 23, 2015 the parties entered into an amendment which established a ceiling price of $0.0005 on conversion of the note. On February 27, 2015, the Company entered into a Securities Purchase Agreement (the Coventry SPA) with Coventry Enterprises, LLC (Coventry), pursuant to which the Company issued two Convertible Notes (together, the Notes) in the amount of $37,500 each, at a rate of 8% per annum. Amounts funded are convertible into shares of the common stock of the Company, $0.0001 par value per share (the Common Stock), upon the terms and subject to the limitations and conditions set forth in such Notes. The first of the two Convertible Notes (the Coventry Note) was paid by the Buyer on February 27, 2015. The second Convertible Note (the Coventry Back-End Note) shall initially be paid for by an offsetting $37,500 promissory note issued to the Company by the Buyer (Buyer Note), provided that prior to the conversion of the Coventry Back-End Note, the Buyer must have paid off the Buyer Note in cash. Payment to the Company under the Buyer Note must be no later than February 27, 2016. The Buyer Note will be initially secured by the pledge of the Coventry Back-End Note. The Back-End Note was funded on June 24, 2015. The term of the Coventry Note and the Coventry Back-End Note is one year, upon which the outstanding principal and interest is payable. The amount funded plus accrued interest under the Coventry Note and Coventry Back-End Note is convertible into Common Stock at any time after the requisite Rule 144 holding period (subject to the condition above for the Coventry Back-End Note), at a conversion price equal to 50% of the lowest closing bid price in the 20 trading days previous to the conversion. In no event shall Coventry be allowed to effect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by the Coventry and its affiliates would exceed 9.9% of the outstanding shares of the common stock of the Company. In the event the Company redeems the Coventry Note in full, the Company is required to pay off all principal, interest and any other amounts owing multiplied by 150%. The Coventry Back-End Note may not be prepaid, except that if the Coventry Back-End Note is redeemed by the Company within six months of its issuance, all obligations of the Company and Coventry under the Coventry Back-End Note and the Buyer Note will be deemed satisfied and such notes shall automatically be deemed cancelled and of no further force or effect. In the event of default, the amount of principal and accrued interest will bear default interest at a rate of 24% per annum, or the highest rate of interest permitted by law, and the Notes shall become immediately due and payable. In connection with the Coventry Note, the Company paid $2,500 in legal fees and expenses. Upon the cash payment of the Buyer Note, the Company paid an additional $2,500 in legal fees and expenses for the Coventry Back-End Note. On July 17, 2015 the parties entered into an amendment which established a ceiling price of $0.0005 on conversion of the note. In connection with the Notes, the Company entered into a Common Stock Purchase Warrant (the Warrant) which entitles Coventry to subscribe for and purchase from the Company, up to 7,000,000 shares of common stock of the Company at an exercise price of $0.05 for a period of five years. The exercise price is subject to adjustments as provided in the Warrant. Under certain circumstances, the Holder is also permitted a cashless exercise. On March 12, 2015, the Company entered into a Securities Purchase Agreement (the Coventry SPA) with Coventry Enterprises, LLC (Coventry), pursuant to which the Company issued two Convertible Notes (together, the Notes) in the amount of $37,500 each, at a rate of 8% per annum. Amounts funded are convertible into shares of the common stock of the Company, $0.0001 par value per share (the Common Stock), upon the terms and subject to the limitations and conditions set forth in such Notes. The first of the two Convertible Notes (the Coventry Note) was paid by the Buyer on March 13, 2015. The second Convertible Note (the Coventry Back-End Note) shall initially be paid for by an offsetting $37,500 promissory note issued to the Company by the Buyer (Buyer Note), provided that prior to the conversion of the Coventry Back-End Note, the Buyer must have paid off the Buyer Note in cash. Payment to the Company under the Buyer Note must be no later than November 12, 2015. The Buyer Note will be initially secured by the pledge of the Coventry Back-End Note. The Back-End Note was funded on June 24, 2015. The term of the Coventry Note and the Coventry Back-End Note is one year, upon which the outstanding principal and interest is payable. The amount funded plus accrued interest under the Coventry Note and Coventry Back-End Note is convertible into Common Stock at any time after the requisite Rule 144 holding period (subject to the condition above for the Coventry Back-End Note), at a conversion price equal to 50% of the lowest closing bid price in the 20 trading days previous to the conversion. In no event shall Coventry be allowed to effect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by the Coventry and its affiliates would exceed 9.9% of the outstanding shares of the common stock of the Company. In the event the Company redeems the Coventry Note in full, the Company is required to pay off all principal, interest and any other amounts owing multiplied by 150%. The Coventry Back-End Note may not be prepaid, except that if the Coventry Back-End Note is redeemed by the Company within six months of its issuance, all obligations of the Company and Coventry under the Coventry Back-End Note and the Buyer Note will be deemed satisfied and such notes shall automatically be deemed cancelled and of no further force or effect. In the event of default, the amount of principal and accrued interest will bear default interest at a rate of 24% per annum, or the highest rate of interest permitted by law, and the Notes shall become immediately due and payable. In connection with the Coventry Note, the Company paid $2,500 in legal fees and expenses. Upon the cash payment of the Buyer Note, the Company paid an additional $2,500 in legal fees and expenses for the Coventry Back-End Note. On July 17, 2015 the parties entered in an amendment which established a ceiling price of $0.0005 on conversion of the note. In connection with the Notes, the Company entered into a Common Stock Purchase Warrant (the Warrant) which entitles Coventry to subscribe for and purchase from the Company, up to 7,000,000 shares of common stock of the Company at an exercise price of $0.05 for a period of five years. The exercise price is subject to adjustments as provided in the Warrant. Under certain circumstances, the Holder is also permitted a cashless exercise. On March 19, 2015, the Company entered into two Convertible Redeemable Notes with Coventry whereby the Company issued two 8% Convertible Notes (the Coventry Notes)with an aggregate value of $160,268 with a term of 12 months (the Coventry Maturity Date) to replace a $156,329 in debt to Bingham McCutchen LP originally incurred in fiscal year 2014. Interest accrues daily on the outstanding principal amount of the Coventry Note at a rate per annual equal to 8% on the basis of a 365-day year. The principal amount and interest of the Coventry Note is payable on the Coventry Maturity Date. The Coventry Note is convertible into common stock, at the holders option, at a 50% discount to the lowest closing bid price of the common stock during the 20-trading day period prior to conversion. Coventry does not have the right to convert the Note, to the extent that Coventry and its affiliates would beneficially own in excess of 9.99% of the common stock of the Company. In the event of default, the amount of principal and interest not paid when due bear default interest at the rate of 24% per annum and the Coventry Note becomes immediately due and payable. In connection with the note, the Company issued a separate $8,000 8% convertible Rule 144 note to Coventry, with the same conversion terms, to pay for legal expenses. On July 17, 2015 the parties entered into an amendment which established a ceiling price of $0.0005 on conversion of the notes. On March 27, 2015, the Company entered into a Securities Purchase Agreement (SPA) with Coventry Enterprises, LLC (Coventry), pursuant to which the Company issued two Convertible Notes (together, the Notes) in the amount of $50,000 each, at a rate of 8% per annum. Amounts funded are convertible into shares of the common stock of the Company, $0.0001 par value per share (the Common Stock), upon the terms and subject to the limitations and conditions set forth in such Notes. The first of the two Convertible Notes (the Coventry Note) was paid by the Buyer on March 27, 2015. The second Convertible Note (the Coventry Back-End Note) shall initially be paid for by an offsetting $50,000 promissory note issued to the Company by the Buyer (Buyer Note), provided that prior to the conversion of the Coventry Back-End Note, the Buyer must have paid off the Buyer Note in cash. Payment to the Company under the Buyer Note must be no later than November 27, 2015. The Buyer Note will be initially secured by the pledge of the Coventry Back-End Note. The Back-End Note was funded on June 11, 2015. The term of the Coventry Note and the Coventry Back-End Note is one year, upon which the outstanding principal and interest is payable. The amount funded plus accrued interest under the Coventry Note and Coventry Back-End Note is convertible into Common Stock at any time after the requisite Rule 144 holding period (subject to the condition above for the Coventry Back-End Note), at a conversion price equal to 50% of the lowest closing bid price in the 20 trading days previous to the conversion. In no event shall Coventry be allowed to effect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by the Coventry and its affiliates would exceed 9.9% of the outstanding shares of the common stock of the Company. In the event the Company redeems the Coventry Note in full, the Company is required to pay off all principal, interest and any other amounts owing multiplied by 150%. The Coventry Back-End Note may not be prepaid, except that if the Coventry Back-End Note is redeemed by the Company within six months of its issuance, all obligations of the Company and Coventry under the Coventry Back-End Note and the Buyer Note will be deemed satisfied and such notes shall automatically be deemed cancelled and of no further force or effect. In the event of default, the amount of principal and accrued interest will bear default interest at a rate of 24% per annum, or the highest rate of interest permitted by law, and the Notes shall become immediately due and payable. In connection with the Coventry Note, the Company paid $2,500 in legal fees and expenses. Upon the cash payment of the Buyer Note, the Company paid an additional $2,500 in legal fees and expenses for the Coventry Back-End Note. In connection with the Notes, the Company entered into a Common Stock Purchase Warrant (the Warrant) which entitles Coventry to subscribe for and purchase from the Company, up to 1,000,000 shares of common stock of the Company at an exercise price of $0.05 for a period of five years. The exercise price is subject to adjustments as provided in the Warrant. Under certain circumstances, the Holder is also permitted a cashless exercise. On May 11, 2015, the Company entered into a Securities Purchase Agreement (the Coventry SPA) with Coventry Enterprises, LLC (Coventry), pursuant to which the Company issued two Convertible Notes (together, the Notes) in the amount of $50,000 each, at a rate of 8% per annum. Amounts funded are convertible into shares of the common stock of the Company, $0.0001 par value per share (the Common Stock), upon the terms and subject to the limitations and conditions set forth in such Notes. The first of the two Convertible Notes (the Coventry Note) was paid by the Buyer on May11, 2015. The second Convertible Note (the Coventry Back-End Note) shall initially be paid for by an offsetting $50,000 promissory note issued to the Company by the Buyer (Buyer Note), provided that prior to the conversion of the Coventry Back-End Note, the Buyer must have paid off the Buyer Note in cash. Payment to the Company under the Buyer Note must be no later than January 11, 2016. The Buyer Note will be initially secured by the pledge of the Coventry Back-End Note. The term of the Coventry Note and the Coventry Back-End Note is one year, upon which the outstanding principal and interest is payable. The amount funded plus accrued interest under the Coventry Note and Coventry Back-End Note is convertible into Common Stock at any time after the requisite Rule 144 holding period (subject to the condition above for the Coventry Back-End Note), at a conversion price equal to 50% of the lowest closing bid price (with a ceiling price of $0.05) in the 20 trading days previous to the conversion. In no event shall Coventry be allowed to effect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by the Coventry and its affiliates would exceed 9.9% of the outstanding shares of the common stock of the Company. In the event the Company redeems the Coventry Note in full, the Company is required to pay off all principal, interest and any other amounts owing multiplied by 150%. The Coventry Back-End Note may not be prepaid, except that if the Coventry Back-End Note is redeemed by the Company within six months of its issuance, all obligations of the Company and Coventry under the Coventry Back-End Note and the Buyer Note will be deemed satisfied and such notes shall automatically be deemed cancelled and of no further force or effect. In the event of default, the amount of principal and accrued interest will bear default interest at a rate of 24% per annum, or the highest rate of interest permitted by law, and the Notes shall become immediately due and payable. In connection with the Coventry Note, the Company paid $2,500 in legal fees and expenses. Upon the cash payment of the Buyer Note, the Company will pay an additional $2,500 in legal fees and expenses for the Coventry Back-End Note. As of June 2, 2015 and with a closing date of June 5, 2015, Friendable, Inc. (the Company) entered into a Securities Purchase Agreement (the Coventry SPA) with Coventry Enterprises, LLC (Coventry), pursuant to which the Company issued two Convertible Notes (together, the Notes) in the amount of $45,966 each, at a rate of 8% per annum. Amounts funded are convertible into shares of the common stock of the Company, $0.0001 par value per share (the Common Stock), upon the terms and subject to the limitations and conditions set forth in such Notes. The first of the two Convertible Notes (the Coventry Note) was paid by the Buyer on June 5, 2015. The second Convertible Note (the Coventry Back-End Note) shall initially be paid for by an offsetting $45,966 promissory note issued to the Company by the Buyer (Buyer Note), provided that prior to the conversion of the Coventry Back-End Note, the Buyer must have paid off the Buyer Note in cash. Payment to the Company under the Buyer Note must be no later than February 2, 2016. The Buyer Note will be initially secured by the pledge of the Coventry Back-End Note. The term of the Coventry Note and the Coventry Back-End Note is one year, upon which the outstanding principal and interest is payable. The amount funded plus accrued interest under the Coventry Note and Coventry Back-End Note is convertible into Common Stock at any time after the requisite Rule 144 holding period (subject to the condition above for the Coventry Back-End Note), at a conversion price equal to 50% of the lowest closing bid price (with a ceiling price of $0.05) in the 20 trading days previous to the conversion. In no event shall the Coventry be allowed to effect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by the Coventry and its affiliates would exceed 9.9% of the outstanding shares of the common stock of the Company. In the event the Company redeems the Coventry Note in full, the Company is required to pay off all principal, interest and any other amounts owing multiplied by 150%. The Coventry Back-End Note may not be prepaid, except that if the Coventry Back-End Note is redeemed by the Company within six months of its issuance, all obligations of the Company and Coventry under the Coventry Back-End Note and the Buyer Note will be deemed satisfied and such notes shall auto |
2. SUMMARY OF SIGNIFICANT ACC19
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | These consolidated financial statements include the accounts of Friendable, Inc., from the date of acquisition, and its wholly owned subsidiary, iHookup-DE from inception. These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. The Companys fiscal year end is December 31. |
Interim financial statements | The unaudited interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim consolidated financial information and with the instructions for Securities and Exchange Commission (SEC) Form 10-Q and they do not include all of the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements. Therefore, these consolidated financial statements should be read in conjunction with the Companys audited annual consolidated financial statements and notes thereto for the year ended December 31, 2014, included in the Companys Annual Report on Form 10-K filed on April 16, 2015, with the SEC. In the opinion of management, all adjustments (consisting of normal and recurring accruals) considered necessary for fair presentation of the Companys financial position, results of operations and cash flows have been included. Operating results for the nine months ended September 30, 2015, are not necessarily indicative of the results that may be expected for future quarters or the year ending December 31, 2015. On April 29, 2014, the Company completed a common stock and preferred stock reverse stock split at a ratio of 20 to 1. Furthermore, on March 19, 2015, the Company completed a common stock and preferred stock reverse stock split at a ratio of 100 to 1. The reverse stock splits have been retroactively applied to all common stock, preferred stock, weighted average common stock, and loss per common stock disclosures. |
Use of Estimates | The preparation of these consolidated financial statements in accordance with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to useful life and recoverability of intangible assets, valuation of convertible debenture conversion options, deferred income tax asset valuations, financial instrument valuations, share-based payments, other equity-based payments, and loss contingencies. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Companys estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. |
Revenue Recognition | Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable. Revenue generally is recognized net of allowances for returns and any taxes collected from customers and subsequently remitted to governmental authorities. The Company derives revenues from the sale of application software, unlimited messaging subscriptions for periods varying from one to twelve months, and arrangements for virtual gifts and access to special features referred to as coin packs. Revenue from the sale of application software is recognized upon download. Revenue from messaging subscriptions is recognized as revenue ratably over the subscription period beginning on the date the service is made available to customers. Revenue from coin packs is recognized on a consumption basis commensurate with the customer utilization of such resources. |
Advertising Costs | The Companys policy regarding advertising is to expense advertising when incurred. During the nine months ended September 30, 2015, the Company incurred $187,833 (2014: 486,310) in advertising costs. |
Cash and Cash Equivalents | The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. |
Intangible Assets | Acquired indefinite-lived intangible assets are capitalized and subject to impairment testing. Acquired finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets. The estimated remaining useful lives for intangible assets range from less than one year to five years. The Company evaluates the recoverability of finite-lived intangible assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If such review indicates that the carrying amount of intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value. The Company has not recorded any significant impairment charge during the periods presented. In addition to the recoverability assessment, the Company routinely reviews the remaining estimated useful lives of finite-lived intangible assets. If the Company reduces the estimated useful life assumption for any asset, the remaining unamortized balance would be amortized or depreciated over the revised estimated useful life. |
Impairment of Long-Lived Assets | The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell. |
Stock-based Compensation | The Company records stock-based compensation in accordance with ASC 718, Compensation Stock Based Compensation and ASC 505, Equity Based Payments to Non-Employees, which requires the measurement and recognition of compensation expense based on estimated fair values for all share-based awards made to employees and directors, including stock options. ASC 718 requires companies to estimate the fair value of share-based awards on the date of grant using an option-pricing model. The Company uses the Black-Scholes option pricing model as its method in determining fair value. This model is affected by the Companys stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to the Companys expected stock price volatility over the terms of the awards, and actual and projected employee stock option exercise behaviors. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the consolidated statement of comprehensive loss over the requisite service period. |
Allowance for Doubtful Accounts | The Company receives revenues from sales of its software application. The Company monitors its outstanding receivables for timely payments and potential collection issues. During the nine months ended September 30, 2015, the Company did not have any allowance for doubtful accounts. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. |
Financial Instruments | Financial assets and financial liabilities are recognized in the consolidated balance sheet when the Company has become party to the contractual provisions of the instruments. The Companys financial instruments consist of accounts receivable, accounts payable, promissory notes, and convertible debentures. The fair values of these financial instruments approximate their carrying value, due to their short term nature, and current market rates for similar financial instruments. Fair value of a financial instrument is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Companys financial instruments recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. |
Basic and Diluted Loss Per Share | The Company computes net loss per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the consolidated statement of comprehensive loss. Basic EPS is computed by dividing net income (loss) available to common stockholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As of September 30, 2015, there were approximately 4,520,258,987 potentially dilutive shares outstanding. |
Income Taxes | The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. |
Recent Accounting Pronouncements | In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40). Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern (ASU 2014-15). ASU 2014-15 is intended to define managements responsibility to evaluate whether there is substantial doubt about an organizations ability to continue as a going concern and to provide related footnote disclosure. This ASU provides guidance to an organizations management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations today in the financial statement footnotes. The amendments are effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The Company is evaluating the impact the revised guidance will have on its consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09). ASU 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition and some cost guidance included in ASC Subtopic 605-35, Revenue Recognition -Construction-Type and Production-Type Contracts. 2014-09 requires the disclosure of sufficient information to enable users of the financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. The Company will also be required to disclose information regarding significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. Early adoption is not allowed. ASU 2014-09 provides two methods of retrospective application. The first method would require the Company to apply ASU 2014-09 to each prior reporting period presented. The second method would require the Company to retrospectively apply with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application. The Company is currently evaluating the impact that the adoption of ASU 2014-09 may have on its consolidated financial statements. |
6. SHARE PURCHASE WARRANTS (Tab
6. SHARE PURCHASE WARRANTS (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Share Purchase Warrants | Number of Warrants Weighted Average Exercise Price $ Balance, December 31, 2014 334 2,000 Warrants expired (334 ) (2,000) Warrants issued 119,471,154 0.015 Balance, September 30, 2015 119,471,154 0.015 |
8. STOCK-BASED COMPENSATION (Ta
8. STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Options outstanding | Option Price Expiry Date Per Share($) Number December 21, 2021 1,680 1,725 June 21, 2022 400 500 June 25, 2023 134 850 $ 1,044 3,075 |
Stock option activity | Number of Options Weighted Average Exercise Price Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value $ $ Outstanding, December 31, 2013 - - - - Exercisable, December 31, 2013 - - - - Stock options of the Company outstanding and exercisable at the Merger 3,075 1,044 7.57 Outstanding and exercisable, December 31, 2014 3,075 1,044 7.57 - Outstanding and exercisable, September 30, 2015 3,075 1,044 7.32 - |
9. COMMITMENTS (Tables)
9. COMMITMENTS (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Commitments Tables | |
Commitments | $ Convertible Notes (1) 2,201,370 Employment Agreements (2) 75,000 2,276,370 |
12. CONVERTIBLE DEBENTURES (Tab
12. CONVERTIBLE DEBENTURES (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Convertible Debt | Issuance Principal ($) Discount ($) Carrying Value ($) Interest Rate Maturity Date a ) 2-Apr-13 5,054 - 5,054 0 % 2-Jan-14 b ) 5-Aug-15 750,000 707,205 42,795 7 % 5-Feb-17 c ) 5-Aug-15 18,750 17,681 1,069 7 % 5-Feb-17 d ) 7-Oct-14 75,000 11,668 63,332 8 % 7-Oct-15 d ) 15-Jan-15 40,000 29,433 10,567 8 % 15-Jan-16 d ) 15-Feb-15 35,000 27,956 7,044 8 % 15-Feb-16 d ) 17-Feb-15 63,125 53,001 10,124 8 % 17-Feb-16 d ) 17-Feb-15 102,135 89,334 12,801 8 % 17-Feb-16 d ) 17-Feb-15 5,000 2,949 2,051 8 % 17-Feb-16 d ) 27-Feb-15 37,500 31,203 6,297 8 % 27-Feb-16 d ) 12-Mar-15 37,500 32,038 5,462 8 % 11-Mar-16 d ) 19-Mar-15 84,209 74,219 9,990 8 % 19-Mar-16 d ) 19-Mar-15 53,551 47,428 6,123 8 % 19-Mar-16 d ) 19-Mar-15 8,000 5,804 2,196 8 % 19-Mar-16 d ) 27-Mar-15 50,000 44,694 5,306 8 % 26-Mar-16 d ) 11-May-15 50,000 46,939 3,061 8 % 10-May-16 d ) 2-Jun-15 29,500 27,511 1,989 8 % 1-Jun-16 d ) 2-Jun-15 45,966 43,641 2,325 8 % 1-Jun-16 d ) 2-Jun-15 10,000 8,634 1,366 8 % 1-Jun-16 d ) 2-Jun-15 58,540 56,008 2,532 8 % 1-Jun-16 d ) 2-Jun-15 35,408 33,288 2,120 8 % 1-Jun-16 d ) 2-Jun-15 20,758 18,998 1,760 8 % 1-Jun-16 d ) 11-Jun-15 50,000 46,753 3,247 8 % 10-Jun-16 d ) 16-Jun-15 30,464 28,818 1,646 8 % 15-Jun-16 d ) 19-Jun-15 30,000 28,361 1,639 8 % 18-Jun-16 d ) 19-Jun-15 35,408 33,685 1,723 8 % 18-Jun-16 d ) 24-Jun-15 37,500 35,870 1,630 8 % 23-Jun-16 d ) 24-Jun-15 35,000 32,162 2,838 8 % 23-Jun-16 d ) 24-Jun-15 37,500 34,958 2,542 8 % 23-Jun-16 d ) 7-Jul-15 75,000 56,266 18,734 8 % 7-Oct-15 d ) 17-Jul-15 27,000 25,837 1,163 8 % 17-Jul-16 d ) 1-Aug-15 17,408 16,476 932 8 % 4-Aug-16 d ) 1-Aug-15 30,000 28,962 1,038 8 % 1-Aug-16 d ) 1-Aug-15 35,408 34,337 1,071 8 % 1-Aug-16 d ) 21-Sep-15 64,744 64,133 611 8 % 21-Sep-16 e ) 18-May-15 25,000 18,047 6,953 12 % 17-May-16 2,145,428 1,894,297 251,131 |
1. NATURE OF BUSINESS AND GOI24
1. NATURE OF BUSINESS AND GOING CONCERN (Details Narrative) | Sep. 30, 2015USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Working Capital Deficiency | $ 657,285 |
6. SHARE PURCHASE WARRANTS - Sh
6. SHARE PURCHASE WARRANTS - Share Purchase Warrants (Details) - $ / shares | 9 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Beginning Balance | 3,075 | 0 | |
Warrants | |||
Beginning Balance | 119,471,154 | 334 | |
Warrants expired during the period | (334) | ||
Warrants issued during the period | 119,471,154 | ||
Number of Warrants Outstanding | 119,471,154 | ||
Weighted Average beginning balance | $ 2,000 | ||
Weighted Average Warrants expired during the period | $ (2,000) | ||
Weighted Average Warrants issued during the period | .015 | ||
Weighted Average Exercise Price Outstanding, Ending | $ .015 |
8. STOCK-BASED COMPENSATION (De
8. STOCK-BASED COMPENSATION (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Stock-based Compensation Details | |||
Shares outstanding | 3,075 | 0 | |
Shares exercisable | 3,075 | 3,075 | 0 |
Stock options of the Company outstanding and exercisable at the Merger | 3,075 | ||
Weighted average exercise price of share outstanding | $ 1,044 | $ 0 | |
Weighted average exercise price of share exercisable | 1,044 | $ 0 | |
Weighted average exercise price stock options of the Company outstanding and exercisable at the Merger | $ 1,044 | ||
Weighted-average remaining contractual term (years) | 7 years 3 months 25 days | 7 years 6 months 25 days | |
Aggregate intrinsic value of share outstanding | $ 0 | ||
Aggregate intrinsic value of share exercisable | $ 0 |
8. STOCK-BASED COMPENSATION - S
8. STOCK-BASED COMPENSATION - Stock option activity (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Number | 3,075 | 3,075 | 0 |
Option price per share | $ 1,044 | ||
Stock Option 1 | |||
Number | 1,725 | ||
Option price per share | $ 1,680 | ||
Expiration date | Dec. 21, 2021 | ||
Stock Option 2 | |||
Number | 500 | ||
Option price per share | $ 400 | ||
Expiration date | Jun. 21, 2022 | ||
Stock Option 3 | |||
Number | 850 | ||
Option price per share | $ 134 | ||
Expiration date | Jun. 25, 2023 |
9. COMMITMENTS (Details)
9. COMMITMENTS (Details) | Sep. 30, 2015USD ($) |
Contractual obligations | $ 2,276,370 |
Convertible Notes | |
Contractual obligations | 2,201,370 |
Employment Agreements | |
Contractual obligations | $ 75,000 |
10. RELATED PARTY TRANSACTION29
10. RELATED PARTY TRANSACTIONS AND BALANCES (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Stock subscription receivable from officer and director | $ 4,500 | $ 4,500 | |
Salaries Officers and Directors | |||
Related party transactions | 334,853 | $ 318,656 | |
Accounts payable to related party | 154,167 | 16,667 | |
Company with common directors and officers | |||
Related party transactions | 352,811 | $ 258,300 | |
Accounts payable to related party | 99,462 | 42,352 | |
Chief Executive Officer [Member] | |||
Prepaid expenses to related party | $ 1,868 | $ 2,938 |
12. CONVERTIBLE DEBENTURES (Det
12. CONVERTIBLE DEBENTURES (Details) | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Principal | $ 2,145,428 |
Discount | 1,894,297 |
Carrying Value | 251,131 |
August 1, 2015 | |
Principal | 17,408 |
Discount | 16,476 |
Carrying Value | $ 932 |
Interest Rate | 800.00% |
August 1, 2015 | |
Principal | $ 30,000 |
Discount | 28,962 |
Carrying Value | $ 1,038 |
Interest Rate | 800.00% |
August 1, 2015 | |
Principal | $ 35,408 |
Discount | 34,337 |
Carrying Value | $ 1,071 |
Interest Rate | 800.00% |
September 21, 2015 | |
Principal | $ 64,744 |
Discount | 64,133 |
Carrying Value | $ 611 |
Interest Rate | 800.00% |
August 1, 2015 | |
Maturity Date | Aug. 4, 2016 |
August 1, 2015 | |
Maturity Date | Aug. 1, 2016 |
August 1, 2015 | |
Maturity Date | Aug. 1, 2016 |
September 21, 2015 | |
Maturity Date | Sep. 21, 2016 |
April 2, 2013 | |
Principal | $ 5,054 |
Discount | |
Carrying Value | $ 5,054 |
Interest Rate | 0.00% |
Maturity Date | Jan. 2, 2014 |
August 5, 2015 | |
Principal | $ 750,000 |
Discount | 707,205 |
Carrying Value | $ 42,795 |
Interest Rate | 700.00% |
Maturity Date | Feb. 5, 2017 |
August 5, 2015 | |
Principal | $ 18,750 |
Discount | 17,681 |
Carrying Value | $ 1,069 |
Interest Rate | 700.00% |
Maturity Date | Feb. 5, 2017 |
October 7, 2014 | |
Principal | $ 75,000 |
Discount | 11,668 |
Carrying Value | $ 63,332 |
Interest Rate | 800.00% |
Maturity Date | Oct. 7, 2015 |
January 15, 2015 | |
Principal | $ 40,000 |
Discount | 29,433 |
Carrying Value | $ 10,567 |
Interest Rate | 800.00% |
Maturity Date | Jan. 15, 2016 |
February 15, 2015 | |
Principal | $ 35,000 |
Discount | 27,956 |
Carrying Value | $ 7,044 |
Interest Rate | 800.00% |
Maturity Date | Feb. 15, 2016 |
February 17, 2015 | |
Principal | $ 63,125 |
Discount | 53,001 |
Carrying Value | $ 10,124 |
Interest Rate | 800.00% |
Maturity Date | Feb. 17, 2016 |
February 17, 2015 | |
Principal | $ 102,135 |
Discount | 89,334 |
Carrying Value | $ 12,801 |
Interest Rate | 800.00% |
Maturity Date | Feb. 17, 2016 |
February 17, 2015 | |
Principal | $ 5,000 |
Discount | 2,949 |
Carrying Value | $ 2,051 |
Interest Rate | 800.00% |
Maturity Date | Feb. 17, 2016 |
February 27, 2015 | |
Principal | $ 37,500 |
Discount | 31,203 |
Carrying Value | $ 6,297 |
Interest Rate | 800.00% |
Maturity Date | Feb. 27, 2016 |
March 12, 2015 | |
Principal | $ 37,500 |
Discount | 32,038 |
Carrying Value | $ 5,462 |
Interest Rate | 800.00% |
Maturity Date | Mar. 11, 2016 |
March 19, 2015 | |
Principal | $ 84,209 |
Discount | 74,219 |
Carrying Value | $ 9,990 |
Interest Rate | 800.00% |
Maturity Date | Mar. 19, 2016 |
March 19, 2015 | |
Principal | $ 53,551 |
Discount | 47,428 |
Carrying Value | $ 6,123 |
Interest Rate | 800.00% |
Maturity Date | Mar. 19, 2016 |
March 19, 2015 | |
Principal | $ 8,000 |
Discount | 5,804 |
Carrying Value | $ 2,196 |
Interest Rate | 800.00% |
Maturity Date | Mar. 19, 2016 |
March 27, 2015 | |
Principal | $ 50,000 |
Discount | 44,694 |
Carrying Value | $ 5,306 |
Interest Rate | 800.00% |
Maturity Date | Mar. 26, 2016 |
May 11, 2015 | |
Principal | $ 50,000 |
Discount | 46,939 |
Carrying Value | $ 3,061 |
Interest Rate | 800.00% |
Maturity Date | May 10, 2016 |
June 2, 2015 | |
Principal | $ 29,500 |
Discount | 27,511 |
Carrying Value | $ 1,989 |
Interest Rate | 800.00% |
Maturity Date | Jun. 1, 2016 |
June 2, 2015 | |
Principal | $ 45,966 |
Discount | 43,641 |
Carrying Value | $ 2,325 |
Interest Rate | 800.00% |
Maturity Date | Jun. 1, 2016 |
June 2, 2015 | |
Principal | $ 10,000 |
Discount | 8,634 |
Carrying Value | $ 1,366 |
Interest Rate | 800.00% |
Maturity Date | Jun. 1, 2016 |
June 2, 2015 | |
Principal | $ 58,540 |
Discount | 56,008 |
Carrying Value | $ 2,532 |
Interest Rate | 800.00% |
Maturity Date | Jun. 1, 2016 |
June 2, 2015 | |
Principal | $ 35,408 |
Discount | 33,288 |
Carrying Value | $ 2,120 |
Interest Rate | 800.00% |
Maturity Date | Jun. 1, 2016 |
June 2, 2015 | |
Principal | $ 20,758 |
Discount | 18,998 |
Carrying Value | $ 1,760 |
Interest Rate | 800.00% |
Maturity Date | Jun. 1, 2016 |
June 11, 2015 | |
Principal | $ 50,000 |
Discount | 46,753 |
Carrying Value | $ 3,247 |
Interest Rate | 800.00% |
Maturity Date | Jun. 10, 2016 |
June 16, 2015 | |
Principal | $ 30,464 |
Discount | 28,818 |
Carrying Value | $ 1,646 |
Interest Rate | 800.00% |
Maturity Date | Jun. 15, 2016 |
June 19, 2015 | |
Principal | $ 30,000 |
Discount | 28,361 |
Carrying Value | $ 1,639 |
Interest Rate | 800.00% |
Maturity Date | Jun. 18, 2016 |
June 19, 2015 | |
Principal | $ 35,408 |
Discount | 33,685 |
Carrying Value | $ 1,723 |
Interest Rate | 800.00% |
Maturity Date | Jun. 18, 2016 |
June 24, 2015 | |
Principal | $ 37,500 |
Discount | 35,870 |
Carrying Value | $ 1,630 |
Interest Rate | 800.00% |
Maturity Date | Jun. 23, 2016 |
June 24, 2015 | |
Principal | $ 35,000 |
Discount | 32,162 |
Carrying Value | $ 2,838 |
Interest Rate | 800.00% |
Maturity Date | Jun. 23, 2016 |
June 24, 2015 | |
Principal | $ 37,500 |
Discount | 34,958 |
Carrying Value | $ 2,542 |
Interest Rate | 800.00% |
Maturity Date | Jun. 23, 2016 |
July 7, 2015 | |
Principal | $ 75,000 |
Discount | 56,266 |
Carrying Value | $ 18,734 |
Interest Rate | 800.00% |
Maturity Date | Oct. 7, 2015 |
July 17, 2015 | |
Principal | $ 27,000 |
Discount | 25,837 |
Carrying Value | $ 1,163 |
Interest Rate | 800.00% |
Maturity Date | Jul. 17, 2016 |
May 18, 2015 | |
Principal | $ 25,000 |
Discount | 18,047 |
Carrying Value | $ 6,953 |
Interest Rate | 1200.00% |
Maturity Date | May 17, 2016 |