Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Apr. 26, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | Friendable, Inc. | ||
Entity Central Index Key | 0001414043 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
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 | Non-accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Interactive Data Current | Yes | ||
Entity Incorporation State Country Code | NV | ||
Entity File Number | 000-52917 | ||
Entity Public Float | $ 770,848 | ||
Entity Common Stock, Shares Outstanding | 141,965,430 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current Assets | ||
Cash | $ 52,702 | $ 11,282 |
Accounts receivable | 12,500 | 135 |
Prepaid expenses | 83,399 | 30,000 |
Due from a related party | 0 | 30,083 |
Total current assets | 148,601 | 71,500 |
Total assets | 148,601 | 71,500 |
Current Liabilities | ||
Accounts payable and accrued expenses | 2,447,706 | 1,997,326 |
Accounts payable - related party | 190,320 | 0 |
Short-term loans | 61,000 | 0 |
Convertible debentures and convertible promissory notes | 143,957 | 69,930 |
Mandatorily redeemable Series C convertible Preferred stock, 1,000,000 designated, 173,100 and 149,300 issued and outstanding at December 31, 2020 and 2019, including a premium of $74,701 and $55,549 respectively (liquidation value $210,905) at December 31, 2020 | 285,605 | 191,549 |
Derivative liability | 1,320,000 | 12,778,000 |
Liability to be settled in common stock | 988,375 | 1,005,000 |
Total current liabilities | 5,436,963 | 16,041,805 |
Total liabilities | 5,260,756 | 16,041,805 |
Commitments and contingencies (Note 7) | ||
STOCKHOLDERS' DEFICIT | ||
Common stock, $0.0001 par value, 1,000,000,000 shares authorized, 51,665,821 and 4,398,114 shares issued and outstanding at December 31, 2020 and 2019, respectively | 5,167 | 438 |
Common stock issuable, $0.0001 par value, 103,547,079 and 8,518,335 shares at December 31, 2020 and 2019, respectively. | 10,354 | 852 |
Additional paid-in capital | 31,269,833 | 16,476,758 |
Common stock subscriptions receivable (Note 8) | (4,500) | (4,500) |
Deficit | (36,569,246) | (32,443,883) |
Total stockholders' deficit | (5,288,362) | (15,970,305) |
Total liabilities and stockholders' deficit | 148,601 | 71,500 |
Series A Preferred Stock | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock, 50,000,000 authorized at par value $0.0001 | 2 | 2 |
Series B Preferred Stock | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock, 50,000,000 authorized at par value $0.0001 | $ 28 | $ 28 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
STOCKHOLDERS' DEFICIT | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized | 50,000,000 | 50,000,000 |
Common stock issuable, outstanding | 103,547,079 | 8,518,335 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, issued | 51,665,821 | 4,938,114 |
Common stock, outstanding | 51,665,821 | 4,938,114 |
Series C Convertible Preferred Stock | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock, authorized | 1,000,000 | 1,000,000 |
Preferred stock, issued | 173,100 | 149,300 |
Preferred stock, outstanding | 173,100 | 149,300 |
Preferred stock premium | $ 74,701 | $ 55,549 |
Preferred stock liquidation value | $ 210,905 | $ 210,905 |
Series A Preferred Stock | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, authorized | 50,000,000 | 50,000,000 |
Preferred stock, issued | 19,789 | 19,789 |
Preferred stock, outstanding | 19,789 | 19,789 |
Series B Preferred Stock | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, authorized | 1,000,000 | 1,000,000 |
Preferred stock, issued | 284,000 | 284,000 |
Preferred stock, outstanding | 284,000 | 284,000 |
Preferred stock liquidation value | $ 284,000 | $ 284,000 |
CONSOLIDATED STATEMENT OF COMPR
CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
REVENUES | $ 401,905 | $ 242,696 |
OPERATING EXPENSES | ||
App hosting | 47,500 | 24,068 |
Commissions | 871 | 938 |
General and administrative | 834,090 | 814,053 |
Software development and support | 613,105 | 299,124 |
Artists' performance fees | 431,639 | 0 |
Revenue shares | 660 | 0 |
Investor relations | 140,119 | 98,264 |
Sales and marketing | 108,776 | 48,375 |
Total operating expenses | 2,176,760 | 1,284,822 |
LOSS FROM OPERATIONS | (1,774,855) | (1,042,126) |
OTHER INCOME (EXPENSE): | ||
Accretion and interest expense | (450,275) | (621,149) |
Provision for settlement of lawsuit | 0 | (1,035,000) |
Loss on debt extinguishments | 0 | (7,384,867) |
Gain on foreign exchange | 2,580 | 24,731 |
Loss on extinguishment of convertible notes | (87,491) | 0 |
Loss on initial derivative expense | (1,106,500) | 0 |
Loss on settlement of derivatives | (640,822) | 0 |
Loss on change in fair value of derivatives | (68,000) | (125,000) |
Total other expense, net | (2,350,508) | (9,141,284) |
NET LOSS | $ (4,125,363) | $ (10,183,410) |
Basic and diluted loss per share | $ (0.05) | $ (2.56) |
Weighted average number of common shares outstanding | 83,486,003 | 3,981,702 |
Technology Service | ||
REVENUES | $ 397,333 | $ 239,471 |
Subscription and merchandising sales | ||
REVENUES | $ 4,572 | $ 3,225 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) | Series A Preferred Stock | Series A Preferred Stock Issuable | Series B Preferred Stock | Common Stock | Common Stock Shares Issuable | Additional Paid-In Capital | Common Stock Subscriptions | Deficit | Total |
Beginning balance, shares at Dec. 31, 2018 | 21,267 | 0 | 0 | 308,518 | 0 | ||||
Beginning balance, amount at Dec. 31, 2018 | $ 2 | $ 0 | $ 0 | $ 31 | $ 0 | $ 12,027,043 | $ (4,500) | $ (22,260,473) | $ (10,237,897) |
Debt forgiveness - related parties | 1,000,000 | 1,000,000 | |||||||
Common stock sold for cash, shares | 57,000 | 477,000 | |||||||
Common stock sold for cash, amount | $ 5 | $ 48 | 133,447 | 133,500 | |||||
Common stock issuable under debt restructuring agreement, shares | 5,902,589 | ||||||||
Common stock issuable under debt restructuring agreement, amount | $ 590 | 2,384,056 | 2,384,646 | ||||||
Preferred stock Series B sold for cash, shares | 205,000 | ||||||||
Preferred stock Series B sold for cash, amount | $ 20 | 204,980 | 205,000 | ||||||
Preferred stock Series B issued to settle AP - related party, shares | 79,000 | ||||||||
Preferred stock Series B issued to settle AP - related party, amount | $ 8 | 78,992 | 79,000 | ||||||
Conversion of convertible notes, shares | 273,418 | 120,000 | |||||||
Conversion of convertible notes, amount | $ 27 | $ 12 | 21,317 | 21,356 | |||||
Common shares issued for services, shares | 600,000 | ||||||||
Common shares issued for services, amount | $ 60 | 89,940 | 90,000 | ||||||
Common shares issued for settlement of promissory notes, shares | 2,150,000 | ||||||||
Common shares issued for settlement of promissory notes, amount | $ 215 | 537,285 | 537,500 | ||||||
Conversion of Series A preferred shares, shares | (1,478) | 1,002,970 | 2,018,746 | ||||||
Conversion of Series A preferred shares,amount | $ 100 | $ 202 | (302) | $ 0 | |||||
Fractional share issuance | 6,208 | 0 | |||||||
Net loss | (10,183,410) | $ (10,183,410) | |||||||
Ending balance, shares at Dec. 31, 2019 | 19,789 | 0 | 284,000 | 4,398,114 | 8,518,335 | ||||
Ending balance, amount at Dec. 31, 2019 | $ 2 | $ 0 | $ 28 | $ 438 | $ 852 | 16,476,758 | (4,500) | (32,443,883) | (15,970,305) |
Common shares cancelled, shares | (2,000) | ||||||||
Common shares cancelled, amount | $ 0 | (500) | (500) | ||||||
Common stock sold for cash, shares | 2,250,000 | ||||||||
Common stock sold for cash, amount | $ 225 | 59,775 | 60,000 | ||||||
Common stock issuable under debt restructuring agreement, shares | 36,193,098 | ||||||||
Common stock issuable under debt restructuring agreement, amount | $ 3,620 | 8,415,518 | 8,419,138 | ||||||
Common stock issuable under debt restructuring agreement, shares | 63,275,243 | ||||||||
Common stock issuable under debt restructuring agreement, amount | $ 6,327 | 5,049,356 | 5,055,683 | ||||||
Common shares issued towards settlement of lawsuit, shares | 750,000 | ||||||||
Common shares issued towards settlement of lawsuit, amount | $ 75 | 16,550 | 16,625 | ||||||
Conversion of Series C preferred shares, shares | 26,527,179 | ||||||||
Conversion of Series C preferred shares, amount | $ 2,653 | 351,025 | 353,678 | ||||||
Conversion of convertible notes, shares | 7,005,855 | ||||||||
Conversion of convertible notes, amount | $ 701 | 214,314 | 215,015 | ||||||
Common shares issued for services, shares | 5,736,333 | 506,667 | |||||||
Common shares issued for services, amount | $ 574 | $ 51 | 551,425 | 552,050 | |||||
Issuance of common stock previously issuable, shares | 7,196,264 | (7,196,264) | |||||||
Issuance of common stock previously issuable, amount | $ 721 | $ (721) | 0 | ||||||
Conversion of Series A preferred shares, shares | (3) | 54,076 | |||||||
Conversion of Series A preferred shares,amount | $ 0 | $ 5 | (5) | 0 | |||||
Series A preferred shares issuable to talen agents in exchange for services, shares | 118 | ||||||||
Series A preferred shares issuable to talent agents in exchange for services, amount | $ 0 | 135,617 | 135,617 | ||||||
Return of Series A preferred shares to treasury | (118) | ||||||||
Issuance of Series A preferred previously issuable | 118 | (118) | |||||||
Net loss | (4,125,363) | (4,125,363) | |||||||
Ending balance, shares at Dec. 31, 2020 | 19,786 | 0 | 284,000 | 51,665,821 | 103,547,079 | ||||
Ending balance, amount at Dec. 31, 2020 | $ 2 | $ 0 | $ 28 | $ 5,167 | $ 10,354 | $ 31,269,833 | $ (4,500) | $ (36,569,246) | $ (5,288,362) |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOW - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (4,125,363) | $ (10,183,410) |
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: | ||
Loss on debt extinguishment, net | 0 | 7,384,867 |
Notes issued for services | 0 | 20,000 |
Amortization of prepaid stock fees | 52,218 | 60,000 |
Common stock issued for services | 552,050 | 0 |
Amortization of debt discount | 115,766 | 0 |
Loss on settlement of derivative | 640,822 | 0 |
Initial derivative expense | 1,106,500 | 0 |
Loss on change in fair value of derivative | 68,000 | 125,000 |
Loss on debt conversion | 87,491 | 0 |
Premium and settlemen on stock settled debt | 267,734 | 55,549 |
Interest on convertible debentures and promissory note | 0 | 0 |
Changes in Operating Assets and Liabilities | ||
Accounts receivable | (12,365) | (135) |
Due from related party, accounts payable - related party | 220,403 | (30,083) |
Prepaid expenses | 30,000 | 0 |
Accounts payable and accrued expenses | 504,664 | 1,074,348 |
Liability to be settled in common stock | 0 | 1,005,000 |
Net cash used in operating activities | (492,080) | (488,864) |
Cash Flows from Financing Activities: | ||
Proceeds from sale of convertible preferred Series B stock | 0 | 205,000 |
Proceeds from sale of convertible preferred Series C stock | 180,000 | 136,000 |
Proceeds from issuance of convertible notes | 232,500 | 0 |
Proceeds from short-term loans | 61,000 | 0 |
Proceeds from sale of common stock | 60,000 | 133,500 |
Net cash provided by financing activities | 533,500 | 474,500 |
Net increase (decrease) in cash | 41,420 | (14,364) |
Cash - beginning | 11,282 | 25,646 |
Cash - ending | 52,702 | 11,282 |
Supplemental Cash Flow Information: | ||
Cash paid for interest | 0 | 0 |
Cash paid for income taxes | 0 | 0 |
Non-cash Investing and Financing Items: | ||
Common shares issued for prepaid expenses | 0 | 90,000 |
Series A preferred stock issued as prepaid expenses | 135,617 | 0 |
Conversion of accrued interest to common stock | 30,851 | 0 |
Conversion of accrued interest into a note payable | 25,000 | 0 |
Series B convertible preferred stock issued in exchange for accounts payable, related party | 0 | 79,000 |
Payables forgiven by related parties treated as contributed capital | 0 | 1,000,000 |
Debt and accrued interest settled with common stock | 0 | 8,178,634 |
Conversion of convertible notes converted to common stock | 97,739 | 13,002 |
Conversion of Series C redeemable preferred shares into common stock | 353,678 | 0 |
Reduction of liability to be settled with common stock | 16,625 | 0 |
Recording of debt discount from derivatives on convertible debt | 201,500 | 0 |
Derivative liability | 0 | 5,698,080 |
Reduction of derivative liability based on reset common shares issuable | 13,273,322 | 0 |
Cash consists of: | ||
Cash | $ 52,702 | $ 11,282 |
1. NATURE OF BUSINESS AND GOING
1. NATURE OF BUSINESS AND GOING CONCERN | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF BUSINESS AND GOING CONCERN | Nature of Business Friendable, Inc., a Nevada corporation (the “Company”), was incorporated in the State of Nevada. Friendable, Inc. is a mobile-focused technology and marketing company, connecting and engaging users through two distinctly branded applications. The Company initially released its flagship product Friendable, as a social application where users can create one-on-one or group-style meetups. In 2019 the Company moved the Friendable app closer to a traditional dating application with its focus on building revenue, as well as reintroducing the brand as a non-threatening, all-inclusive place where “Everything starts with Friendship”…meet, chat & date. On June 28, 2017, the Company formed a wholly owned Nevada subsidiary called Fan Pass, Inc. Fan Pass is the Company’s most recent or second app/brand, released in July, 2020. Fan Pass believes in connecting Fans of their favorite celebrity or artist, to an exclusive VIP or Backstage experience, right from their smartphone or other connected devices. Fan Pass allows an artist’s fanbase to experience something they would otherwise never have the opportunity to afford or geographically attend. The Company aims to establish Fan Pass as its premier brand and mobile platform dedicated to connecting and engaging music fans and users from anywhere around the World. Presently, until our apps gain greater adoption from paying subscribers through increased awareness, coupled with additional compelling and exclusive digital content to produce higher revenue levels, the Company has largely supported its operations through the sale of its software services, and specifically its app development services, under a contractual relationship since inception with a third party. The Company’s plan, in due course, is to replace revenue from third party app development services with revenue from its own Friendable and Fan Pass apps, which have various revenue streams currently being tested for long term and/or recurring monthly viability. On August 8, 2019 the Company filed a Designation of Series B convertible Preferred Stock with the state of Nevada, designating 1,000,000 shares of the Series B Preferred Stock with a stated value of $1.00 per share. A holder of Series B Preferred Stock has the right to convert their Series B Preferred Stock into fully paid and non-assessable shares of Common Stock. Initially, the conversion price for the Series B Preferred Stock is $.25 per share, subject to standard anti-dilution adjustments. Additionally, each share of Series B Preferred Stock shall be entitled to, as a dividend, a pro rata portion of an amount equal to 10% (Ten Percent) of the Net Revenues (“Net Revenues” being “Gross Sales” minus “Cost of Goods Sold” as defined in the agreements) derived from the subscriptions and other sales, but excluding and net of Vimeo fees, processing fees and up sells, generated by Fan Pass Inc., the wholly-owned subsidiary of the Corporation. The Series B Dividend shall be calculated and paid on a monthly basis in arrears starting on the day 30 days following the first day of the month following the initial issuance of the Series B Preferred and continuing for a period of 60 (Sixty) months. The holders of Series B Preferred stock shall have no voting rights. The holders of Series B Preferred stock shall not be entitled to receive any dividends. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company or deemed liquidation event, the holders of shares of Series B Preferred Stock shall be entitled to be paid the liquidation amount, as defined out of the assets of the Company available for distribution to its shareholders, after distributions to holders of the Series A Preferred Stock and before distributions to holders of Common Stock On August 27, 2019, a 1 for 18,000 reverse stock split of our common stock became effective. All share and per share information in the accompanying consolidated financial statements and footnotes has been retroactively adjusted for the effects of the reverse split for all periods presented. On November 25, 2019 the Company filed a Designation of Series C convertible Preferred Stock with the state of Nevada, designating 1,000,000 shares of the Series C Preferred Stock with a stated value of $1.00 per share. The Series C Preferred Stock will, with respect to dividend rights and rights upon liquidation, winding-up or dissolution, rank: (a) senior with respect to dividends with the Company’s common stock, par value 0.0001 per share (“Common Stock”)(the Series C Preferred Stock will convert into common stock immediately upon liquidation and be pari passu with the common stock in the event of litigation), and (b) junior with respect to dividends and right of liquidation to all existing and future indebtedness of the Company. The Series C Preferred Stock does not have any voting rights. Each share of Series C Preferred Stock will carry an annual dividend in the amount of eight percent (8%) of the Stated Value of $1.00 (the “Divided Rate”), which shall be cumulative and compounded daily, payable solely upon redemption, liquidation or conversion and increase to 22% upon an event of default as defined. In the event of any default other than the Company’s failure to issue shares upon conversion, the stated price will be $1.50. In the event that a default event occurswhere the Company fails to issue shares upon conversion, the stated price will be $2.00. The holder shall have the right six months following the issuance date, to convert all or any part of the outstanding Series C Preferred Stock into shares of common stock of the Company. The conversion price shall equal the Variable Conversion Price. The “Variable Conversion Price” shall mean 71% multiplied by the market price, representing a discount rate of 29%. Market price means the average of the two lowest trading prices for the Company’s common stock during the twenty trading day period ending on the latest complete trading day prior to the conversion date. Upon any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, or upon any deemed liquidation event, after payment or provision for payment of debts and other liabilities of the Company, and after payment or provision for any liquidation preference payable to the holders of any Preferred Stock ranking senior upon liquidation to the Series C Preferred Stock, if any, but prior to any distribution or payment made to the holders of Common Stock or the holders of any Preferred Stock ranking junior upon liquidation to the Series C Preferred Stock by reason of their ownership thereof, the Holders will be entitled to be paid out of the assets of the Company available for distribution to its stockholders. The Company will have the right, at the Company’s option, to redeem all or any portion of the shares of Series C Preferred Stock, exercisable on not more than three trading days prior written notice to the Holders, in full, in accordance with Section 6 of the designations at a premium of up to 35% for up to six months. Company’s mandatory redemption: On the earlier to occur of (i) the date which is twenty-four (24) months following the Issuance Date and (ii) the occurrence of an Event of Default (the “Mandatory Redemption Date”), the Company shall redeem all of the shares of Series C Preferred Stock of the Holders (which have not been previously redeemed or converted). In conjunction with the Company’s intention to raise future financing of up to $5 million through an offering of up to 500,000 Series D convertible Preferred Stock at the offering price of $10.00 per share, on March 29,2021 the Company received a Notice of Qualification from the Securities and Exchange Commission indicating approval from the Company to proceed with the offering pursuant to Tier 2 of Regulation A of the Securities Act, which provides exemption from registration of such securities. Each Series D preferred share is convertible, at the option of the holder, at any time, into nonassessable common shares at 80% of the average closing price reported on OTCMarkets for the 20 trading days preceding conversion. On April 5, 2021 the Company filed the necessary Certificate of Designation with the state of Nevada to designate 500,000 shares of Series D Preferred stock from the Company’s total authorized and unissued Preferred Stock. Going Concern 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. As of December 31, 2020, the Company has a working capital deficiency of $5,288,362, an accumulated deficit of $36,569,246 and has a stockholder’s deficit of $5,288,362 and its operations continue to be funded primarily from sales of its stock, the issuance of convertible debentures and short-term loans. During the year ended December 31, 2020 the Company had a net loss and net cash used in operations of $4,125,363 and $492,080. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issuance of this report. The ability of the Company to continue as a going concern is dependent on the Company’s ability to obtain the necessary financing through the issuance of convertible notes and equity instruments. 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 and equity sales. 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 | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Principles of Consolidation The consolidated financial statements include all the accounts of the Company and all of its wholly owned subsidiaries as of December 31, 2020 and 2019. All material intercompany accounts and transactions have been eliminated in the accompanying consolidated financial statements. The Company’s fiscal year end is December 31. Use of Estimates The preparation of these 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 financial statements and the reported amounts of revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to valuation of convertible debenture conversion options, derivative instruments, 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 Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. Revenue Recognition In accordance with ASC 606, revenue is recognized when the following criteria have been met; valid contracts are identified with specific customers, performance obligations have been identified, price is determinable, price is allocated to performance obligations, and the Company has satisfied the performance obligations. Revenue generally is recognized net of allowances for returns and any taxes collected from customers and subsequently remitted to governmental authorities. During the years ended December 31, 2020 and December 31, 2019, the Company derived revenues primarily from the development of apps for a third party of $ 397,333 and $ 239,477 respectively, and such revenues were recognized upon completion of services. Secondarily, the Company’s other revenues from subscription fees and merchandising sales from the Friendable and Fan Pass apps totaled $ 4,572 for the year ended December 31, 2020 (2019:$3,225) and were recognized when received. Pursuant to various agreements between Fan Pass, Inc. and music artists, managers, talent agencies, partners and/or record labels and certain round one investors (collectively, “Revenue Share Participants”) such individuals and/or entities are eligible to receive a share of net proceeds derived by the Company from subscription receipts from the Fan Pass app and from merchandise sales. The Company has established an “Artist Pool” equal to 40% of net Fan Pass “Fan Subscriptions” received, in which the “pool” is paid out to individual artists based on fan activity or “Content Views” within an artist’s channel on the Fan Pass app. Additionally, a standard 50% of net merchandise sales (created by Fan Pass for each artist) received or sold by each artist is shared with each artist. In some instances, the Company may adjust the sharing percentage for special situation artists or “Mega Stars” who may command a different merchandise split. Certain investors, along with Series B Preferred stockholders and the holder of a promissory note, , are entitled to proportionately participate in an “Investor Pool” equal to approximately 8% of net subscription and net merchandising sales receipts. In addition, as compensation for bringing music artists to perform for the initial Fan Pass app launch, Eclectic Artists is eligible receive 5% of Fan Pass net revenue. Net revenue is defined as gross receipts, minus source commissions and other cost of goods sold as defined in the agreements, including deduction for the cost of merchandise, hosting, streaming and other platform and processing fees. During the year ended December 31, 2020 the Company incurred a revenue sharing expense of $660, and had a liability of $647 at December 31, 2020 which is included in accounts payable and accrued expenses. Advertising Costs The Company’s policy regarding advertising is to expense advertising when incurred. During the year ended December 31, 2020, the Company incurred $108,776 (December 31, 2019: $48,375) 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 The Company accounts for intangible assets in accordance with ASC 350, Intangibles – Goodwill and Other. The Company assesses potential impairments to intangible assets when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered. Intangible assets with finite lives are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of intangible assets with finite lives is measured by comparing the carrying amount of the asset to its fair value. If the future value of the asset is lower than its carrying value, the Company recognizes an impairment loss for the amount by which the carrying value of the asset exceeds the related estimated fair value. Intangible assets with indefinite lives are tested for impairment annually or more frequently are tested for impairment annually or more frequently if events or changes in circumstances indicate that it is more likely than not that the intangible asset is impaired. 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 Derivative liabilities The Company had a financial instrument associated with a debt restructuring agreement and also has convertible notes with embedded conversion option derivatives. The Company evaluates all its financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 815-10 – Derivative and Hedging – Contract in Entity’s OwEquity In July 2017, FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features. These amendments simplify the accounting for certain financial instruments with down-round features. The amendments require companies to disregard the down-round feature when assessing whether the instrument is indexed to its own stock, for purposes of determining liability or equity classification. The guidance was adopted as of January 1, 2019 and the adoption did not have any impact on its consolidated financial statement and there was no cumulative effect adjustment. 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. In 2019 the Company adopted ASU 2018-07 which expands the measurement requirements to non-employees. 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 Company’s stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to the Company’s 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 statement of operations over the requisite service period. 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. Accounts Receivable and Allowance for Doubtful Accounts The Company monitors its outstanding receivables for timely payments and potential collection issues. At December 31, 2020 and 2019, the Company did not have any allowance for doubtful accounts. Financial Instruments Financial assets and financial liabilities are recognized in the balance sheet when the Company has become party to the contractual provisions of the instruments. The Company’s financial instruments consist of accounts receivable, accounts payable, convertible debentures, liability to be settled with common stock, derivatives, mandatorily redeemable Series C Preferred stock and promissory notes. 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 Company’s financial instruments recorded at fair value in the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Concentrations The Company has Substantial Client Concentration, with one Client Accounting for a Substantial Portion of our Revenues. In the year ended December 31, 2020 we derived 98.9% (2019: 98.7%) of our revenue from one client. There are inherent risks whenever a large percentage of total revenues are concentrated with a limited number of clients. It is not possible for us to predict the future level of demand for our services that will be generated by this client or the future demand for the products and services of other similar clients. A loss of this client or the failure to retain similar clients could negatively affect our revenues and results of operations and/or trading price of our common stock. At December 31, 2020 the Company had an accounts receivable of $12,500, all due from that one main client. 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 statement of operations. 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 December 31, 2020, there were approximately 1,466,768,887 potentially dilutive shares outstanding. Potential dilutive shares: 60,908 Warrants outstanding 47,107,032 Common shares issuable upon conversion of convertible debt 1,396,916,100 Total shares issuable upon conversion of Preferred Series A shares 1,136,000 Total shares issuable upon conversion of Preferred Series B shares 22,468,847 Total shares issuable upon conversion of Preferred Series C shares 1,466,768,887 As of December 31, 2019, there were approximately 122,051,838 potentially dilutive shares outstanding. Potential dilutive shares: 60,908 Warrants outstanding 2,212,523 Common shares issuable upon conversion of convertible debt 116,248,041 Total shares issuable upon conversion of Preferred Series A shares 1,136,000 Total shares issuable upon conversion of Preferred Series B shares 2,394,366 Total shares issuable upon conversion of Preferred Series C shares 122,051,838 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. Reclassifications Accrued interest of $ 51,980 was reclassified from convertible debentures and convertible promissory notes to accounts payable and accrued expenses at December 31, 2019 to conform to the December 31, 2020 presentation. Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (ASC Topic 842) (“ASU 2016-02”), which requires lessees to recognize at the commencement date for all leases, with the exception of short-term leases, (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The ASU requires adoption using a modified retrospective transition approach with either (a) periods prior to the adoption date being recast or (b) a cumulative-effect adjustment recognized to the opening balance of retained earnings on the adoption date with prior periods not recast. As of December 31, 2020 the Company has no lease obligations. |
3. INTANGIBLE ASSETS
3. INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
Intangible Assets, Net (Including Goodwill) [Abstract] | |
INTANGIBLE ASSETS | As of December 31, 2020 and 2019, the Company owns the Friendable Properties which includes domain names, logos, icons, and registered trademarks for which it paid cash consideration of $35,000. During 2018 an impairment provision for $35,000 was recorded through the statement of operations to impair the intangible assets to $nil. More recently, with the launch of the Fan Pass app, the Company has continued to protect and register new intellectual property when it is created, with the cost expensed to general and administrative expense, when incurred. |
4. RELATED PARTY TRANSACTIONS A
4. RELATED PARTY TRANSACTIONS AND BALANCES | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS AND BALANCES | During the year ended December 31, 2020, the Company incurred $418,333 (2019: $459,200) in salaries and payroll taxes to officers and directors with such costs being recorded as general and administrative expenses. During the year ended December 31, 2020, the Company incurred $47,500 , $485,037 and $60,000 (2019: $24,068, $299,124, and $58,883) in app hosting, app development and rent to a company with two officers and directors in common with such costs being recorded as app hosting, software development and support and general and administrative expenses. During the year ended December 31, 2019, the Company issued a Securities Purchase agreement to a vendor company with two officers and directors in common for the purchase of 79,000 Series B preferred stock with the purchase price of $79,000 being applied to accounts payable due to the vendor. The price was based on recent sales of Series B shares for $1.00 per share. During the year ended December 31, 2020 two directors converted 3 shares of Series A Preferred Stock into 54,076 shares of common stock. In addition, concurrent with the issuance of 118 Series A Shares to Eclectic Artists LLC, a talent agency, pursuant to the terms of a Partner Agreement the same two directors returned 118 Series A Preferred shares to the Company’s treasury. As of December 31, 2020, the Company had a stock subscription receivable totaling $4,500 (December 31, 2019: $4,500) from an officer and director and from a company with an officer and director in common. As of December 31, 2020, accounts payable related party includes $190,320 (December 31, 2019: due from related party $30,083) representing amounts due to/from a company with two officers and directors in common for services provided by that company, and accounts payable and accrued expenses includes $918,408 (December 31, 2019: $783,416) payable in salaries to directors and officers of the Company. The amounts are unsecured, non-interest bearing and are due on demand. During the year ended December 31, 2019, two directors converted 588 shares of Series A preferred stock at the contractual conversion rate into 1,002,970 shares of common stock and donated them to the Diocese of Monterey and other parties related to the directors converted 890 Series A preferred shares into 2,018,746 common shares that are issuable at December 31, 2019. During the year ended December 31, 2019, three officers forgave debt totaling $400,000 and a company controlled by two officers of the Company forgave debt totaling $600,000. The total amount is reflected as contributed capital. |
5. CONVERTIBLE DEBENTURES
5. CONVERTIBLE DEBENTURES | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE DEBENTURES | On March 26, 2019 the Company entered into a Debt Restructuring Agreement (the “Agreement”) with Robert A. Rositano Jr. (“Robert Rositano”), Dean Rositano (“Dean Rositano”), Frank Garcia (“Garcia”), Checkmate Mobile, Inc. (“Checkmate”), Alpha Capital Anstalt (“Alpha”), Coventry Enterprises, LLC (“Coventry”), Palladium Capital Advisors, LLC (“Palladium”), EMA Financial, LLC (“EMA”), Michael Finkelstein (“Finkelstein”), and Barbara R. Mittman (“Mittman”), each being a debt holder of the Company. The debt holders agreed to convert their debt of approximately $6.3 million and accrued interest of approximately $1.8 million into an initial 5,902,589 shares of common stock as set forth in the Agreement upon the Company meeting certain milestones including but not limited to: the Company effecting a reverse stock split and maintaining a stock price of $1.00 per share; being current with its periodic report filings pursuant to the Securities Exchange Act; certain vendors and Company employees forgiving an aggregate of $1,000,000 in amounts owed to them; the Company raising not less than $400,000 in common stock at a post-split price of not less than $.20 per share; and certain other things as further set forth in the Agreement. The debt holders will be subject to certain lock up and leak out provisions as contained in the Agreement. As part of the Agreement the parties signed a Rights to Shares Agreement. Whereas the Agreement called for all the shares to be delivered at closing, the holders are generally restricted to beneficial ownership of up to 4.99% of the company’s common shares outstanding. The Rights to Shares Agreement allows for the Company to issue shares to each holder up the 4.99% limitation while preserving the holders’ rights to the total shares in schedule A of the Agreement. Accordingly, the 5,902,589 common shares were recorded as issuable in equity, December 26, 2019, all parties signed an amendment to the Agreement which set forth, among other things, the following: Company Principals have given Holders notice that it has satisfied all conditions of closing. The Agreement is considered Closed as of November 5, 2019 (“Settlement Date”) and any conditions of closing not satisfied are waived. Reset Dates. The “Reset Dates” as set forth in Section 1(h) of the Agreement shall be as follows: March 4, 2020 and July 2, 2020. As of the reset dates the holders can convert all or part of the settled note amounts at the lower of (i) 75% of the closing bid price for the Common Stock on such respective Reset Date, or (ii) the VWAP for the Company’s Common Stock for the 7 trading days immediately preceding and including such respective Reset Dates. This reset provision provides for the issuance of additional shares above the initial 5,902,589 shares for no additional consideration as measured at each of the two reset dates. On March 4, 2020 the Company became obligated to issue an additional 36,193,098 shares of common stock and on July 2,2020 it became obligated to issue an additional 63,275,242 shares, for a total amount of shares due of 105,370,930. The Company determined that the reset provision represents a standalone derivative liability. Accordingly, this debt restructure transaction was accounted for in 2019 as an extinguishment of debt for consideration equal to the $2,384,646 value of the 5,902,589 common shares issuable, based on the $0.404 quoted trading price of the Company’s common stock price on the settlement date, and the initial fair value of the derivative liability of $12,653,000, resulting in a loss on debt extinguishment of $6,954,920. The Company adjusts its derivative liability to fair value at each reporting and settlement date, with changes in fair value reported in the statement of operations. The Company estimated the fair value of the obligations to issue common stock pursuant to the Debt Restructuring Agreement, as amended, using Monte Carlo simulations and the following assumptions: November December June 5, 2019 31, 2019 30, 2020 Volatility 617% 738.1% 293.6% Risk Free Rate 1.59% 1.6% .13% Expected Term 0.66 0.5 0.01 On the second (and final) reset date of July 2, 2020 the Company determined that the total common shares issuable to fully settle this debt amounted to 105,370,930 and a derivative liability no longer exists. The Company recognized a final loss on settlement of $640,821 which represents the difference between the fair value of the 105,370,936 common shares due and the fair value of the derivatives settled. On September 21, 2020, Ellis International LP (as successor to Alpha Capital Anstalt) submitted a request to drawdown and, on September 29, 2020, was issued 687,355 common shares against its entitlement above and reclassified from issuable shares in the accompanying balance sheet and statement of changes in stockholder equity. On November 9, 2020 and on December 9, 2020 Coventry Enterprises requested and was issued 915,000 and 1,262,000 common shares respectively, and on November 23, 2020 Barbara Mittman requested and was issued 1,134,353 (net) common shares against their respective entitlement under the debt settlement agreement, which was reclassified from issuable shares. Subsequent to December 31, 2020 there were further drawdowns and common stock issuances totaling 46,266,310 shares. These issuances were reclassified from issuable to issued common shares. Derivative Liabilities The Company accounts for its obligation to issue common stock (“Reset Provision”) as derivative instruments in accordance with ASC Topic 815, “Derivatives and Hedging” which are reflected as liabilities at fair value on the balance sheet, with changes in fair value reported in the statement of operations. Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between willing and able market participants. The number of shares of common stock the Company could be obligated to issue, is based on future trading prices of the Company’s common stock. To reflect this uncertainty in estimating the fair value of the potential obligation to issue common stock, the Company uses a Monte Carlo model that considers the reporting date trading price, historical volatility of the Company’s common stock, and risk free rate in estimating the fair value of the potential obligation to issue common stock. The results of the Monte Carlo simulation model are most sensitive to inputs for expected volatility. Depending on the availability of observable inputs and prices, different valuation models could produce materially different fair value estimates. The estimated fair values may not represent future fair values and may not be realizable. We categorize our fair value estimates in accordance with ASC 820 based on the hierarchical framework associated with the three levels of price transparency utilized in measuring financial instruments at fair value as discussed above. The following is a summary of activity related to the reset provision derivative liability for the years ended December 31, 2020 and 2019: Balance, December 31, 2018 $ - Reset provision 12,653,000 Change in fair value 125,000 Balance, December 31, 2019 $ 12,778,000 Balance, Derivative Liability at December 31, 2019 $ 12,778,000 Record obligation to issue additional shares (13,474,821 ) Loss on settlement of derivative 640,821 Loss on change in fair value of derivative 56,000 Balance, Reset provision derivative liability at December 31, 2020 $ - |
6. COVERTIBLE PROMISSORY NOTES
6. COVERTIBLE PROMISSORY NOTES | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
PROMISSORY NOTE AND CONVERTIBLE PROMISSORY NOTE | The following is a summary of Convertible Promissory Notes at December 31, 2020: Issuance: Principal Accrued Principal and Date Outstanding Interest Accrued Interest J.P. Carey Inc. March 30, 2017 - $ 20,029 $ 20,029 J.P. Carey Inc May 20, 2020 $ 60,000 8,996 68,996 J.P. Carey Inc June 11, 2020 10,000 - 10,000 Green Coast Capital International April 6, 2020 10,755 848 11,603 Ellis International LP October 13, 2020 100,000 2,190 102,190 Trillium Partners LP December 3, 2020 21,436 258 21,694 Trillium Partners LP December 8, 2020 27,500 145 27,645 Total $ 229,691 $ 32,466 $ 262,157 Less: Discount (85,734 ) Net carrying value December 31, 2020 $ 143,957 The following is a summary of Convertible Promissory Notes at December 31, 2019: Issuance: Principal Accrued Principal and Date Outstanding Interest Accrued Interest J.P. Carey Inc. March 30, 2017 $ 65,930 $ 51,980 $ 117,910 World Market Ventures Assigned from above 4,000 - 4,000 Carrying value December 31, 2019 $ 69,930 $ 51,980 $ 121,910 Further information concerning the above Notes is as follows: JP Carey Convertible Note dated March 30, 2017 and assignments On April 7, 2017, the Company entered into a Settlement Agreement with Joseph Canouse (the “Agreement”). The Company and Mr. Canouse had been in a dispute regarding what amount, if any, was owed pursuant to a consulting agreement between the parties signed in April 2014. In December 2016, Mr. Canouse obtained a judgment in state court in Georgia and the right to garnish the Company’s bank accounts. Pursuant to the Settlement Agreement, the Company agreed to issue an 8% Convertible Note in the principal amount of $82,931 (the “Note”). The Note was issued to J.P. Carey LLC an entity controlled by Mr. Canouse. Although the Note is dated March 30, 2017, it was issued on April 7, 2017. The note maturity date was September 30, 2017. In return for the issuance of the Note, Mr. Canouse filed a Consent Motion to Withdraw Judgment, dismiss all garnishments, and cease all collection activities. The Note is convertible into common stock, subject to Rule 144, at any time after the issue date at the lower of (i) the closing sale price of the common stock on the trading day immediately preceding the closing date, which was $20.00 per share, and (ii) 50% of the lowest sale price for the common stock during the twenty-five (25) consecutive trading days immediately preceding the conversion date or the closing bid price, whichever is lower. Mr. Canouse does not have the right to convert the Note, to the extent that he would beneficially own in excess of 4.99% of our outstanding common stock. The note defines several events that constitute default including failure to pay principal and interest by the maturity date of September 30, 2017 and failure to comply with the exchange act. 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 Note becomes immediately due and payable. The Company defaulted by not paying the principal and interest on September 30, 2017 and has been recording interest at the 24% default rate. The Company also defaulted by being late with filing the Form 10-K on May 29, 2020. During the year ended December 31, 2019, J.P. Carey converted $1,002 of principal into 120,000 shares of the Company’s common stock at a price of $0.0084 and J.P. Carey assigned $10,000 of the note to World Market Ventures, LLC and assigned $6,000 of the note to Anvil Financial Management Ltd LLC. The assignments carry the same conversion rights as the original note. World Market Ventures converted $6,000 of principal into 120,000 shares of the Company’s common stock at a price of $0.05. Anvil converted $6,000 of principal into 120,000 shares of the Company’s common stock at a price of $0.05. At December 31, 2019, the J.P. Carey note balance was $ 69,930 and, including accrued interest of $51,981, totaled $121,910, including the portion assigned to World Market Ventures of $4,000. During the year ended December 31, 2020: World Market Ventures converted the remaining balance of $4,000 of principal into 72,595 shares of the Company’s common stock at a price of $0.0551. On April 6, 2020 JP Carey assigned $35,000 of the note balance to Green Coast Capital International. The assignment carried the same conversion rights as the original note. During the twelve months ended December 31, 2020 Green Coast converted $24,245 of principal into 859,283 shares of common stock of the Company at an average price of $0.029 and the Company incurred $414 of interest on the assigned note. As of December 30, 2020 the assigned note had a principal balance of $10,755 and an interest balance of $848. J.P. Carey converted the remaining principal balance of $30,930 and $18,020 of interest into 1,642,162 shares of the Company’s common stock at a price of $0.029. On December 31, 2020 JP Carey assigned $25,000 of the outstanding accrued interest balance to Trillium Partners LP. The assignment carried the same conversion rights as the original note. On December 21,2020 JP Carey converted $10,500 of the outstanding accrued interest balance to 2,884,615 common shares at a price of $0.0039. At December 31, 2020, the remaining JP Carey accrued interest was $20,029, which has been accounted for as having an embedded derivative liability due to the variable conversion price. Green Coast Capital International Securities Purchase Agreement and Convertible Note dated April 8, 2020 On April 8, 2020, the Company entered into a Securities Purchase Agreement (the “SPA”) whereby the Company agreed to sell to the holder convertible notes in amounts up to $150,000. The note holder shall be entitled to a pro rata share of 20% of the net revenues (excluding Brightcove) derived from subscriptions and other sales of Fan Pass, Inc., a wholly owned subsidiary of the Company. The 20% pays out two times the initial investment and continues at 5% for a period of five years. On April 8, 2020 the Company issued a 0% note to Green Coast under this SPA with a maturity date of October 8, 2020 and received $35,000 in cash. The Note is convertible into common stock, subject to Rule 144, at any time after the issue date at $0.20 per share. On the date of issuance, the Company recorded a derivative liability of $228,000, resulting in derivative expense of $193,000 and a discount against the note of $35,000 to be amortized into interest expense through the maturity date of October 8, 2020. Green Coast exercised its conversion right on November 17, 2020 and received 175,000 common shares in full settlement of the note. JP Carey Securities Purchase Agreement and Convertible Note dated May 20, 2020 On May 20, 2020, the Company entered into a Securities Purchase Agreement (the “SPA”) whereby the Company agreed to sell to the holder convertible notes in amounts up to $60,000. The note holder shall be entitled to a pro rata share of 20% of the net revenues (excluding Brightcove) derived from subscriptions and other sales of Fan Pass, Inc., a wholly owned subsidiary of the Company. The 20% pays out two times the initial investment and continues at 5% for a period of five years. At September 30,2020 no accrual for the net revenue share was material. On May 20, 2020 the Company issued a 0% interest rate note to JP Carey under this SPA with a maturity date of January 1, 2021 and received $60,000 in cash in three closings; $30,000 on April 9, 2020, $15,000 on May 13, 2020, and $15,000 on May 20, 2020. The Note is convertible into common stock, subject to Rule 144, at any time after the issue date at $0.02 per share. The holder does not have the right to convert the note, to the extent that the holder would beneficially own in excess of 4.9% of our outstanding common stock. The note defines several events that constitute default including failure to pay principal and interest by the maturity date and failure to comply with the exchange act. 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 note becomes immediately due and payable. Under certain default events the Company may incur a penalty of 20% to 50% of the note principal. Further, if the Company fails to comply with the exchange act the conversion price is the lowest price quoted on the trade exchange during the delinquency period. Upon certain default events the conversion price may change. Therefore, the embedded conversion option is bifurcated and treated as a derivative liability. On the date of issuance, the Company recorded a derivative liability of $233,000, resulting in derivative expense of $173,000 and a discount against the note of $60,000 to be amortized into interest expense through the maturity date. The Company defaulted by being late with filing the Form 10-K on May 29, 2020. The Company accrued $8,996 of interest at the default rate of 24% for the period from May 29, 2020 to December 31, 2020. JP Carey Convertible Note dated June 11, 2020 On June 11, 2020, the Company issued a 0% note to JP Carey with a maturity date of January 15, 2021 and received $10,000 in cash. The Note is convertible into common stock, subject to Rule 144, at any time after the issue date at $0.01 per share. The holder does not have the right to convert the note, to the extent that the holder would beneficially own in excess of 9.9% of our outstanding common stock. The note defines several events that constitute default including failure to pay principal and interest by the maturity date and failure to comply with the exchange act. 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 note becomes immediately due and payable. Under certain default events the Company may incur a penalty of 20% to 50% of the note principal. Further, if the Company fails to comply with the exchange act the conversion price is the lowest price quoted on the trade exchange during the delinquency period. Upon certain default events the conversion price may change. Therefore, the embedded conversion option is bifurcated and treated as a derivative liability. On the date of issuance, the Company recorded a derivative liability of $63,000, resulting in derivative expense of $53,000 and a discount against the note of $10,000 to be amortized into interest expense through the maturity date. Ellis International LP Convertible Note dated October 13, 2020 On October 13, 2020, the Company issued a 10% convertible note in the principal amount of $100,000 to Ellis International LP with a maturity date of October 13, 2022 and received cash of $95,000 (net of $5,000 deducted for the noteholder’s legal fees). The Note is convertible into common stock, subject to Rule 144, at any time after the issue date. The Conversion Price shall be 75% of the 3 day VWAP as reported by Bloomberg LP for the 3 trading days preceding conversion. The holder does not have the right to convert the note, to the extent that the holder would beneficially own in excess of 4.99% of our outstanding common stock. The note defines several events that constitute default including failure to pay principal and interest by the maturity date and failure to comply with the exchange act. In the event of default, the amount of principal and interest not paid when due bear default interest at the rate of 18% per annum and the note becomes immediately due and payable. At December 31, 2020 the outstanding balance on the note was $27,500 principal and $ 2,190 accrued interest. Trillium Partners LP Convertible Note dated December 3, 2020 As discussed in the section describing the JP Carey Convertible Note originally dated March 30, 2017, on December 3, 2020 JP Carey assigned $25,000 of the outstanding interest balance to Trillium Partners LP with the same conversion rights and the 24% default interest rate as the original note. On December 23, 2020 Trillium converted $3,564 of the outstanding balance, $214 of accrued interest and $1,025 of conversion fees (total $ 4,803) to 1,372,200 common shares at a price of $ 0.0035 per share. At December 31, 2020 the remaining principal balance was $ 21,438 and accrued interest was $ 258. Trillium Partners LP Convertible Note dated December 8, 2020 On December 8, 2020, the Company issued a 8% convertible note in the principal amount of $27,500 to Trillium Partners LP with a maturity date of December 8,2021 and received cash of $25,000 (net of $2,500 deducted for the noteholder’s legal fees). The Note is convertible into common stock, subject to Rule 144, at any time after the issue date The Conversion Price shall be equal to the lower of: (i) the Fixed Price of $0.001 per share ; and (ii) the Variable Conversion Price, being 50% of the lowest trading price for the common stock during the 30 trading day period prior to conversion. The holder does not have the right to convert the note, to the extent that the holder would beneficially own in excess of 4.99% of our outstanding common stock. The note defines several events that constitute default including failure to pay principal and interest by the maturity date and failure to comply with the exchange act. In the event of default, the amount of principal and interest not paid when due bear default interest at the rate of 18% per annum and the note becomes immediately due and payable. At December 31, 2020 the outstanding balance on the note was $100,000 principal and $145 accrued interest. As discussed above, the Company determined that the conversion options embedded in certain convertible debt meet the definition of a derivative liability. The Company estimated the fair value of the conversion options at the date of issuance, and at December 31, 2020, using Monte Carlo simulations and the following range of assumptions: Volatility 329% – 610% Risk Free Rate 0.09%- 0.65% Expected Term 0.25 – 1.781 The following is a summary of activity related to the embedded conversion options derivative liabilities for the twelve months ended December 31, 2020. Balance, December 31, 2019 $ - Initial derivative liabilities charged to operations 1,106,500 Initial derivative liabilities recorded as debt discount 201,500 Change in fair value loss 12,000 Balance, December 31, 2020 $ 1,320,000 |
7. SHORT TERM LOANS
7. SHORT TERM LOANS | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
SHORT TERM LOANS | The Company received short term, interest free, loans of $10,000, $16,000, $15,000 and $20,000 (total $61,000) on July 9, 2020, August 13, 2020, September 2, 2020 and September 28, 2020 respectively, from Joseph Canouse, the provider of the J.P. Carey Inc. convertible promissory notes. |
8. COMMITMENTS AND CONTINGENCIE
8. COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | The following summarizes the Company’s commitments and contingencies as of December 31, 2020: (i) Employment agreements with related parties. On April 3, 2019, the Company entered into employment agreements with three officers. Pursuant to the agreements, the Company shall pay officers an aggregate annual salary amount of $400,000. Upon a successful launch of the Company’s Fan Pass mobile app or website, and the Company achieving various levels of subscribers, the officers are eligible to receive additional bonuses and salary increases. With mutual agreement with the Company, effective August 31, 2020 one of the officers chose early termination of his employment, which reduced the annual commitment for the remaining officers to $300,000. (ii) Lawsuit Contingency - Integrity Media, Inc. Integrity Media, Inc. (“Integrity”) had previously filed a lawsuit against the Company and the CEO of the Company for $500,000 alleging breach of contract alleging the Company failed to deliver marketable securities in exchange for services. The Company answered the allegations in court and Integrity filed a motion attacking the Company’s answers. While the court did not strike those responses, the clerk of the court entered a default judgment against the Company in the amount of $1,192,875 plus 10% interest. On May 8, 2019, the Company received a tentative ruling on the Company’s motion to vacate the default judgement whereby the previously entered default judgement was voided and a trial date of August 26, 2019 was set. On September 19, 2019, the Company entered into a Settlement Agreement, as Amended, with Integrity Media settling the civil action known as Integrity Media, Inc. vs. Friendable, Inc. et al., Orange County Case No. 30-2016-00867956-CU-CO-CJC. Pursuant to the Settlement Agreement, the Company agreed to issue to Integrity 750,000 shares of its common stock to be issued in tranches every 30 days or according to the instructions of Integrity, in exchange for 275 of the Company’s preferred shares held by Integrity and the cash payment of $30,000 for costs. Robert Rositano, the Company’s CEO, has also personally guaranteed the Company’s compliance with the terms of the Settlement Agreement. The cash payment is to be made within 6 months of the date of the Settlement Agreement. On April 12, 2021 the cash amount was paid by cashier’s check. However, at the date of this filing the preferred shares have not been returned. Additionally, Integrity will be entitled to additional shares if (i) the price of the Company’s common stock is below $1.34 at either the 120 day or 240 day reset dates set forth in the Company’s Debt Restructure Agreement as amended entered into with various debt holders on March 26, 2019 effective November 5, 2019. The Company determined that a total of 4,275,000 additional shares would be issuable on the first “reset” date of March 4, 2020 based on a share price of $0.20 on that date and a total of 7,537,500 additional shares would be issuable on the second “reset” date of July 2, 2020 based on a share price of $0.08 on that date, for a total of 12,562,500 shares. Integrity will also be entitled to a “true-up” by the issuance of additional common shares on the issuance date should the share price of the Company’s common stock on the issuance date be below $1.00. It was determined by the Company that its liability was $1,005,000 ($750,000 plus a premium of $255,000), in accordance with ASC 480. On August 28, 2020 Integrity requested and was issued 750,000 common shares, which Integrity advised the Company realized $16,625 when sold. Accordingly, at December 31, 2020 the Company reduced its liability payable in common stock from $1,005,000 to $988,375 and retained $30,000 as an accrued liability for costs. On October 14, 2020 the Company filed a “Declaration” with the Santa Clara County Courts challenging Integrity’s future ability to convert additional shares based on “Stock Market Manipulation” designed to harm the Company’s share price, valuation and number of shares issuable to Integrity following its sales. Additionally, the Company contended that Integrity disregarded the volume limitation set forth in its settlement for the Company’s thinly traded securities and caused a potential third party capital investment of $150,000 to be rescinded. The court agreed with the Company’s declaration that Integrity should have filed a motion so the Company would have the opportunity to present all arguments and evidence in opposition to deny Integrity’s application to enter judgment. (iii) Lawsuit Contingency - Infinity Global Consulting Group Inc. Infinity Global Consulting Group Inc. had previously filed a default judgement on May 29, 2018 in the 11 th ver received an actual notice of the lawsuit. Accordingly, on November 16, 2020 the Company filed a motion to set aside the default judgement. At the date of this filing, the motion still awaits a hearing and no accrued expense at December 31,2020 has been established. (iv) Claim asserted by StockVest On March 11, 2021 the Company received claims asserted by StockVest for (a) the issuance of 1,054,820 common shares (market value of approximately $19,000) representing anti-dilution stock as additional compensation for services provided to the Company pursuant to a certain Consulting, Public Relations and Marketing Letter Agreement dated July 6, 2017, and (b) because said additional stock had not been issued by the Company, StockVest asserted an additional claim for liquidated damages of $155,000. The Company believes that these asserted claims are without merit. Accordingly, no accrued expense at December 31, 2020 has been established for these claims. COVID-19 Disclo sure The coronavirus pandemic has at times adversely affected the Company’s business and is expected to continue to adversely affect certain aspects of our merchandise offerings and custom artist collections of merchandise specifically. This impact on our operations, supply chains and distribution systems may also impair our ability to raise capital. There is uncertainty around the duration and breadth of the COVID-19 pandemic and, as a result, uncertainty on the ultimate impact on our business. Such impact on the Company’s financial condition and operating results cannot be reasonably estimated is dependent on future developments, which are highly uncertain and cannot be predicted |
9. COMMON AND PREFERRED STOCK
9. COMMON AND PREFERRED STOCK | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
COMMON AND PREFERRED STOCK | Common Stock: During the year ended December 31, 2019, the Company: Issued 393,418 shares of common stock to two convertible note holders for partial conversion of an aggregate of $21,356 of the notes at the contractual conversion rates. 120,000 of the shares remained issuable as of December 31, 2019. Issued 534,000 shares of common stock to various subscribers of common stock under security purchase agreements at $0.25 per share for a total of $133,500. Certain of these agreements contained a provision whereby the founders of the Company were to issue to the subscribers (a) an aggregate of 47,000 shares of common stock from their personal holdings and (b) another amount of common shares (43,811) by converting their held Series A preferred shares as measured on the date one year from the closing of the offering. There is no accounting effect for these transfers. In addition, other agreements contained a provision whereby the Company would set aside 10% of future net revenue from a specific product and share ratably with the investors. The Company has reviewed ASC 470-10-25, “Sales of Future Revenues or Various other Measures of Income.” and determined that no debt provision is needed. The investors who received this benefit did not pay additional consideration compared to those who did not receive it. Therefore, the additional feature is a detachable unit with $0 value. 477,000 shares remained issuable as of December 31, 2019. In March 2020, the Founder converted 3 Series A Preferred Shares to meet their personal commitment to transfer their common shares to the investors. Issued 600,000 shares of common stock to a consultant in exchange for future services valued at $90,000 of which $30,000 remained in prepaid expense at December 31, 2019. Issued 2,150,000 shares of common stock to settle a promissory note and accrued interest of $102,500 and recognized a loss on debt extinguishment of $435,000 based on the $537,500 value based on recent sales. Issued 1,002,970 and had 2,018,746 issuable shares of common stock to related parties on conversion of 1,478 shares of Series A preferred stock. Agreed to issue 5,902,589 shares as a preliminary settlement of approximately $6.3 million of convertible debt (See note 4). During the year ended December 31, 2020, the Company: Cancelled 2,000 shares of common stock valued at $500 previously issued to an investor under a securities purchase agreement and returned the $500 to the investor. Issued 7,005,855 shares of common stock on conversion of $127,524 of convertible notes, and accrued interest, at a fair value of the shares of $215,015, based on the quoted trading price on the conversion dates resulting in a loss on extinguishment of $87.491. Issued 5,736,333 shares of common stock and recorded the obligation to issue a further 506,667 common shares, collectively valued at $552,050 based on the quoted price on the grant dates, in payment for services primarily to music artists providing live performances for the July 24, 2020 launch of the Fan Pass app. Recorded the obligation to issue 36,193,098 and 63,275,243 additional shares of common stock based on the first and second reset dates in accordance with the debt restructuring agreement (See note 5). Issued 750,000 common shares to Integrity Media pursuant to the Company’s settlement agreement, which Integrity Media advised had a realized value of $16,625. Issued 7,196,264 common shares to parties where the original liability required the obligation to record such shares as issuable. Issued 54,076 common shares to the Company’s founder upon conversion of 3 Series A Preferred Shares to meet their personal commitment to transfer certain common shares to the investors. Recorded the obligation to issue 2,250,000 common shares in consideration for $ 60,000 received in cash. Issued 26,527,179 common shares upon conversion of Series C preferred stock having a value of $353,678. Preferred Stock: Series A: The Series A Preferred Stock was authorized in 2014 and is convertible into nine (9) times the number of common stock outstanding at time of conversion until the closing of a Qualified Financing (i.e. the sale and issuance of the Company’s equity securities that results in gross proceeds in excess of $2,500,000). The number of shares of common stock issued on conversion of Series A preferred stock is based on the ratio of the number of shares of Series A 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. After the qualified financing the conversion shares issuable shall be the original issue price of the Series A preferred stock divided by $0.002. The holders of Series A Preferred stock are entitled to receive non-cumulative dividends when and if declared at a rate of 6% per year. On all matters presented to the stockholders for action the holders of Series A Preferred stock shall be entitled to cast votes equal to the number of shares the holder would be entitled to if the Series A Preferred stock were converted at the date of record. During the year ended December 31, 2019, 588 shares of Series A preferred stock were converted to common stock by two related parties who donated them to the Diocese of Monterey. In addition, 890 Series A shares were converted into 2,018,746 common shares by parties related to the two directors. The 2,018,746 common shares were issuable as of December 31, 2019 and were subsequently issued during the six months ended June 30, 2020. During the year ended December 31, 2020 two directors converted 3 shares of Series A Preferred Stock into 54,076 shares of common stock. On June 3, 2020 the Company and Eclectic Artists LLC (“E Artists”) entered into a Partner Agreement and Stock Subscription Agreement, pursuant to which E Artists will engage musical artists and other talent to engage on the Company’s FanPass platform, providing live streaming events available through the FanPass mobile application for a term of 18 months. As compensation for bringing the artists to the FanPass platform, E Artists will receive 5% of net revenue attributable to the Fan Pass platform, initially for a period of 18 months. In addition, E Artists will receive Series A preferred stock such that when converted would be equal to 5% of the outstanding common stock. The number of Series A preferred shares was calculated at 118 shares valued at $135,617 based on the quoted trading price of the Company’s common stock of $0.0605 on the agreement date and 2,241,596 equivalent common shares. The Company recorded a prepaid expense of $135,617 and amortized $52,218 as sales and marketing expense as of December 31, 2020, with $83,399 remaining as prepaid expense. Concurrent with the issuance of the Series A Shares to E Artists, Robert Rositano, Jr., the Company’s CEO and Dean Rositano, the Company’s president, returned an aggregate of 118 Series A Preferred shares to the Company’s treasury. Series B: On August 8, 2019 the Company filed a Designation of Series B convertible Preferred Stock with the state of Nevada, designating 1,000,000 shares of the Series B Preferred Stock with a stated value of $1.00 per share. A holder of Series B Preferred Stock has the right to convert their Series B Preferred Stock into fully paid and non-assessable shares of Common Stock. Initially, the conversion price for the Series B Preferred Stock is $.25 per share, subject to standard anti-dilution adjustments. Additionally, each share of Series B Preferred Stock shall be entitled to, as a dividend, a pro rata portion of an amount equal to 10% (Ten Percent) of the Net Revenues (“Net Revenues” being Gross Sales minus Cost of Goods Sold) derived from the subscriptions and other sales, but excluding and net of Vimeo fees, processing fees and up sells, generated by Fan Pass Inc., the wholly-owned subsidiary of the Corporation. The Series B Dividend shall be calculated and paid on a monthly basis in arrears starting on the day 30 days following the first day of the month following the initial issuance of the Series B Preferred and continuing for a period of 60 (Sixty) months. The holders of Series B Preferred stock shall have no voting rights. The holders of Series B Preferred stock shall not be entitled to receive any dividends other than noted above. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company or deemed liquidation event, the holders of shares of Series B Preferred Stock shall be entitled to be paid the liquidation amount, as defined out of the assets of the Company available for distribution to its shareholders, after distributions to holders of the Series A Preferred Stock and before distributions to holders of Common Stock. During the year ended December 31, 2019, the Company entered into Security Purchase Agreements with various investors for the purchase of 205,000 shares Series B convertible Preferred stock and received $205,000 in cash. Each Series B Preferred share is convertible into 4 shares of common stock valued at $0.25. During the year ended December 31, 2019, the Company entered into a Security Purchase Agreements with a related party for the purchase of 79,000 shares Series B Preferred stock. The $79,000 was settled against accounts payable owed to the related party. Each Series B Preferred share is convertible into 4 shares of common stock valued at $0.25. Series C: On November 25, 2019 the Company filed a Designation of Series C convertible Preferred Stock with the state of Nevada, designating 1,000,000 shares of the Series C Preferred Stock with a stated value of $1.00 per share. The Series C Preferred Stock will, with respect to dividend rights and rights upon liquidation, winding-up or dissolution, rank: (a) senior with respect to dividends with the Company’s common stock, par value 0.0001 per share (“Common Stock”) (the Series C Preferred Stock will convert into common stock immediately upon liquidation and be pari passu with the common stock in the event of litigation), and (b) junior with respect to dividends and right of liquidation to all existing and future indebtedness of the Company. The Series C Preferred Stock does not have any voting rights. Each share of Series C Preferred Stock will carry an annual dividend in the amount of eight percent (8%) of the Stated Value of $1.00 (the “Divided Rate”), which shall be cumulative and compounded daily, payable solely upon redemption, liquidation or conversion and increase to 22% upon an event of default as defined. In the event of any default other than the Company’s failure to issue shares upon conversion, the stated price will be $1.50. In a default event where the Company fails to issue shares upon conversion, the stated price will $2.00. The holder shall have the right six months following the issuance date, to convert all or any part of the outstanding Series C Preferred Stock into shares of common stock of the Company. The conversion price shall equal the Variable Conversion Price. The “Variable Conversion Price” shall mean 71% multiplied by the market price, representing a discount rate of 29%. Market price means the average of the two lowest trading prices for the Company’s common stock during the twenty trading day period ending on the latest complete trading day prior to the conversion date. Upon any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, or upon any deemed liquidation event, after payment or provision for payment of debts and other liabilities of the Company, and after payment or provision for any liquidation preference payable to the holders of any Preferred Stock ranking senior upon liquidation to the Series C Preferred Stock, if any, but prior to any distribution or payment made to the holders of Common Stock or the holders of any Preferred Stock ranking junior upon liquidation to the Series C Preferred Stock by reason of their ownership thereof, the Holders will be entitled to be paid out of the assets of the Company available for distribution to its stockholders. The Company will have the right, at the Company’s option, to redeem all or any portion of the shares of Series C Preferred Stock, exercisable on not more than three trading days prior written notice to the Holders, in full, in accordance with Section 6 of the designations at a premium of up to 35% for up to six months. Company’s mandatory redemption: On the earlier to occur of (i) the date which is twenty-four (24) months following the Issuance Date and (ii) the occurrence of an Event of Default (the “Mandatory Redemption Date”), the Company shall redeem all of the shares of Series C Preferred Stock of the Holders (which have not been previously redeemed or converted). During the year ended December 31, 2019, 149,300 shares of Series C convertible preferred stock were issued to an investor under preferred stock purchase agreements at a price of approximately $0.91 per share for a total of $136,000. Due to the mandatory redemption feature, these shares are reflected as a current liability at December 31, 2019. Furthermore, because these shares are convertible at 71% of the common shares market price around the time of the conversion date, they are treated as a stock settled debt under ASC 480 with a premium of $55,549 recorded and charged to interest expense. The total amount is reflected at $191,549 at December 31, 2019. As of June 30, 2020, the Company has revalued the shares and premiums at the stated value of $1.50 per share in accordance with the events discussed below. On May 29, 2020 the Company defaulted on the shares by being late with the filing of the Form 10-K, thereby increasing the dividend rate to 22% and the stated value to $1.50 per share. During the three months ended March 31, 2020, 38,000 shares of Series C convertible preferred stock were issued to an investor under preferred stock purchase agreements at a price of approximately $0.87 per share for a total of $33,000. Because Series C preferred shares are convertible at 71% of the common shares market price around the time of the conversion date, they are treated as a stock settled debt under ASC 480 with a total premium of $114,755 recorded as of June 30, 2020. In addition, the Company recorded a cumulative dividend payable of $11,885 as of June 30, 2020 to the mandatorily redeemable Series C convertible preferred stock liability with this amount being recorded as interest expense since the Series C liability must be reflected at redemption value. During the three months ended September 30, 2020 the holder of the Series C converted 62,500 Series C shares to 3,822,958 common shares for a redemption value of $96,750 including accrued dividends plus premium of $38,292, which totaled $135,042 recorded into equity. During the three months ended December 31, 2020 the holder of the Series C converted 101,300 Series C shares to 22,704,221 common shares for a redemption value of $218,655 including accrued dividends, plus premium, recorded into equity. In addition, during the three months ended December 31,2020 a total of 149,600 shares of Series C convertible preferred stock were issued to two investors under preferred stock purchase agreements, at a price of approximately $0.91 per share, for a total of $136,000 cash and premiums totaling $60,302 were recorded during this period with respect to these issuances. At December 31, 2020 the remaining liability totals $285,605, represented by a remaining balance of $184,850 in redeemable Series C stock, together with the related premium of $74,701 and accrued dividends of $26,054. |
10. SHARE PURCHASE WARRANTS
10. SHARE PURCHASE WARRANTS | 12 Months Ended |
Dec. 31, 2020 | |
Warrants and Rights Note Disclosure [Abstract] | |
SHARE PURCHASE WARRANTS | Activity in 2020 and 2019 is as follows: Number of Warrants Weighted Average Weighted Average Balance, December 31, 2018 60,908 72.00 Balance, December 31, 2019 60,908 72.00 Balance, December 31, 2020 60,908 72.00 0 |
11. STOCK-BASED COMPENSATION
11. STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | On November 22, 2011, the Board of Directors of the Company approved a stock option plan (“2011 Stock Option Plan”), the purpose of which is to enhance the Company’s stockholder value and financial performance by attracting, retaining and motivating the Company’s officers, directors, key employees, consultants and its affiliates and to encourage stock ownership by such individuals by providing them with a means to acquire a proprietary interest in the Company’s success through stock ownership. Under the 2011 Stock Option Plan, officers, directors, employees and consultants who provide services to the Company may be granted options to acquire common shares of the Company. The aggregate number of options authorized by the plan shall not exceed 4,974 shares of common stock of the Company. The Board of Directors and the stockholders holding a majority of the voting power approved a 2014 Equity Incentive Plan (the “2014 Plan”) on February 28, 2014, with a to be determined effective date. The date never became effective. The purpose of the 2014 Plan is to assist the Company and its affiliates in attracting, retaining and providing incentives to employees, directors, consultants and independent contractors who serve the Company and its affiliates by offering them the opportunity to acquire or increase their proprietary interest in the Company and to promote the identification of their interests with those of the stockholders of the Company. The 2014 Plan will also be used to make grants to further reward and incentivize current employees and others. There are 7 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 Company’s 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, 2020, no options have been awarded under the 2014 Plan. Effective August 27, 2019, the Company effected a reverse split of the common stock of 1 for 18,000 (Note 1) which eliminated all the options which were previously outstanding. |
12. FAIR VALUE MEASUREMENTS
12. FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 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 instrument’s 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 is based on Level 1 inputs. The Company believes that the recorded values of accounts receivable and accounts payable approximate their current fair values because of their nature or respective relatively short durations. The fair value of the Company’s convertible debentures and promissory note approximates their carrying values as the underlying imputed interest rates approximates the estimated current market rate for similar instruments. As of December 31, 2020 there was a derivative measured at fair value on a recurring basis presented on the Company’s balance sheet, as follows: Liabilities at Fair Value December 31, 2020 Level 1 Level 2 Level 3 Total Derivative liability - - $ 1,320,000 $ 1,320,000 As of December 31, 2019 there was a derivative measured at fair value on a recurring basis presented on the Company’s balance sheet, as follows: Liabilities at Fair Value December 31, 2019 Level 1 Level 2 Level 3 Total Derivative liability - - $ 12,778,000 $ 12,778,000 |
13. INCOME TAXES
13. INCOME TAXES | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | A reconciliation of the difference between the income tax benefit computed at the federal statutory rate of 21%, and the provision for income taxes for the years ended December 31, 2020 and 2019 are as follows: 2020 2019 Computed tax benefit $ (866,327 ) $ (2,138,516 ) State taxes (152,872 ) (394,200 ) Permanent differences 495,841 1,887,855 Change in tax rate and other - 1,143,792 Change in valuation allowance 530,170 (498,931 ) $ - $ - The Company’s deferred tax assets and liabilities as of December 31, 2020 and 2019 were as follows: 2020 2019 Deferred Tax Assets: Net operating losses $ 3,636,082 $ 3,187,626 Accrued payroll 288,162 194,843 Reserve contingency 245,819 257,415 Unrealized loss on investment 186,533 186,533 4,356,596 3,826,417 Valuation Allowance (4,356,596 ) (3,826,417 ) $ - $ - The Company has net operating losses of $14,619,765$, of which $10,457,080 expires through 2037 and $4,162,685 may be carried forward indefinitely subject to annual usage limitations. The Company has established a 100% valuation allowance against its net deferred tax assets as it is more likely than not they will not be able to utilize such deferred assets in the future. The change in the valuation allowance for the year ended December 31, 2020 was an increase of $530,179 |
14. SUBSEQUENT EVENTS
14. SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | Subsequent to December 31, 2020, the Company issued 4 new convertible notes for Principal totaling $437,500and received net proceeds totaling $358,500, after deductions for the holders’ legal and due diligence fees of $ 29,000, Original Issue Discounts of $40,000 and a Finder’s Fee of $10,000, The Finder was also issued 3 year warrants on 1,000,000 common shares exercisable at $0.01 per share and on 350,000 common shares exercisable at $0.025 per share. The Company also issued 3,500,000 common shares (valued at $62,500 at time of issuance) to 1 of the convertible note holders in payment of the holder’s commitment fee, plus the issuance of 3 year warrants on 3,500,000 of the Company’s common stock at an exercise price of $0.025 per share. In addition, 2 of the convertible note holders were issued an aggregate of 60,000,000 5 year warrants exercisable at $0.005 per share and were granted a security interest in substantially all of the Company’s assets. Subsequent to December 31,2020 the Company issued 1 new 8% convertible note, maturing July 1,2021, for Principal of $9,200 in settlement of a financing fee. At any time prior to maturity the note is convertible to the Company’s common shares at the lower of (a) $0.10 per share or (b) at a discount of 40% from the average of the lowest 2 closing prices in the 10 trading days prior to conversion. . Subsequent to December 31, 2020 the Company raised $255,000 by issuing 296,450 shares of Series C preferred stock, net of legal and due diligence fees totaling $ 14,350 deducted by the purchasers. Subsequent to December 31, 2020 the Company issued 5,500,894 common shares on the conversion of 23,500 shares of Series C preferred stock including the payment of Series C preferred dividends totaling $940. Subsequent to December 31, 2020 the Company issued 31,532,405 common shares on conversion of convertible notes , at contractual rates,on Principal of $158,516, accrued interest of $ 627 and payment of holder’s legal and due diligence fees of $8,600, representing an overall average conversion rate of approximately $0.00532. Subsequent to December 31, 2020 the Company issued 49,766,310 common shares to the holders of convertible debentures, which were recorded as reclassifications from issuable to issued common shares. Subsequent to December 31, 2020, on March 29, 2021 the Company received Notice of Qualification from the Securities and Exchange Commission indicating approval for the Company to proceed to raise financing of up to $5 million through an offering of up to 500,000 Series Convertible Preferred Stock at the offering price of $10.00 per share, pursuant to Tier 2 of Regulation A of the Securities Act. On April 15, 2021 and April 23,2021 the Company executed 2 Stock Subscription Agreements , each for the sale of 15,000 Series D Preferred stock at the offering price of $10.00 per share, and received a total of $300,000 on April23, , 2021. A second Stock Subscription Agreement was also executed on April 15, 2021 for 25,000 Series D Preferred stock at the offering price of $10.00 per share, with the subscription payment of $250,000 being receivable at the date of this filing. Subsequent to December 31, 2020, the Company issued 15,000,000 common stock options at an exercise price of $0.014 to 5 of its employees, of which 5,000,000 vest quarterly through January 11, 2023 and 10,000,000 vest quarterly through January 11, 2024. The valuation of these stock options totaling pursuant to the requirements of Black Scholes was calculated to amount to $194,700, which shall be recognized as an expense $ 75,700 in 2021, $75,700 in 2022 and $43,300 in 2023. In addition, the Company issued 1,500,000 common stock options at an exercise price of $0.15 per share, vesting quarterly through January 29, 2023. The valuation of this stock option pursuant to the requirements of Black Scholes was calculated to amount to $24,750, which shall be recognized as an expense $11,344 in 2021, $12,375 in 2022 and $1,031 in 2023. |
2. SUMMARY OF SIGNIFICANT ACC_2
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | The consolidated financial statements include all the accounts of the Company and all of its wholly owned subsidiaries as of December 31, 2020 and 2019. All material intercompany accounts and transactions have been eliminated in the accompanying consolidated financial statements. The Company’s fiscal year end is December 31. |
Use of Estimates | The preparation of these 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 financial statements and the reported amounts of revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to valuation of convertible debenture conversion options, derivative instruments, 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 Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. |
Revenue Recognition | In accordance with ASC 606, revenue is recognized when the following criteria have been met; valid contracts are identified with specific customers, performance obligations have been identified, price is determinable, price is allocated to performance obligations, and the Company has satisfied the performance obligations. Revenue generally is recognized net of allowances for returns and any taxes collected from customers and subsequently remitted to governmental authorities. During the years ended December 31, 2020 and December 31, 2019, the Company derived revenues primarily from the development of apps for a third party of $ 397,333 and $ 239,477 respectively, and such revenues were recognized upon completion of services. Secondarily, the Company’s other revenues from subscription fees and merchandising sales from the Friendable and Fan Pass apps totaled $ 4,572 for the year ended December 31, 2020 (2019:$3,225) and were recognized when received. Pursuant to various agreements between Fan Pass, Inc. and music artists, managers, talent agencies, partners and/or record labels and certain round one investors (collectively, “Revenue Share Participants”) such individuals and/or entities are eligible to receive a share of net proceeds derived by the Company from subscription receipts from the Fan Pass app and from merchandise sales. The Company has established an “Artist Pool” equal to 40% of net Fan Pass “Fan Subscriptions” received, in which the “pool” is paid out to individual artists based on fan activity or “Content Views” within an artist’s channel on the Fan Pass app. Additionally, a standard 50% of net merchandise sales (created by Fan Pass for each artist) received or sold by each artist is shared with each artist. In some instances, the Company may adjust the sharing percentage for special situation artists or “Mega Stars” who may command a different merchandise split. Certain investors, along with Series B Preferred stockholders and the holder of a promissory note, , are entitled to proportionately participate in an “Investor Pool” equal to approximately 8% of net subscription and net merchandising sales receipts. In addition, as compensation for bringing music artists to perform for the initial Fan Pass app launch, Eclectic Artists is eligible receive 5% of Fan Pass net revenue. Net revenue is defined as gross receipts, minus source commissions and other cost of goods sold as defined in the agreements, including deduction for the cost of merchandise, hosting, streaming and other platform and processing fees. During the year ended December 31, 2020 the Company incurred a revenue sharing expense of $660, and had a liability of $647 at December 31, 2020 which is included in accounts payable and accrued expenses. |
Advertising Costs | The Company’s policy regarding advertising is to expense advertising when incurred. During the year ended December 31, 2020, the Company incurred $108,776 (December 31, 2019: $48,375) 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 | The Company accounts for intangible assets in accordance with ASC 350, Intangibles – Goodwill and Other. The Company assesses potential impairments to intangible assets when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered. Intangible assets with finite lives are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of intangible assets with finite lives is measured by comparing the carrying amount of the asset to its fair value. If the future value of the asset is lower than its carrying value, the Company recognizes an impairment loss for the amount by which the carrying value of the asset exceeds the related estimated fair value. Intangible assets with indefinite lives are tested for impairment annually or more frequently are tested for impairment annually or more frequently if events or changes in circumstances indicate that it is more likely than not that the intangible asset is impaired. |
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 |
Derivative liabilities | The Company had a financial instrument associated with a debt restructuring agreement and also has convertible notes with embedded conversion option derivatives. The Company evaluates all its financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 815-10 – Derivative and Hedging – Contract in Entity’s OwEquity In July 2017, FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features. These amendments simplify the accounting for certain financial instruments with down-round features. The amendments require companies to disregard the down-round feature when assessing whether the instrument is indexed to its own stock, for purposes of determining liability or equity classification. The guidance was adopted as of January 1, 2019 and the adoption did not have any impact on its consolidated financial statement and there was no cumulative effect adjustment. |
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. In 2019 the Company adopted ASU 2018-07 which expands the measurement requirements to non-employees. 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 Company’s stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to the Company’s 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 statement of operations over the requisite service period. 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. |
Accounts Receivable and Allowance for Doubtful Accounts | The Company monitors its outstanding receivables for timely payments and potential collection issues. At December 31, 2020 and 2019, the Company did not have any allowance for doubtful accounts. |
Financial Instruments | Financial assets and financial liabilities are recognized in the balance sheet when the Company has become party to the contractual provisions of the instruments. The Company’s financial instruments consist of accounts receivable, accounts payable, convertible debentures, liability to be settled with common stock, derivatives, mandatorily redeemable Series C Preferred stock and promissory notes. 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 Company’s financial instruments recorded at fair value in the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. |
Concentrations | The Company has Substantial Client Concentration, with one Client Accounting for a Substantial Portion of our Revenues. In the year ended December 31, 2020 we derived 98.9% (2019: 98.7%) of our revenue from one client. There are inherent risks whenever a large percentage of total revenues are concentrated with a limited number of clients. It is not possible for us to predict the future level of demand for our services that will be generated by this client or the future demand for the products and services of other similar clients. A loss of this client or the failure to retain similar clients could negatively affect our revenues and results of operations and/or trading price of our common stock. At December 31, 2020 the Company had an accounts receivable of $12,500, all due from that one main client. |
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 statement of operations. 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 December 31, 2020, there were approximately 1,466,768,887 potentially dilutive shares outstanding. Potential dilutive shares: 60,908 Warrants outstanding 47,107,032 Common shares issuable upon conversion of convertible debt 1,396,916,100 Total shares issuable upon conversion of Preferred Series A shares 1,136,000 Total shares issuable upon conversion of Preferred Series B shares 22,468,847 Total shares issuable upon conversion of Preferred Series C shares 1,466,768,887 As of December 31, 2019, there were approximately 122,051,838 potentially dilutive shares outstanding. Potential dilutive shares: 60,908 Warrants outstanding 2,212,523 Common shares issuable upon conversion of convertible debt 116,248,041 Total shares issuable upon conversion of Preferred Series A shares 1,136,000 Total shares issuable upon conversion of Preferred Series B shares 2,394,366 Total shares issuable upon conversion of Preferred Series C shares 122,051,838 |
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. |
Reclassifications | Accrued interest of $ 51,980 was reclassified from convertible debentures and convertible promissory notes to accounts payable and accrued expenses at December 31, 2019 to conform to the December 31, 2020 presentation. |
Recent Accounting Pronouncements | In February 2016, the FASB issued ASU No. 2016-02, Leases (ASC Topic 842) (“ASU 2016-02”), which requires lessees to recognize at the commencement date for all leases, with the exception of short-term leases, (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The ASU requires adoption using a modified retrospective transition approach with either (a) periods prior to the adoption date being recast or (b) a cumulative-effect adjustment recognized to the opening balance of retained earnings on the adoption date with prior periods not recast. As of December 31, 2020 the Company has no lease obligations. |
2. SUMMARY OF SIGNIFICANT ACC_3
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Potentially dilutive securities | 60,908 Warrants outstanding 47,107,032 Common shares issuable upon conversion of convertible debt 1,396,916,100 Total shares issuable upon conversion of Preferred Series A shares 1,136,000 Total shares issuable upon conversion of Preferred Series B shares 22,468,847 Total shares issuable upon conversion of Preferred Series C shares 1,466,768,887 As of December 31, 2019, there were approximately 122,051,838 potentially dilutive shares outstanding. Potential dilutive shares: 60,908 Warrants outstanding 2,212,523 Common shares issuable upon conversion of convertible debt 116,248,041 Total shares issuable upon conversion of Preferred Series A shares 1,136,000 Total shares issuable upon conversion of Preferred Series B shares 2,394,366 Total shares issuable upon conversion of Preferred Series C shares 122,051,838 |
5. CONVERTIBLE DEBENTURES (Tabl
5. CONVERTIBLE DEBENTURES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Assumptions | November December June 5, 2019 31, 2019 30, 2020 Volatility 617% 738.1% 293.6% Risk Free Rate 1.59% 1.6% .13% Expected Term 0.66 0.5 0.01 |
Derivative liability activity | Balance, December 31, 2018 $ - Reset provision 12,653,000 Change in fair value 125,000 Balance, December 31, 2019 $ 12,778,000 Balance, Derivative Liability at December 31, 2019 $ 12,778,000 Record obligation to issue additional shares (13,474,821 ) Loss on settlement of derivative 640,821 Loss on change in fair value of derivative 56,000 Balance, Reset provision derivative liability at December 31, 2020 $ - |
6. CONVERTIBLE PROMISSORY NOTES
6. CONVERTIBLE PROMISSORY NOTES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Summary of convertible promissory notes | Issuance: Principal Accrued Principal and Date Outstanding Interest Accrued Interest J.P. Carey Inc. March 30, 2017 - $ 20,029 $ 20,029 J.P. Carey Inc May 20, 2020 $ 60,000 8,996 68,996 J.P. Carey Inc June 11, 2020 10,000 - 10,000 Green Coast Capital International April 6, 2020 10,755 848 11,603 Ellis International LP October 13, 2020 100,000 2,190 102,190 Trillium Partners LP December 3, 2020 21,436 258 21,694 Trillium Partners LP December 8, 2020 27,500 145 27,645 Total $ 229,691 $ 32,466 $ 262,157 Less: Discount (85,734 ) Net carrying value December 31, 2020 $ 143,957 The derivative fair value of the above at December 31, 2020 is $1,320,000. The following is a summary of Convertible Promissory Notes at December 31, 2020: Issuance: Principal Accrued Principal and Date Outstanding Interest Accrued Interest J.P. Carey Inc. March 30, 2017 $ 65,930 $ 51,980 $ 117,910 World Market Ventures Assigned from above 4,000 - 4,000 Carrying value December 31, 2019 $ 69,930 $ 51,980 $ 121,910 |
Assumptions | Volatility 329% – 610% Risk Free Rate 0.09%- 0.65% Expected Term 0.25 – 1.781 |
Embedded conversion options derivative liability activity | Balance, December 31, 2019 $ - Initial derivative liabilities charged to operations 1,106,500 Initial derivative liabilities recorded as debt discount 201,500 Change in fair value loss 12,000 Balance, December 31, 2020 $ 1,320,000 |
10. SHARE PURCHASE WARRANTS (Ta
10. SHARE PURCHASE WARRANTS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Warrants and Rights Note Disclosure [Abstract] | |
Share purchase warrants | Number of Warrants Weighted Average Weighted Average Balance, December 31, 2018 60,908 72.00 Balance, December 31, 2019 60,908 72.00 Balance, December 31, 2020 60,908 72.00 0 |
12. FAIR VALUE MEASUREMENTS (Ta
12. FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Derivative measured at fair value | Liabilities at Fair Value December 31, 2020 Level 1 Level 2 Level 3 Total Derivative liability - - $ 1,320,000 $ 1,320,000 Liabilities at Fair Value December 31, 2019 Level 1 Level 2 Level 3 Total Derivative liability - - $ 12,778,000 $ 12,778,000 |
13. INCOME TAXES (Tables)
13. INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Rate reconciliation | 2020 2019 Computed tax benefit $ (866,327 ) $ (2,138,516 ) State taxes (152,872 ) (394,200 ) Permanent differences 495,841 1,887,855 Change in tax rate and other - 1,143,792 Change in valuation allowance 530,170 (498,931 ) $ - $ - |
Deferred tax assets | 2020 2019 Deferred Tax Assets: Net operating losses $ 3,636,082 $ 3,187,626 Accrued payroll 288,162 194,843 Reserve contingency 245,819 257,415 Unrealized loss on investment 186,533 186,533 4,356,596 3,826,417 Valuation Allowance (4,356,596 ) (3,826,417 ) $ - $ - |
1. NATURE OF BUSINESS AND GOI_2
1. NATURE OF BUSINESS AND GOING CONCERN (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Working capital deficiency | $ (5,288,362) | ||
Accumulated deficit | (36,569,246) | $ (32,443,883) | |
Total stockholders' deficit | (5,288,362) | (15,970,305) | $ (10,237,897) |
Net loss | (4,125,363) | (10,183,410) | |
Net cash used in operating activities | $ (492,080) | $ (488,864) |
2. SIGNIFICANT ACCOUNTING POLIC
2. SIGNIFICANT ACCOUNTING POLICIES (Details) - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Potentially dilutive shares outstanding | 1,466,768,887 | 122,051,838 |
Warrants Outstanding | ||
Potentially dilutive shares outstanding | 60,908 | 60,908 |
Common Shares Issuable Upon Conversion of Convertible Debt | ||
Potentially dilutive shares outstanding | 47,107,032 | 2,212,523 |
Preferred Series A Shares | ||
Potentially dilutive shares outstanding | 1,396,916,100 | 116,248,041 |
Preferred Series B Shares | ||
Potentially dilutive shares outstanding | 1,136,000 | 1,136,000 |
Preferred Series C Shares | ||
Potentially dilutive shares outstanding | 22,468,847 | 2,394,366 |
2. SUMMARY OF SIGNIFICANT ACC_4
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Advertising costs | $ 108,776 | $ 48,375 |
Allowance for doubtful accounts | $ 0 | $ 0 |
Potentially dilutive shares outstanding | 1,466,768,887 | 122,051,838 |
4. RELATED PARTY TRANSACTIONS_2
4. RELATED PARTY TRANSACTIONS AND BALANCES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
App hosting | $ 47,500 | $ 24,068 |
App development | 613,105 | 299,124 |
Stock subscription receivable | 4,500 | 4,500 |
Officers and Directors | ||
Salaries payable | 418,333 | 459,200 |
Company With Two Officers and Directors in Common | ||
App hosting | 47,500 | 24,068 |
App development | 485,037 | 299,124 |
Rent | 60,000 | 58,883 |
Series B preferred stock purchase | 79,000 | |
Related party accounts payable | $ 190,320 | $ 30,083 |
5. CONVERTIBLE DEBENTURES (Deta
5. CONVERTIBLE DEBENTURES (Details) | 12 Months Ended | ||
Jun. 30, 2020 | Dec. 31, 2019 | Nov. 05, 2019 | |
Debt Disclosure [Abstract] | |||
Volatility | 293.60% | 738.10% | 617.00% |
Risk free rate | 0.13% | 1.60% | 1.59% |
Expected term | 4 days | 6 months | 7 months 28 days |
5. CONVERTIBLE DEBENTURES (De_2
5. CONVERTIBLE DEBENTURES (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | ||
Derivative liability, beginning | $ 12,778,000 | $ 0 |
Reset provision | 0 | 12,653,000 |
Record obligation to issue additional shares | (13,474,821) | 0 |
Loss on settlement of derivative | 640,821 | |
Change in fair value | 68,000 | 125,000 |
Derivative liability, ending | 1,320,000 | 12,778,000 |
Derivative liability, reset provision ending | $ 0 | $ 0 |
6. CONVERTIBLE PROMISSORY NOTE
6. CONVERTIBLE PROMISSORY NOTE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Principal outstanding | $ 229,691 | $ 69,930 |
Accrued interest | 32,466 | 51,980 |
Principal and accrued interest | 262,157 | $ 121,910 |
Less: discount | (85,734) | |
Net carrying value | $ 143,957 | |
J.P. Carey Inc. | ||
Issuance date | Mar. 30, 2017 | Mar. 30, 2017 |
Principal outstanding | $ 0 | $ 65,930 |
Accrued interest | 20,029 | 51,980 |
Principal and accrued interest | $ 20,029 | 117,910 |
J.P. Carey Inc. | ||
Issuance date | May 20, 2020 | |
Principal outstanding | $ 60,000 | |
Accrued interest | 8,996 | |
Principal and accrued interest | $ 68,996 | |
J.P. Carey Inc. | ||
Issuance date | Jun. 11, 2020 | |
Principal outstanding | $ 10,000 | |
Accrued interest | 0 | |
Principal and accrued interest | $ 10,000 | |
Green Coast Capital International | ||
Issuance date | Apr. 6, 2020 | |
Principal outstanding | $ 10,755 | |
Accrued interest | 848 | |
Principal and accrued interest | $ 11,603 | |
Ellis International LP | ||
Issuance date | Oct. 13, 2020 | |
Principal outstanding | $ 100,000 | |
Accrued interest | 2,190 | |
Principal and accrued interest | $ 102,190 | |
Trillium Partners LP | ||
Issuance date | Dec. 3, 2020 | |
Principal outstanding | $ 21,436 | |
Accrued interest | 258 | |
Principal and accrued interest | $ 21,694 | |
Trillium Partners LP | ||
Issuance date | Dec. 8, 2020 | |
Principal outstanding | $ 27,500 | |
Accrued interest | 145 | |
Principal and accrued interest | $ 27,645 | |
World Market Ventures | ||
Principal outstanding | 4,000 | |
Accrued interest | 0 | |
Principal and accrued interest | $ 4,000 |
6. CONVERTIBLE PROMISSORY NOT_2
6. CONVERTIBLE PROMISSORY NOTE (Details 1) - Embedded Conversion Options Derivative Liability | 12 Months Ended |
Dec. 31, 2020 | |
Minimum | |
Volatility | 329.00% |
Risk free rate | 0.09% |
Expected term | 3 months |
Maximum | |
Volatility | 610.00% |
Risk free rate | 0.65% |
Expected term | 1 year 9 months 11 days |
6. CONVERTIBLE PROMISSORY NOT_3
6. CONVERTIBLE PROMISSORY NOTE (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Derivative liability, beginning | $ 12,778,000 | $ 0 |
Change in fair value expense (income) | (68,000) | (125,000) |
Derivative liability, ending | 1,320,000 | 12,778,000 |
Embedded Conversion Options Derivative Liability | ||
Derivative liability, beginning | 0 | |
Initial derivative liabilities charged to operations | 1,106,500 | |
Initial derivative liabilities recorded as debt discount | 201,500 | |
Change in fair value expense (income) | 12,000 | |
Derivative liability, ending | $ 1,320,000 | $ 0 |
8. COMMITMENTS AND CONTINGENC_2
8. COMMITMENTS AND CONTINGENCIES (Details Narrative) | Dec. 31, 2020USD ($) | |
Employment Agreements | ||
Contractual obligations | $ 300,000 | [1] |
Lawsuit Contingency | ||
Contractual obligations | $ 988,375 | [2] |
[1] | On April 3, 2019, the Company entered into employment agreements with three officers. Pursuant to the agreements, the Company shall pay officers an aggregate annual salary amount of $400,000. Upon a successful launch of the Companys Fan Pass mobile app or website, and the Company achieving various levels of subscribers, the officers are eligible to receive additional bonuses and salary increases. With mutual agreement with the Company, effective August 31, 2020 one of the officers chose early termination of his employment, which reduced the annual commitment for the remaining officers to $300,000. | |
[2] | Integrity Media, Inc. (Integrity) had previously filed a lawsuit against the Company and the CEO of the Company for $500,000 alleging breach of contract alleging the Company failed to deliver marketable securities in exchange for services. The Company answered the allegations in court and Integrity filed a motion attacking the Companys answers. While the court did not strike those responses, the clerk of the court entered a default judgment against the Company in the amount of $1,192,875 plus 10% interest. On May 8, 2019, the Company received a tentative ruling on the Companys motion to vacate the default judgement whereby the previously entered default judgement was voided and a trial date of August 26, 2019 was set. |
9. COMMON AND PREFERRED STOCK (
9. COMMON AND PREFERRED STOCK (Details Narrative) | 12 Months Ended |
Dec. 31, 2019shares | |
Two Convertible Note Holders | |
Stock issued | 393,418 |
Consultant | |
Stock issued | 600,000 |
Promissory Note Settlement | |
Stock issued | 2,150,000 |
10. SHARE PURCHASE WARRANTS (De
10. SHARE PURCHASE WARRANTS (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Warrants and Rights Note Disclosure [Abstract] | |||
Number of warrants outstanding | 60,908 | 60,908 | 60,908 |
Weighted average exercise price outstanding | $ 72 | $ 72 | $ 72 |
Weighted-average remaining life | 0 years |
12. FAIR VALUE MEASUREMENTS (De
12. FAIR VALUE MEASUREMENTS (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Derivative Liability | $ 1,320,000 | $ 12,778,000 | $ 0 |
Level 1 | |||
Derivative Liability | 0 | 0 | |
Level 2 | |||
Derivative Liability | 0 | 0 | |
Level 3 | |||
Derivative Liability | $ 1,320,000 | $ 12,778,000 |
13. INCOME TAXES (Details)
13. INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Computed tax benefit | $ (866,327) | $ (2,138,516) |
State taxes | (152,872) | (394,200) |
Permanent differences | 495,841 | 1,887,855 |
Change in tax rate and other | 0 | 1,143,792 |
Change in valuation allowance | 530,170 | (498,931) |
Reported income taxes | $ 0 | $ 0 |
13. INCOME TAXES (Details 1)
13. INCOME TAXES (Details 1) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred Tax Assets: | ||
Net operating losses | $ 3,636,082 | $ 3,187,626 |
Accrued payroll | 288,162 | 194,843 |
Reserve contingency | 245,819 | 257,415 |
Unrealized loss on investment | 186,533 | 186,533 |
Deferred tax assets, gross | 4,356,596 | 3,826,417 |
Valuation allowance | (4,356,596) | (3,826,417) |
Deferred tax assets, net | $ 0 | $ 0 |
13. INCOME TAXES (Details Narra
13. INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforward | $ 14,619,765 | |
Net operating loss carryforward expiration | Jan. 1, 2037 | |
Change in valuation allowance | $ (530,170) | $ 498,931 |