Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 15, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | Pulse Beverage Corp | |
Entity Central Index Key | 1,420,569 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 633,600,734 | |
Trading Symbol | PLSB | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash | $ 25,793 | $ 159,660 |
Accounts receivable, net (Note 3) | 262,573 | 146,324 |
Inventories (Note 4) | 671,075 | 781,468 |
Prepaid expenses | 11,800 | 21,585 |
Total Current Assets | 971,241 | 1,109,038 |
Property and equipment, net of accumulated depreciation of $356,310 and $310,604, respectively (Note 5) | 105,530 | 151,235 |
Intangible assets, net of accumulated amortization of $62,675 and $61,927, respectively (Note 5) | 85,891 | 86,640 |
Total Assets | 1,162,662 | 1,346,913 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 693,809 | 816,974 |
Credit card indebtedness | 23,686 | 21,057 |
Promissory notes payable (Note 6) | 19,314 | 71,587 |
Loans payable (Note 7) | 1,584,522 | 1,792,384 |
Convertible debentures (net of discounts of 364,617 and 78,725 respectively) (Note 8) | 164,670 | 2,025 |
Derivative Liabilities (Note 9) | 697,063 | 93,206 |
Total Current Liabilities | 3,183,064 | 2,797,233 |
Stockholders’ Equity (Deficit) | ||
Preferred stock, 1,000,000 shares authorized, $0.001 par value, 300,000 Series “A” preferred shares issued (Note 12) | 300 | 100 |
Common stock, 5,000,000,000 shares authorized (See Note 10), $0.00001 par value 365,597,927 and 70,924,980 issued and outstanding, respectively | 3,656 | 709 |
Additional paid-in capital | 17,213,599 | 15,243,587 |
Deficit | (19,237,957) | (16,694,716) |
Total Stockholders’ Equity (Deficit) | (2,020,402) | (1,450,320) |
Total Liabilities and Stockholders’ Equity | $ 1,162,662 | $ 1,346,913 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Property and equipment, accumulated depreciation | $ 356,310 | $ 310,604 |
Intangible assets, accumulated amortization | 62,675 | 61,927 |
Convertible debentures, discounts | $ 364,617 | $ 78,725 |
Series A preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Series A preferred stock, par value | $ 0.001 | $ 0.001 |
Series A preferred stock, shares issued | 300,000 | 100,000 |
Common stock, shares authorized | 5,000,000,000 | 5,000,000,000 |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares issued | 365,597,927 | 70,924,980 |
Common stock, shares outstanding | 365,597,927 | 70,924,980 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement [Abstract] | ||||
Gross Sales | $ 428,264 | $ 1,003,780 | $ 796,706 | $ 1,741,195 |
Less: Promotional Allowances and Slotting Fees | (23,511) | (50,415) | (49,064) | (98,187) |
Net Sales | 404,753 | 953,365 | 747,642 | 1,643,008 |
Cost of Sales | 330,122 | 612,653 | 571,476 | 1,076,235 |
Gross Profit | 74,631 | 340,712 | 176,166 | 566,773 |
Expenses | ||||
Advertising, samples and displays | 7,975 | 16,912 | 24,845 | 37,242 |
Asset impairment | 3,183 | 8,268 | ||
Freight-out | 68,700 | 101,853 | 96,671 | 159,253 |
General and administration | 284,421 | 282,962 | 515,829 | 511,338 |
Salaries and benefits and broker/agent’s fees | 136,949 | 221,634 | 278,343 | 502,854 |
Stock-based compensation | 3,939 | |||
Total Operating Expenses | 498,045 | 626,544 | 915,688 | 1,222,894 |
Net Operating Loss | (423,414) | (285,832) | (739,522) | (656,121) |
Other Income (Expense) | ||||
Interest expense | (99,257) | (212,980) | (181,761) | (323,320) |
Accretion of discount on convertible debentures | (381,748) | (719,744) | ||
Change in fair value of derivatives | (307,845) | (902,214) | ||
Total Other Income (Expense) | (788,850) | (212,980) | (1,803,719) | (323,320) |
Net Loss from Continuing Operations | (1,212,264) | (498,812) | (2,543,241) | (979,441) |
Loss from Discontinued Operations | (77,455) | (154,098) | ||
Net Loss | $ (1,212,264) | $ (576,267) | $ (2,543,241) | $ (1,133,539) |
Net Loss per Share from Continuing Operations – Basic and Diluted | $ (0.01) | $ (0.01) | $ (0.01) | $ (0.02) |
Net Loss per Share from Discontinued Operations – Basic and Diluted | ||||
Net Loss per Share – Basic and Diluted | $ (0.01) | $ (0.01) | $ (0.01) | $ (0.02) |
Weighted Average Shares Outstanding – Basic and Diluted | 268,833,000 | 69,915,000 | 183,066,000 | 69,301,000 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash Flow from Operating Activities | ||
Net loss | $ (2,543,241) | $ (1,133,539) |
Adjustments to reconcile net loss to net cash used in operations: | ||
Amortization and depreciation | 46,454 | 58,608 |
Asset impairment | 8,268 | |
Bad debt allowance | 10,616 | 40,000 |
Interest and expenses paid through a debt swap | 89,930 | |
Default interest added to convertible notes | 71,750 | |
Change in fair value of derivative liability | 902,214 | |
Accretion of discount on convertible debenture | 719,744 | |
Amortization of deferred financing fees | 12,547 | 250,933 |
Shares and options issued for services | 11,700 | 81,373 |
Changes in operating assets and liabilities: | ||
Increase in accounts receivable | (126,866) | (341,735) |
Decrease (increase) in prepaid expenses | 9,785 | (4,118) |
Decrease in inventories | 110,393 | 82,897 |
Increase in accounts payable and accrued expenses | 132,203 | 260,743 |
Net Cash Used in Operating Activities | (552,771) | (696,570) |
Cash Flow to Investing Activities | ||
Purchase of property and equipment | (17,125) | |
Acquisition of intangible assets | (5,422) | |
Net Cash Used in Investing Activities | (22,547) | |
Cash Flow from Financing Activities | ||
Proceeds from sale of preferred shares | 800 | |
Proceeds from loans | 134,500 | 763,360 |
Repayment of loans payable | (70,124) | (145,064) |
Proceeds from convertible notes | 406,000 | |
Repayment of promissory notes | (52,273) | |
Net Cash Provided by Financing Activities | 418,903 | 618,296 |
(Decrease) in Cash | (133,868) | (100,821) |
Cash – Beginning | 159,660 | 431,270 |
Cash - Ending | 25,793 | 330,449 |
Non-Cash Financing and Investing Activities: | ||
Shares issued for services | 11,700 | 37,500 |
Shares issued to settle debt | 2,000 | 100,000 |
Shares issued upon conversion of convertible debt | 659,652 | |
Supplemental Disclosures: | ||
Interest paid | 25,255 | 65,470 |
Income taxes paid |
Nature of Operations
Nature of Operations | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | 1. Nature of Operations Organizational history Darlington Mines Ltd. (“Darlington”) was incorporated in the State of Nevada on August 23, 2006. On February 15, 2011 Darlington Mines Ltd. closed a voluntary share exchange transaction with a private Colorado company, The Pulse Beverage Corporation, which was formed on March 17, 2010, by and among us, The Pulse Beverage Corporation and the stockholders of The Pulse Beverage Corporation. The Pulse Beverage Corporation became a wholly-owned subsidiary. On February 16, 2011 Darlington’s name was changed to “The Pulse Beverage Corporation”. Nature of business We manufacture and distribute Natural Cabana® Lemonade, Limeade and Coconut Water. Our product line, PULSE® Heart & Body Health functional beverage has been discontinued in the short-term. Our products are distributed nationwide primarily through a series of distribution agreements with various independent local and regional distributors and on a warehouse direct basis with major retail chain stores. Going concern The accompanying unaudited condensed consolidated interim financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities, and commitments in the normal course of business. We have generated significant revenues but have sustained substantial losses since inception and have never paid any dividends and are unlikely to pay dividends in the immediate or foreseeable future. Our continuation as a going concern is dependent upon our ability to obtain necessary debt and/or equity financing to fund our growth strategy, pay debt when due, to continue operations, and to attain profitability. As at June 30, 2017 we had a working capital deficit of $2,211,823, cumulative losses of $19,237,957 and a stockholders’ deficit of $2,020,402. All of these factors combined raises substantial doubt regarding our ability to continue as a going concern within one year after the date that the consolidated financial statements are issued. These 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 we be unable to continue as a going concern. Since our inception through June 30, 2017, we have obtained funds primarily from the issuance of common stock and debt. Management believes this funding will continue, and is continually seeking new investors. Management believes the existing shareholders and lenders and prospective new investors will provide the additional cash needed to meet our obligations as they become due, and will allow the development of our core business. We intend to continually monitor and adjust our business plan as necessary to respond to developments in our business, our markets and the broader economy. We believe our debt and equity financing alternatives will be made available to us to support our working capital needs in the future. These alternatives may require significant cash payments for interest and other costs or could be highly dilutive to our existing shareholders. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of presentation The unaudited condensed consolidated interim financial statements for the three months and six months ended June 30, 2017 and 2016 have been prepared in accordance with accounting principles generally accepted in the United States. Our fiscal year end is December 31st. The foregoing unaudited condensed consolidated interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information using the instructions for Form 10-Q and Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, these condensed consolidated financial statements do not include all of the disclosures required by generally accepted accounting principles in the United States of America for complete financial statements. These unaudited interim condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto included on Form 10-K for the year ended December 31, 2016. In our opinion, the unaudited condensed consolidated interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim periods presented. Operating results for the three months and six months ended June 30, 2017, are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. Use of Estimates The preparation of financial statements in accordance with United States generally accepted accounting principles requires us 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. We regularly evaluate estimates and assumptions related to the useful life and recoverability of long-lived assets, stock-based compensation, and deferred income tax asset valuation allowances. We base our estimates and assumptions on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments as to 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 us may differ materially and adversely from our estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. Revenue Recognition Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable and collectability is reasonably assured. Ownership and title of our products pass to customers upon delivery of the products to customers. Certain of our distributors may also perform a separate function as a co-packer on our behalf. In such cases, ownership of and title to our products that are co-packed on our behalf by those co-packers who are also distributors, passes to such distributors when we are notified by them that they have taken transfer or possession of the relevant portion of our finished goods. Net sales have been determined after deduction of discounts, slotting fees and other promotional allowances in accordance with ASC 605-50. All sales to distributors and customers are final; however, in limited instances, due to product quality issues or distributor terminations, we may accept returned product. To date, such returns have been de minimis. Reclassification of Prior Period Certain prior-period amounts have been reclassified to conform to the current-period presentation. These reclassifications had no impact on reported net loss, total assets or liabilities. Seasonality Our sales are seasonal and we experience fluctuations in quarterly results as a result of many factors. Historically, we have generated a higher percentage of our revenues during the warm weather months of April through September. Timing of customer purchases will vary each year and sales can be expected to shift from one quarter to another. As a result, we believe that period-to-period comparisons of results of operations are not necessarily meaningful and should not be relied upon as any indication of future performance or results expected for the entire fiscal year. Recent Pronouncements We continually assess any new accounting pronouncements to determine their applicability to our operations and financial reporting. Where it is determined that a new accounting pronouncement affects our financial reporting, we undertake a study to determine the consequence of the change to our financial statements and assure that there are proper controls in place to ascertain that our financial statements properly reflect the change. In April 2015, the FASB issued ASU 2015-05, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement,” which provides guidance about whether a cloud computing arrangement includes a software license. It also provides guidance related to a customer’s accounting for fees paid in a cloud computing arrangement. This standard provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. This guidance is effective for interim and annual reporting periods beginning after December 15, 2015, and early adoption is permitted. We adopted this guidance on January 1, 2016. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows. In May 2015, the FASB issued ASU 2015-07, “Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent),” which removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. Further, the amendments remove the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. This ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015, and early adoption is permitted. The new guidance should be applied on a retrospective basis to all periods presented. We adopted this guidance on January 1, 2016. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows. In September 2015, the FASB issued ASU 2015-16, “Simplifying the Accounting for Measurement –Period Adjustments.” Changes to the accounting for measurement-period adjustments relate to business combinations. Currently, an acquiring entity is required to retrospectively adjust the balance sheet amounts of the acquired business recognized at the acquisition date with a corresponding adjustment to goodwill as a result of changes made to the balance sheet amounts of the acquired business. The measurement period is the period after the acquisition date during which the acquirer may adjust the balance sheet amounts recognized for a business combination (generally up to one year from the date of acquisition). The changes eliminate the requirement to make such retrospective adjustments, and, instead require the acquiring entity to record these adjustments in the reporting period they are determined. The new standard is effective for both public and private companies for periods beginning after December 15, 2015. We adopted this guidance in the first quarter 2016. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows. In July 2015, the FASB issued ASU 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory,” which applies to inventory that is measured using first-in, first-out (“FIFO”) or average cost. Under the updated guidance, an entity should measure inventory that is within scope at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Subsequent measurement is unchanged for inventory that is measured using last-in, first-out (“LIFO”). This ASU is effective for annual and interim periods beginning after December 15, 2016, and should be applied prospectively with early adoption permitted at the beginning of an interim or annual reporting period. We adopted this guidance on January 1, 2016. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows. In February 2015, the FASB issued ASU 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis,” which makes changes to both the variable interest model and voting interest model and eliminates the indefinite deferral of FASB Statement No. 167, included in ASU 2010-10, for certain investment funds. All reporting entities that hold a variable interest in other legal entities will need to re-evaluate their consolidation conclusions as well as disclosure requirements. This ASU is effective for annual periods beginning after December 15, 2015, and early adoption is permitted, including any interim period. We adopted this guidance on January 1, 2016. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows. In January 2015, the FASB issued ASU 2015-01, “Income Statement – Extraordinary and Unusual Items (Subtopic 225-20),” effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. This update eliminates from GAAP the concept of extraordinary items. We adopted this guidance on January 1, 2016. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows. In November 2014, the FASB issued ASU 2014-16, “Derivatives and Hedging (Topic 815).” Entities commonly raise capital by issuing different classes of shares, including preferred stock, that entitle the holders to certain preferences and rights over the other shareholders. The specific terms of those shares may include conversion rights, redemption rights, voting rights, and liquidation and dividend payment preferences, among other features. One or more of those features may meet the definition of a derivative under GAAP. Shares that include such embedded derivative features are referred to as hybrid financial instruments. The objective of this update is to eliminate the use of different methods in practice and thereby reduce existing diversity under GAAP in the accounting for hybrid financial instruments issued in the form of a share. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. We adopted this guidance on January 1, 2016. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows. In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements – Going Concern (Subtopic 205-40), effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. This standard provides guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The guidance is effective for annual reporting periods ending after December 15, 2016, and early adoption is permitted. We adopted this guidance on January 1, 2016. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows. In March 2016, the FASB issued an accounting standards update which simplifies the accounting for share-based payment transactions, inclusive of income tax accounting and disclosure considerations. This guidance is effective for fiscal and interim periods beginning after December 15, 2016 and is required to be applied retrospectively to all impacted share-based payment arrangements. The adoption of this guidance is not expected to have a significant impact on our financial statements. Recent Accounting Pronouncements Issued but Not Adopted as of June 30, 2017 In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” on revenue recognition. This guidance provides that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The original effective date of this guidance was for interim and annual reporting periods beginning after December 15, 2016, early adoption is not permitted, and the guidance must be applied retrospectively or modified retrospectively. In July 2015, the FASB approved an optional one-year deferral of the effective date. As a result, we expect to adopt this guidance on January 1, 2018. We have not yet determined our approach to adoption or the impact the adoption of this guidance will have on our financial position, results of operations or cash flows, if any. In January 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) 2016-01, which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Changes to the current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. We are currently evaluating the impact of adopting this guidance. In February 2016, the FASB issued an accounting standards update which modifies the accounting for leasing arrangements, particularly those arrangements classified as operating leases. This update will require entities to recognize the assets and liabilities arising from operating leases on the balance sheet. This guidance is effective for fiscal and interim periods beginning after December 15, 2018 and is required to be applied retrospectively to all leasing arrangements. We are currently assessing the effects this guidance may have on our financial statements. In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Clarifying the Definition of a Business (“ASU 2017-01”). The standard clarifies the definition of a business by adding guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions of assets or businesses. ASU 2017-01 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Under ASU 2017-01, to be considered a business, the assets in the transaction need to include an input and a substantive process that together significantly contribute to the ability to create outputs. Prior to the adoption of the new guidance, an acquisition or disposition would be considered a business if there were inputs, as well as processes that when applied to those inputs had the ability to create outputs. Early adoption is permitted for certain transactions. Adoption of ASU 2017-01 may have a material impact on our consolidated financial statements if we enter into future business combinations. In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 simplifies the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. ASU 2017-04 is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, and should be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We do not anticipate the adoption of ASU 2017-04 will have a material impact on our consolidated financial statements. |
Accounts Receivable
Accounts Receivable | 6 Months Ended |
Jun. 30, 2017 | |
Receivables [Abstract] | |
Accounts Receivable | 3. Accounts Receivable June 30, 2017 December 31, 2016 Accounts receivable consists of the following as of: (Unaudited) Trade accounts receivable $ 257,270 $ 138,229 Less allowance for doubtful accounts (10,616 ) - Other 15,920 8,095 $ 262,573 $ 146,324 |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | 4. Inventories June 30, 2017 December 31, 2016 Inventories consists of the following as of: (Unaudited) Finished goods $ 303,134 $ 251,692 Finished goods in transit 65,971 - Deposit on finished goods - 5,837 Raw materials 301,970 523,940 $ 671,075 $ 781,469 |
Property and Equipment and Inta
Property and Equipment and Intangible Assets | 6 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment and Intangible Assets | 5. Property and Equipment and Intangible Assets June 30, 2017 December 31, 2016 Property and equipment consists of the following as of: (Unaudited) Manufacturing, warehouse, display equipment and molds $ 289,759 $ 289,759 Office equipment and furniture 41,581 41,581 Mobile display unit and vehicles 130,500 130,500 Less: depreciation (356,310 ) (310,605 ) Total Property and Equipment $ 105,530 $ 151,235 For the three months ended June 30, 2017 and 2016, depreciation expense was $22,614 and $nil, respectively. For the six months ended June 30, 2017 and 2016, depreciation expense was $45,706 and $52,341, respectively. June 30, 2017 December 31, 2016 Intangible assets consist of the following as of: (Unaudited) Website 62,675 62,675 Less: amortization (62,675 ) (61,926 ) Trademarks – not amortized due to indefinite life 85,891 85,891 Total Intangible Assets $ 85,891 $ 86,640 For the three months ended June 30, 2017 and 2016, amortization expense was $nil and $3,134, respectively. For the six months ended June 30, 2017 and 2016, amortization expense was $748 and $6,267, respectively. Estimated amortization expense to be recorded for the remainder of 2017 is $Nil. |
Promissory Notes Payable
Promissory Notes Payable | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Promissory Notes Payable | 6. Promissory Notes Payable The following promissory notes are unsecured as follows: a) Promissory Note #1 – repaid during the six months ended June 30, 2017; and b) Promissory Note #2 - $19,314 – no specific repayment terms. |
Loans Payable
Loans Payable | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Loans Payable | 7. Loans Payable June 30, 2017 December 31, 2016 Loans payable consists of the following as of: (Unaudited) Short-term loan (a) below $ 11,840 $ 14,069 Short-term loan, related party (a) below 101,911 120,374 Senior Secured Revolving Note (b) below 1,368,832 1,657,942 Factoring loan (c) below 22,739 - Payment rights loan (d) below 79,200 - Total loans payable $ 1,584,522 $ 1,792,384 a) In September 2015, we received short-term loans totaling $145,000 of which $130,000 was received from a family trust of our Chief Executive Officer. These loans bear interest at 10%, are unsecured and due on demand. As of August 14, 2017, no demand for repayment has been received. b) On November 6, 2015, we entered into a Credit Agreement with TCA Global Credit Master Fund, LP (“TCA”). Under the terms of the Credit Agreement, TCA committed to lend up to $3,500,000 (the “Credit Facility”) pursuant to a senior secured revolving note (the “Note”). TCA has funded to date $1,750,000, $900,000 in fiscal 2015 and $850,000 in fiscal 2017. The Credit Facility is secured by a senior secured interest in all our assets. We are charged a 12% per annum rate of interest plus a 6% per annum administration fee on the daily loan balance outstanding. The Lender has the right, in the Event of Default, to convert any outstanding amounts under the Note into restricted shares of our common stock based on 85% of the weighted value average price of our common shares over the prior 5 trading days prior to conversion. However, the Lender may not convert any portion of the Note to the extent that after giving effect to the shares which would be received on conversion, the Lender would beneficially own more than 4.99% of our common stock. In connection with the Credit Facility and subsequent loans therein, we were obligated to pay a total of $500,000 in investment banking fees to TCA. As security for the initial fee of $150,000 we issued 3,000,000 common shares to TCA. These shares were sold for total proceeds of $119,550 leaving a total balance owing of $380,500. The original maturity of the Note was November 6, 2016. TCA has verbally agreed to extend the maturity date to a future date but as of August 14, 2017 we have not reached an agreement with TCA on this extension. c) On February 22, 2017, we sold future receipts totaling $61,098 for proceeds of $44,500 pursuant to a Revenue Based Factoring Agreement dated February 20, 2017. We are required to repay $332 per business day for 184 business days. We have repaid a total of $29,880 to June 30, 2017. The principal owing as at June 30, 2017 of $31,218 is offset by unamortized deferred interest of $8,480. d) On June 6, 2017, we entered into a Payment Rights Purchase and Sale Agreement with Everest Business Funding and sold future receipts of $126,900 for net proceeds of $90,000. We are required to repay $846 per business day for 150 business days. We have repaid a total of $15,228 to June 30, 2017. The principal owing as at June 30, 2017 of $111,672 is offset by unamortized deferred interest of $32,472. |
Convertible Notes
Convertible Notes | 6 Months Ended |
Jun. 30, 2017 | |
Notes to Financial Statements | |
Convertible Notes | 8. Convertible Notes June 30, 2017 December 31, 2016 Convertible notes consist of the following: (Unaudited) Face value of convertible notes - (a) to (f) below $ 529,287 $ 80,750 Less discounts (364,617 ) (80,750 ) Revaluation of notes - 9,630 164,670 9,630 Less: unamortized debt issuance costs - (7,605 ) Net carrying value $ 164,670 $ 2,025 a) On October 7, 2016, we issued a convertible note in the principal amount of $80,750 due on demand on or after October 7, 2017. We received a total amount of $75,000, net of debt issuance costs of $7,500. The note had a cash redemption premium of 115% of the principal amount in the first 30 days following the execution date, of 125% for days 31-90 following the execution date, and 135% after the 91st day. After 180 days, cash redemption is only available upon approval by the holder at a cash redemption premium of 140%. The note carried an interest rate of 9% per annum and was convertible into common shares at a 40% discount to the average of the three lowest trading prices during the previous 20 trading days to the date of conversion. On April 4, 2017 GHS Investments, LLC (“GHS”), pursuant to an Assignment Agreement between us, the lender (See a above), and GHS, satisfied our obligations to the lender in the amount of $118,231 which included principal of $80,750 and accrued regular and default interest of $37,481. GHS has the right to convert this amount into our common shares at a 40% discount of the average of the three lowest traded prices in the prior 20 days. To date a total of $98,728 of principal and $673 of interest was converted into 63,964,905 common shares at an average aggregate price of $0.002. We have reserved 58,000,000 common shares for future issuances. See Subsequent Events for repayment of the balance of $19,395 plus accrued interest; b) On January 11, 2017, we borrowed $43,000 (“Power Up Loan #1”) from Power Up Lending Group, Ltd (Power Up). The Power Up Loan #1 is evidenced by a promissory note which bears interest at 8% per annum and due on October 17, 2017. On July 10, 2017 Power Up may convert Power Up Loan #1 into common shares. On March 10, 2017, we borrowed an additional $30,000 (“Power Up Loan #2) from Power Up which is evidenced by a promissory note bearing interest at 8% per annum, due on December 30, 2017. On June 20, 2017, we borrowed an additional $33,000 (“Power Up Loan #3) from Power Up which is evidenced by a promissory note bearing interest at 8% per annum, due on December 30, 2017. On July 10, 2017 Power Up may convert Power Up Loan #1 into common shares and on September 6, 2017 Power Up may convert Power Up Loan #2 into our common shares and on December 20, 2017 Power Up may convert Power Up Loan #3 into our common shares. The conversion price of these three loans is 61% of the average of the three lowest trading prices of our common shares during the 15-day trading period ending on the last trading day prior to the date of conversion. The derivative treatment would not become applicable until the promissory notes become convertible on July 10, 2017, September 6, 2017 and December 20, 2017, respectively. c) On January 25, 2017, we entered into a Settlement Agreement with certain creditors whereby Rockwell Capital Inc. purchased debts from our creditors totaling $250,738 (the “Claim Amount”). In return Rockwell Capital Inc. can convert the Claim Amount into free-trading common shares pursuant to Section 3(a) (10) of the Securities Act at a 40% discount of the 3 lowest traded prices over the prior 10 days. As at March 28, 2017 the Claim Amount was fully settled and converted into 78,459,168 common shares. In connection with the Settlement Agreement we issued 625,000 common shares having a fair market value of $6,425 for a registered broker dealer to act on our behalf; d) On January 26, 2017, we entered into a Debt Purchase Agreement (“DPA”) with Old Main Capital, LLC (“Old Main”) to assign up to $1,727,484 of principal owed to TCA Global Credit Master Fund LP (“TCA”) in exchange for up to $1,722,484 pursuant to terms of the DPA. To evidence this DPA we entered into a 10% Senior Replacement Convertible Promissory Note for any purchases made from TCA by Old Main. As at June 30, 2017 Old Main has purchased $313,000 of such debt by paying TCA a total of $313,000 and paying legal fees of $7,000 to legal counsel for Old Main and TCA. Additionally, we were charged a total of $38,000 of default interest over the period from January 26, 2017 to June 30, 2017. The total amount owing under the DPA plus additional legal and interest costs is $358,000. Old Main has the right to convert this amount into our common shares at a 35% discount of the average of the two lowest traded prices in the prior 30 days. As at June 30, 2017, a total of $309,553 was converted into 138,418,874 common shares at an average price of $0.002. The balance owing as at June 30, 2017 was $48,447. See Subsequent Events for future repurchases of TCA debt and conversions of debt into common shares. We had reserved 363,673,353 common shares for future issuances of which a balance of 10,200,000 remains unused; e) On April 3, 2017, we entered into an additional financing arrangement with Old Main Capital, LLC, (“Old Main”), and delivered an installment Convertible Promissory Note (the “Note”) to Old Main. Under the terms of the Note, Old Main loaned us $200,000 on April 4, 2017 and an additional $50,000 on April 26, 2017. Each loan under the Note is due nine months from date of advance and bears interest at 10% per annum. In addition, pursuant to an original issue discount provision, the principle of the Note was increased above the $250,000 received by us to $294,117, which provides additional consideration to the Lender. In addition, the principle and accrued interest on the Note is convertible in whole or in part at the option of Old Main into our common shares at a conversion price per share equal to 65% of the average of the two lowest traded prices for our common shares in the 30 days preceding conversion. We have reserved 500,000,000 common shares for future issuances and have accrued interest of $9,110 as at June 30, 2017; and f) On June 22, 2017, we entered into a Securities Purchase Agreement with Crossover Capital Fund II LLC (the “Crossover Agreement”). The Crossover Agreement represents two 10% convertible notes in the amount of $58,333 each for a total funding of $116,666. We issued Crossover Capital Note #1 on June 22, 2017 and received $50,000, after an original issue discount of $5,833 and debt issuance costs of $2,500. The maturity date of this note is March 22, 2018 and interest accrues at 10%. Crossover Capital Fund II LLC is entitled to convert this note into our common shares at a conversion price equal to 62% of the average of the three lowest trading prices of our common stock for the twenty prior trading days prior to and including the conversion date. We have reserved up to 276,170,000 shares for future conversion of this Crossover Agreement. See Subsequent Events for the issuance of Crossover Capital Note #2 for net proceeds of $50,000 on July 24, 2017. |
Derivative Liabilities
Derivative Liabilities | 6 Months Ended |
Jun. 30, 2017 | |
Notes to Financial Statements | |
Derivative Liabilities | 9. Derivative Liabilities The embedded conversion option of the convertible debenture described in Note 8 contains a conversion feature that qualifies for embedded derivative classification. The fair value of the liability will be re-measured at the end of every reporting period and the change in fair value will be reported in the statement of operations as a gain or loss on derivative financial instruments. The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities: June 30, 2017 December 31, 2016 (Unaudited) Balance, beginning $ 93,206 $ - Original discount limited to proceeds of notes 957,796 80,750 Fair value of derivative liabilities in excess of note proceeds received 725,010 9,825 Change in fair value of embedded conversion option 176,753 2,631 Conversion of derivative liability (1,255,703 ) - Balance, ending $ 697,063 $ 93,206 We use Level 3 inputs for our valuation methodology for the embedded conversion option liabilities as their fair values were determined by using the Black-Scholes option pricing model based on various assumptions. The model incorporates the price of a share of our common stock (as quoted on the Over the Counter Markets), volatility, risk free rate, dividend rate and estimated life. Significant changes in any of these inputs in isolation would result in a significant change in the fair value measurement. As required, these are classified based on the lowest level of input that is significant to the fair value measurement. The following table shows the assumptions used in the calculations: Expected Volatility Risk-free Interest Rate Expected Dividend Yield Expected Life (in years) At issuance 133% - 269 % 0.52% - 1.24 % 0 % 0.15 - 1.00 At June 30, 2017 259% - 301 % 1.14% - 1.24 % 0 % 0.51 – 1.00 |
Common Stock
Common Stock | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Common Stock | 10. Common Stock On April 24, 2017, an Information Statement was filed with the Securities and Exchange Commission pursuant to Section 14C of the Securities Exchange Act of 1934, to notify our shareholders of a proposed amendment to our Articles of Incorporation. We proposed an amendment to our Articles of Incorporation that would increase the number of authorized shares of our common stock from 500,000,000 to 5,000,000,000 (the “Authorized Increase Amendment”). The Authorized Increase Amendment was unanimously adopted and approved on April 23, 2017 by written consent of our Board of Directors. The Authorized Increase Amendment became effective on May 29, 2017. Equity transactions during the six months ended June 30, 2017: a) On January 25, 2017, in connection with the Settlement Agreement described in Note 7 we issued 625,000 common shares having a fair market value of $6,425 for a registered broker dealer to act on our behalf; b) Between February 15, 2017 and June 30, 2017, a total of $309,553 of the Old Main debt was converted into 150,918,874 common shares at an aggregate average price of $0.002 per share; c) Between April 21, 2017 and June 30, 2017, a total of $99,728 of the GHS debt and $673 of accrued interest was converted into 63,964,905 common shares at an aggregate average price of $0.0015 per share; d) Between January 27, 2017 and June 30, 2017, a total of $250,738 of the Rockwell Capital Inc. Settlement Agreement Claim Amount was settled and converted into 78,459,168 common shares at an aggregate average price of $0.003 per share; e) On March 13, 2017, we issued 200,000 common shares to settle $2,000 of creditor debt. These shares were valued at $0.01 per common shares; f) On March 13, 2017, we issued 500,000 common shares at a fair value of $0.01 per share to a service provider pursuant to a Consultant Agreement. The fair market value of these shares, being $5,000 was charged to operations. Equity transactions during the six months ended June 30, 2016: a) On January 31, 2016, we issued 238,889 common shares and on February 29, 2016 we issued 238,889 common shares having an aggregate fair value of $40,611 pursuant to an employment contract with an officer/director. This contract expired on March 8, 2016. These shares were valued at $0.08 per share or $16,844 in total which amount was deducted from additional paid in capital; b) On April 12, 2016, we issued 50,000 common shares to a former Advisory Board Member for the past use of her name on our website. The value of these shares being $3,875 was charged to operations during the three months ended June 30, 2016; c) On May 5 and June 7, 2016, we issued 1,000,000 common shares and 200,000 common shares, respectively, to settle $120,000 of creditor debt. These shares were valued at $0.10 based on a negotiated settlement price dated April 21, 2016; d) During the three months ended June 30, 2016 we issued a total of 250,000 common shares at an average fair value of $0.12 per share to a service provider pursuant to a Consultant Agreement dated April 11, 2016. The aggregate value of these shares, being $29,792, was charged to operations during the three months ended June 30, 2016. We are committed to issuing an additional 250,000 shares on or before September 11, 2016; and e) On May 11, 2016, we issued 250,000 common shares at $0.15 per share to a service provider pursuant to a Strategic Advisory and Services Agreement. These shares were valued at the 5 days weight average price prior to issuance. |
Warrants
Warrants | 6 Months Ended |
Jun. 30, 2017 | |
Warrants | |
Warrants | 11. Warrants At June 30, 2017, we had no common stock purchase warrants outstanding. |
Preferred Stock
Preferred Stock | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Preferred Stock | 12. Preferred Stock There are 1,000,000 shares of preferred stock, par value $0.001, issuable in series with rights, preferences and limitations to be determined by the Board of Directors from time to time. On December 9, 2016, our Board of Directors created a series of Preferred Shares, $0.001 par value per share, designated as Series “A” Preferred Shares. The number of shares constituting Series “A” Preferred Shares is 300,000. Each Series “A” Preferred Share entitles the holder to 1,000 votes on all matters submitted to a vote of our shareholders. On December 9, 2016, we issued 100,000 Series “A” Preferred Shares to our Chief Executive Officer for $400 and on April 24, 2017 we issued a further 200,000 Series “A” Preferred Shares to our Chief Executive Officer for $800. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. Subsequent Events Subsequent to June 30, 2017 we have entered into the following debt and equity transactions: a) On July 17, 2017, we entered into a Securities Purchase Agreement with LG Capital Funding, LLC (the “LG Agreement”). The LG Agreement represents two 8% convertible redeemable notes in the amount of $78,750 each for a total funding of $157,500. We issued the first of the two notes on July 17, 2017 and received $75,000 net of legal fees of $3,750. The maturity date of this note is July 17, 2018 and interest accrues at 8%. LG Capital Funding, LLC is entitled to convert this note into our common shares at a conversion price equal to 60% of the lowest trading price of our common stock for the twenty prior trading days. We have reserved up to 262,500,000 shares for future conversion of this LG Agreement; b) On July 19, 2017, we issued a convertible note in the principal amount of $62,000 to JSJ Investments Inc. (the “JSJ Note”) due on demand on or after April 19, 2018. We received a net amount of $50,000, after an original issue discount of $10,000 and debt issuance costs of $2,000. The note has a cash redemption premium of 150% of the principal amount in the first 180 days. The note bears interest at 12% per annum and is convertible into common shares at a 40% discount to the average of the three lowest trading prices during the previous twenty trading days to the date of conversion. We have reserved up to 453,000,000 shares for future conversion of this note; c) On July 24, 2017, we issued Crossover Capital Note #2 and received net proceeds of $50,000, after an original issue discount of $5,833 and debt issuance costs of $2,500. The maturity date of this note is April 22, 2018 and interest accrues at 10%. Crossover Capital Fund II LLC is entitled to convert this note into our common shares at a conversion price equal to 62% of the average of the three lowest trading prices of our common stock for the twenty prior trading days prior to and including the conversion date. We have reserved up to 205,000,000 shares for future conversion of Crossover Capital Note #2; d) Between July 17, 2017 and August 2, 2017, we issued 46,572,647 common shares at an average price of $0.001 upon conversion of Power Up Loan #1 in the amount of $43,000 plus accrued interest of $1,770; e) Between July 5, 2017 and July 24, 2017, we repaid the balance of $19,395 owing to GHS and issued 18,878,681 shares at an average price of $0.001 per share; f) Old Main purchased an additional $150,000 of debt owing to TCA by paying TCA $150,000. Between July 18, 2017 and August 14, 2017, we issued 202,551,479 common shares at an average price of $0.001 upon conversion of debt owing in the amount of $167,269; and g) As at August 14, 2017 we have reserved, for future issuance, a total of 2,200,233,850 common shares and have a balance of authorized and unissued and unreserved common shares remaining of 2,166,165,416. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of presentation The unaudited condensed consolidated interim financial statements for the three months and six months ended June 30, 2017 and 2016 have been prepared in accordance with accounting principles generally accepted in the United States. Our fiscal year end is December 31st. The foregoing unaudited condensed consolidated interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information using the instructions for Form 10-Q and Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, these condensed consolidated financial statements do not include all of the disclosures required by generally accepted accounting principles in the United States of America for complete financial statements. These unaudited interim condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto included on Form 10-K for the year ended December 31, 2016. In our opinion, the unaudited condensed consolidated interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim periods presented. Operating results for the three months and six months ended June 30, 2017, are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with United States generally accepted accounting principles requires us 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. We regularly evaluate estimates and assumptions related to the useful life and recoverability of long-lived assets, stock-based compensation, and deferred income tax asset valuation allowances. We base our estimates and assumptions on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments as to 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 us may differ materially and adversely from our estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. |
Revenue Recognition | Revenue Recognition Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable and collectability is reasonably assured. Ownership and title of our products pass to customers upon delivery of the products to customers. Certain of our distributors may also perform a separate function as a co-packer on our behalf. In such cases, ownership of and title to our products that are co-packed on our behalf by those co-packers who are also distributors, passes to such distributors when we are notified by them that they have taken transfer or possession of the relevant portion of our finished goods. Net sales have been determined after deduction of discounts, slotting fees and other promotional allowances in accordance with ASC 605-50. All sales to distributors and customers are final; however, in limited instances, due to product quality issues or distributor terminations, we may accept returned product. To date, such returns have been de minimis. |
Reclassification of Prior Period | Reclassification of Prior Period Certain prior-period amounts have been reclassified to conform to the current-period presentation. These reclassifications had no impact on reported net loss, total assets or liabilities. |
Seasonality | Seasonality Our sales are seasonal and we experience fluctuations in quarterly results as a result of many factors. Historically, we have generated a higher percentage of our revenues during the warm weather months of April through September. Timing of customer purchases will vary each year and sales can be expected to shift from one quarter to another. As a result, we believe that period-to-period comparisons of results of operations are not necessarily meaningful and should not be relied upon as any indication of future performance or results expected for the entire fiscal year. |
Recent Pronouncements | Recent Pronouncements We continually assess any new accounting pronouncements to determine their applicability to our operations and financial reporting. Where it is determined that a new accounting pronouncement affects our financial reporting, we undertake a study to determine the consequence of the change to our financial statements and assure that there are proper controls in place to ascertain that our financial statements properly reflect the change. In April 2015, the FASB issued ASU 2015-05, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement,” which provides guidance about whether a cloud computing arrangement includes a software license. It also provides guidance related to a customer’s accounting for fees paid in a cloud computing arrangement. This standard provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. This guidance is effective for interim and annual reporting periods beginning after December 15, 2015, and early adoption is permitted. We adopted this guidance on January 1, 2016. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows. In May 2015, the FASB issued ASU 2015-07, “Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent),” which removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. Further, the amendments remove the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. This ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015, and early adoption is permitted. The new guidance should be applied on a retrospective basis to all periods presented. We adopted this guidance on January 1, 2016. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows. In September 2015, the FASB issued ASU 2015-16, “Simplifying the Accounting for Measurement –Period Adjustments.” Changes to the accounting for measurement-period adjustments relate to business combinations. Currently, an acquiring entity is required to retrospectively adjust the balance sheet amounts of the acquired business recognized at the acquisition date with a corresponding adjustment to goodwill as a result of changes made to the balance sheet amounts of the acquired business. The measurement period is the period after the acquisition date during which the acquirer may adjust the balance sheet amounts recognized for a business combination (generally up to one year from the date of acquisition). The changes eliminate the requirement to make such retrospective adjustments, and, instead require the acquiring entity to record these adjustments in the reporting period they are determined. The new standard is effective for both public and private companies for periods beginning after December 15, 2015. We adopted this guidance in the first quarter 2016. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows. In July 2015, the FASB issued ASU 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory,” which applies to inventory that is measured using first-in, first-out (“FIFO”) or average cost. Under the updated guidance, an entity should measure inventory that is within scope at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Subsequent measurement is unchanged for inventory that is measured using last-in, first-out (“LIFO”). This ASU is effective for annual and interim periods beginning after December 15, 2016, and should be applied prospectively with early adoption permitted at the beginning of an interim or annual reporting period. We adopted this guidance on January 1, 2016. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows. In February 2015, the FASB issued ASU 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis,” which makes changes to both the variable interest model and voting interest model and eliminates the indefinite deferral of FASB Statement No. 167, included in ASU 2010-10, for certain investment funds. All reporting entities that hold a variable interest in other legal entities will need to re-evaluate their consolidation conclusions as well as disclosure requirements. This ASU is effective for annual periods beginning after December 15, 2015, and early adoption is permitted, including any interim period. We adopted this guidance on January 1, 2016. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows. In January 2015, the FASB issued ASU 2015-01, “Income Statement – Extraordinary and Unusual Items (Subtopic 225-20),” effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. This update eliminates from GAAP the concept of extraordinary items. We adopted this guidance on January 1, 2016. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows. In November 2014, the FASB issued ASU 2014-16, “Derivatives and Hedging (Topic 815).” Entities commonly raise capital by issuing different classes of shares, including preferred stock, that entitle the holders to certain preferences and rights over the other shareholders. The specific terms of those shares may include conversion rights, redemption rights, voting rights, and liquidation and dividend payment preferences, among other features. One or more of those features may meet the definition of a derivative under GAAP. Shares that include such embedded derivative features are referred to as hybrid financial instruments. The objective of this update is to eliminate the use of different methods in practice and thereby reduce existing diversity under GAAP in the accounting for hybrid financial instruments issued in the form of a share. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. We adopted this guidance on January 1, 2016. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows. In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements – Going Concern (Subtopic 205-40), effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. This standard provides guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The guidance is effective for annual reporting periods ending after December 15, 2016, and early adoption is permitted. We adopted this guidance on January 1, 2016. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows. In March 2016, the FASB issued an accounting standards update which simplifies the accounting for share-based payment transactions, inclusive of income tax accounting and disclosure considerations. This guidance is effective for fiscal and interim periods beginning after December 15, 2016 and is required to be applied retrospectively to all impacted share-based payment arrangements. The adoption of this guidance is not expected to have a significant impact on our financial statements. Recent Accounting Pronouncements Issued but Not Adopted as of June 30, 2017 In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” on revenue recognition. This guidance provides that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The original effective date of this guidance was for interim and annual reporting periods beginning after December 15, 2016, early adoption is not permitted, and the guidance must be applied retrospectively or modified retrospectively. In July 2015, the FASB approved an optional one-year deferral of the effective date. As a result, we expect to adopt this guidance on January 1, 2018. We have not yet determined our approach to adoption or the impact the adoption of this guidance will have on our financial position, results of operations or cash flows, if any. In January 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) 2016-01, which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Changes to the current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. We are currently evaluating the impact of adopting this guidance. In February 2016, the FASB issued an accounting standards update which modifies the accounting for leasing arrangements, particularly those arrangements classified as operating leases. This update will require entities to recognize the assets and liabilities arising from operating leases on the balance sheet. This guidance is effective for fiscal and interim periods beginning after December 15, 2018 and is required to be applied retrospectively to all leasing arrangements. We are currently assessing the effects this guidance may have on our financial statements. In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Clarifying the Definition of a Business (“ASU 2017-01”). The standard clarifies the definition of a business by adding guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions of assets or businesses. ASU 2017-01 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Under ASU 2017-01, to be considered a business, the assets in the transaction need to include an input and a substantive process that together significantly contribute to the ability to create outputs. Prior to the adoption of the new guidance, an acquisition or disposition would be considered a business if there were inputs, as well as processes that when applied to those inputs had the ability to create outputs. Early adoption is permitted for certain transactions. Adoption of ASU 2017-01 may have a material impact on our consolidated financial statements if we enter into future business combinations. In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 simplifies the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. ASU 2017-04 is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, and should be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We do not anticipate the adoption of ASU 2017-04 will have a material impact on our consolidated financial statements. |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | June 30, 2017 December 31, 2016 Accounts receivable consists of the following as of: (Unaudited) Trade accounts receivable $ 257,270 $ 138,229 Less allowance for doubtful accounts (10,616 ) - Other 15,920 8,095 $ 262,573 $ 146,324 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | June 30, 2017 December 31, 2016 Inventories consists of the following as of: (Unaudited) Finished goods $ 303,134 $ 251,692 Finished goods in transit 65,971 - Deposit on finished goods - 5,837 Raw materials 301,970 523,940 $ 671,075 $ 781,469 |
Property and Equipment and In22
Property and Equipment and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | June 30, 2017 December 31, 2016 Property and equipment consists of the following as of: (Unaudited) Manufacturing, warehouse, display equipment and molds $ 289,759 $ 289,759 Office equipment and furniture 41,581 41,581 Mobile display unit and vehicles 130,500 130,500 Less: depreciation (356,310 ) (310,605 ) Total Property and Equipment $ 105,530 $ 151,235 |
Schedule of Intangible Assets | For the three months ended June 30, 2017 and 2016, depreciation expense was $22,614 and $nil, respectively. For the six months ended June 30, 2017 and 2016, depreciation expense was $45,706 and $52,341, respectively. June 30, 2017 December 31, 2016 Intangible assets consist of the following as of: (Unaudited) Website 62,675 62,675 Less: amortization (62,675 ) (61,926 ) Trademarks – not amortized due to indefinite life 85,891 85,891 Total Intangible Assets $ 85,891 $ 86,640 |
Loans Payable (Tables)
Loans Payable (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Loans Payable | June 30, 2017 December 31, 2016 Loans payable consists of the following as of: (Unaudited) Short-term loan (a) below $ 11,840 $ 14,069 Short-term loan, related party (a) below 101,911 120,374 Senior Secured Revolving Note (b) below 1,368,832 1,657,942 Factoring loan (c) below 22,739 - Payment rights loan (d) below 79,200 - Total loans payable $ 1,584,522 $ 1,792,384 a) In September 2015, we received short-term loans totaling $145,000 of which $130,000 was received from a family trust of our Chief Executive Officer. These loans bear interest at 10%, are unsecured and due on demand. As of August 14, 2017, no demand for repayment has been received. b) On November 6, 2015, we entered into a Credit Agreement with TCA Global Credit Master Fund, LP (“TCA”). Under the terms of the Credit Agreement, TCA committed to lend up to $3,500,000 (the “Credit Facility”) pursuant to a senior secured revolving note (the “Note”). TCA has funded to date $1,750,000, $900,000 in fiscal 2015 and $850,000 in fiscal 2017. The Credit Facility is secured by a senior secured interest in all our assets. We are charged a 12% per annum rate of interest plus a 6% per annum administration fee on the daily loan balance outstanding. The Lender has the right, in the Event of Default, to convert any outstanding amounts under the Note into restricted shares of our common stock based on 85% of the weighted value average price of our common shares over the prior 5 trading days prior to conversion. However, the Lender may not convert any portion of the Note to the extent that after giving effect to the shares which would be received on conversion, the Lender would beneficially own more than 4.99% of our common stock. In connection with the Credit Facility and subsequent loans therein, we were obligated to pay a total of $500,000 in investment banking fees to TCA. As security for the initial fee of $150,000 we issued 3,000,000 common shares to TCA. These shares were sold for total proceeds of $119,550 leaving a total balance owing of $380,500. The original maturity of the Note was November 6, 2016. TCA has verbally agreed to extend the maturity date to a future date but as of August 14, 2017 we have not reached an agreement with TCA on this extension. c) On February 22, 2017, we sold future receipts totaling $61,098 for proceeds of $44,500 pursuant to a Revenue Based Factoring Agreement dated February 20, 2017. We are required to repay $332 per business day for 184 business days. We have repaid a total of $29,880 to June 30, 2017. The principal owing as at June 30, 2017 of $31,218 is offset by unamortized deferred interest of $8,480. d) On June 6, 2017, we entered into a Payment Rights Purchase and Sale Agreement with Everest Business Funding and sold future receipts of $126,900 for net proceeds of $90,000. We are required to repay $846 per business day for 150 business days. We have repaid a total of $15,228 to June 30, 2017. The principal owing as at June 30, 2017 of $111,672 is offset by unamortized deferred interest of $32,472. |
Convertible Notes (Tables)
Convertible Notes (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Notes to Financial Statements | |
Schedule of Convertible Notes | June 30, 2017 December 31, 2016 Convertible notes consist of the following: (Unaudited) Face value of convertible notes - (a) to (f) below $ 529,287 $ 80,750 Less discounts (364,617 ) (80,750 ) Revaluation of notes - 9,630 164,670 9,630 Less: unamortized debt issuance costs - (7,605 ) Net carrying value $ 164,670 $ 2,025 a) On October 7, 2016, we issued a convertible note in the principal amount of $80,750 due on demand on or after October 7, 2017. We received a total amount of $75,000, net of debt issuance costs of $7,500. The note had a cash redemption premium of 115% of the principal amount in the first 30 days following the execution date, of 125% for days 31-90 following the execution date, and 135% after the 91st day. After 180 days, cash redemption is only available upon approval by the holder at a cash redemption premium of 140%. The note carried an interest rate of 9% per annum and was convertible into common shares at a 40% discount to the average of the three lowest trading prices during the previous 20 trading days to the date of conversion. On April 4, 2017 GHS Investments, LLC (“GHS”), pursuant to an Assignment Agreement between us, the lender (See a above), and GHS, satisfied our obligations to the lender in the amount of $118,231 which included principal of $80,750 and accrued regular and default interest of $37,481. GHS has the right to convert this amount into our common shares at a 40% discount of the average of the three lowest traded prices in the prior 20 days. To date a total of $98,728 of principal and $673 of interest was converted into 63,964,905 common shares at an average aggregate price of $0.002. We have reserved 58,000,000 common shares for future issuances. See Subsequent Events for repayment of the balance of $19,395 plus accrued interest; b) On January 11, 2017, we borrowed $43,000 (“Power Up Loan #1”) from Power Up Lending Group, Ltd (Power Up). The Power Up Loan #1 is evidenced by a promissory note which bears interest at 8% per annum and due on October 17, 2017. On July 10, 2017 Power Up may convert Power Up Loan #1 into common shares. On March 10, 2017, we borrowed an additional $30,000 (“Power Up Loan #2) from Power Up which is evidenced by a promissory note bearing interest at 8% per annum, due on December 30, 2017. On June 20, 2017, we borrowed an additional $33,000 (“Power Up Loan #3) from Power Up which is evidenced by a promissory note bearing interest at 8% per annum, due on December 30, 2017. On July 10, 2017 Power Up may convert Power Up Loan #1 into common shares and on September 6, 2017 Power Up may convert Power Up Loan #2 into our common shares and on December 20, 2017 Power Up may convert Power Up Loan #3 into our common shares. The conversion price of these three loans is 61% of the average of the three lowest trading prices of our common shares during the 15-day trading period ending on the last trading day prior to the date of conversion. The derivative treatment would not become applicable until the promissory notes become convertible on July 10, 2017, September 6, 2017 and December 20, 2017, respectively. c) On January 25, 2017, we entered into a Settlement Agreement with certain creditors whereby Rockwell Capital Inc. purchased debts from our creditors totaling $250,738 (the “Claim Amount”). In return Rockwell Capital Inc. can convert the Claim Amount into free-trading common shares pursuant to Section 3(a) (10) of the Securities Act at a 40% discount of the 3 lowest traded prices over the prior 10 days. As at March 28, 2017 the Claim Amount was fully settled and converted into 78,459,168 common shares. In connection with the Settlement Agreement we issued 625,000 common shares having a fair market value of $6,425 for a registered broker dealer to act on our behalf; d) On January 26, 2017, we entered into a Debt Purchase Agreement (“DPA”) with Old Main Capital, LLC (“Old Main”) to assign up to $1,727,484 of principal owed to TCA Global Credit Master Fund LP (“TCA”) in exchange for up to $1,722,484 pursuant to terms of the DPA. To evidence this DPA we entered into a 10% Senior Replacement Convertible Promissory Note for any purchases made from TCA by Old Main. As at June 30, 2017 Old Main has purchased $313,000 of such debt by paying TCA a total of $313,000 and paying legal fees of $7,000 to legal counsel for Old Main and TCA. Additionally, we were charged a total of $38,000 of default interest over the period from January 26, 2017 to June 30, 2017. The total amount owing under the DPA plus additional legal and interest costs is $358,000. Old Main has the right to convert this amount into our common shares at a 35% discount of the average of the two lowest traded prices in the prior 30 days. As at June 30, 2017, a total of $309,553 was converted into 138,418,874 common shares at an average price of $0.002. The balance owing as at June 30, 2017 was $48,447. See Subsequent Events for future repurchases of TCA debt and conversions of debt into common shares. We had reserved 363,673,353 common shares for future issuances of which a balance of 10,200,000 remains unused; e) On April 3, 2017, we entered into an additional financing arrangement with Old Main Capital, LLC, (“Old Main”), and delivered an installment Convertible Promissory Note (the “Note”) to Old Main. Under the terms of the Note, Old Main loaned us $200,000 on April 4, 2017 and an additional $50,000 on April 26, 2017. Each loan under the Note is due nine months from date of advance and bears interest at 10% per annum. In addition, pursuant to an original issue discount provision, the principle of the Note was increased above the $250,000 received by us to $294,117, which provides additional consideration to the Lender. In addition, the principle and accrued interest on the Note is convertible in whole or in part at the option of Old Main into our common shares at a conversion price per share equal to 65% of the average of the two lowest traded prices for our common shares in the 30 days preceding conversion. We have reserved 500,000,000 common shares for future issuances and have accrued interest of $9,110 as at June 30, 2017; and f) On June 22, 2017, we entered into a Securities Purchase Agreement with Crossover Capital Fund II LLC (the “Crossover Agreement”). The Crossover Agreement represents two 10% convertible notes in the amount of $58,333 each for a total funding of $116,666. We issued Crossover Capital Note #1 on June 22, 2017 and received $50,000, after an original issue discount of $5,833 and debt issuance costs of $2,500. The maturity date of this note is March 22, 2018 and interest accrues at 10%. Crossover Capital Fund II LLC is entitled to convert this note into our common shares at a conversion price equal to 62% of the average of the three lowest trading prices of our common stock for the twenty prior trading days prior to and including the conversion date. We have reserved up to 276,170,000 shares for future conversion of this Crossover Agreement. See Subsequent Events for the issuance of Crossover Capital Note #2 for net proceeds of $50,000 on July 24, 2017. |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Notes to Financial Statements | |
Summary of Changes in Fair Value | The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities: June 30, 2017 December 31, 2016 (Unaudited) Balance, beginning $ 93,206 $ - Original discount limited to proceeds of notes 957,796 80,750 Fair value of derivative liabilities in excess of note proceeds received 725,010 9,825 Change in fair value of embedded conversion option 176,753 2,631 Conversion of derivative liability (1,255,703 ) - Balance, ending $ 697,063 $ 93,206 |
Schedule of Assumptions | The following table shows the assumptions used in the calculations: Expected Volatility Risk-free Interest Rate Expected Dividend Yield Expected Life (in years) At issuance 133% - 269 % 0.52% - 1.24 % 0 % 0.15 - 1.00 At June 30, 2017 259% - 301 % 1.14% - 1.24 % 0 % 0.51 – 1.00 |
Nature of Operations (Details N
Nature of Operations (Details Narrative) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Working capital | $ 2,211,823 | |
Retained earnings (accumulated deficit) | 19,237,957 | $ 16,694,716 |
Total stockholders’ equity | $ 2,020,402 | $ 1,450,320 |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Receivables [Abstract] | ||
Trade accounts receivable | $ 257,270 | $ 138,229 |
Less allowance for doubtful accounts | (10,616) | |
Other | 15,920 | 8,095 |
Accounts receivable net | $ 262,573 | $ 146,324 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 303,134 | $ 251,692 |
Finished goods in transit | 65,971 | |
Deposit on finished goods | 5,837 | |
Raw materials | 301,970 | 523,940 |
Inventory, net | $ 671,075 | $ 781,468 |
Property and Equipment and In29
Property and Equipment and Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation | $ 22,614 | $ 45,706 | $ 52,341 | |
Amortization expense | $ 3,134 | 748 | $ 6,267 | |
Finite-lived intangible assets, amortization expense, remainder of fiscal year |
Property and Equipment and In30
Property and Equipment and Intangible Assets - Schedule of Property and Equipment (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Abstract] | ||
Manufacturing, warehouse, display equipment and molds | $ 289,759 | $ 289,759 |
Office equipment and furniture | 41,581 | 41,581 |
Mobile display unit and vehicles | 130,500 | 130,500 |
Less: depreciation | (356,310) | (310,604) |
Total Property and Equipment | $ 105,530 | $ 151,235 |
Property and Equipment and In31
Property and Equipment and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Abstract] | ||
Website | $ 62,675 | $ 62,675 |
Less: amortization | (62,675) | (61,927) |
Trademarks – not amortized due to indefinite life | 85,891 | 85,891 |
Total Intangible Assets | $ 85,891 | $ 86,640 |
Promissory Notes Payable (Detai
Promissory Notes Payable (Details Narrative) | Jun. 30, 2017USD ($) |
Promissory Note [Member] | |
Debt instrument, face amount | $ 19,314 |
Loans Payable - Schedule of Loa
Loans Payable - Schedule of Loans Payable (Details) - USD ($) | Jun. 30, 2017 | Jun. 06, 2017 | Feb. 22, 2017 | Dec. 31, 2016 | |||
Debt Disclosure [Abstract] | |||||||
Short-term loan (a) below | [1] | $ 11,840 | $ 14,069 | ||||
Short-term loan, related party (a) below | [1] | 101,911 | 120,374 | ||||
Senior Secured Revolving Note (b) below | [2] | 1,368,832 | 1,657,942 | ||||
Factoring loan (c) below | 22,739 | [3] | $ 126,900 | $ 61,098 | [3] | ||
Payment rights loan (d) below | [4] | 79,200 | |||||
Total loans payable | $ 1,584,522 | $ 1,792,384 | |||||
[1] | In September 2015, we received short-term loans totaling $145,000 of which $130,000 was received from a family trust of our Chief Executive Officer. These loans bear interest at 10%, are unsecured and due on demand. As of August 14, 2017, no demand for repayment has been received. | ||||||
[2] | On November 6, 2015, we entered into a Credit Agreement with TCA Global Credit Master Fund, LP (“TCA”). Under the terms of the Credit Agreement, TCA committed to lend up to $3,500,000 (the “Credit Facility”) pursuant to a senior secured revolving note (the “Note”). TCA has funded to date $1,750,000, $900,000 in fiscal 2015 and $850,000 in fiscal 2017. The Credit Facility is secured by a senior secured interest in all our assets. We are charged a 12% per annum rate of interest plus a 6% per annum administration fee on the daily loan balance outstanding. The Lender has the right, in the Event of Default, to convert any outstanding amounts under the Note into restricted shares of our common stock based on 85% of the weighted value average price of our common shares over the prior 5 trading days prior to conversion. However, the Lender may not convert any portion of the Note to the extent that after giving effect to the shares which would be received on conversion, the Lender would beneficially own more than 4.99% of our common stock. In connection with the Credit Facility and subsequent loans therein, we were obligated to pay a total of $500,000 in investment banking fees to TCA. As security for the initial fee of $150,000 we issued 3,000,000 common shares to TCA. These shares were sold for total proceeds of $119,550 leaving a total balance owing of $380,500. The original maturity of the Note was November 6, 2016. TCA has verbally agreed to extend the maturity date to a future date but as of August 14, 2017 we have not reached an agreement with TCA on this extension. | ||||||
[3] | On February 22, 2017, we sold future receipts totaling $61,098 for proceeds of $44,500 pursuant to a Revenue Based Factoring Agreement dated February 20, 2017. We are required to repay $332 per business day for 184 business days. We have repaid a total of $29,880 to June 30, 2017. The principal owing as at June 30, 2017 of $31,218 is offset by unamortized deferred interest of $8,480. | ||||||
[4] | On June 6, 2017, we entered into a Payment Rights Purchase and Sale Agreement with Everest Business Funding and sold future receipts of $126,900 for net proceeds of $90,000. We are required to repay $846 per business day for 150 business days. We have repaid a total of $15,228 to June 30, 2017. The principal owing as at June 30, 2017 of $111,672 is offset by unamortized deferred interest of $32,472. |
Loans Payable - Schedule of L34
Loans Payable - Schedule of Loans Payable (Details) (Parenthetical) - USD ($) | Jun. 06, 2017 | Feb. 22, 2017 | Jun. 30, 2017 | Dec. 31, 2015 | Dec. 31, 2016 | Nov. 06, 2015 | Sep. 30, 2015 | |||
Short-term debt | [1] | $ 11,840 | $ 14,069 | |||||||
Due to related parties, current | [1] | 101,911 | 120,374 | |||||||
Loans payable, current | 1,584,522 | 1,792,384 | ||||||||
Factoring liability | $ 126,900 | $ 61,098 | 22,739 | [2] | [2] | |||||
Proceeds from factoring agreement | 90,000 | 44,500 | ||||||||
Daily factoring rate per day | $ 846 | $ 332 | ||||||||
Factoring agreement term | 150 days | 184 days | ||||||||
Factoring Agreement [Member] | ||||||||||
Short-term debt | 31,218 | |||||||||
Payments to factoring agreement | 29,880 | |||||||||
Unamortized deferred interest | 8,480 | |||||||||
Payment Rights Purchase and Sale Agreement [Member] | Everest Business Funding [Member] | ||||||||||
Short-term debt | 111,672 | |||||||||
Payments to factoring agreement | 15,228 | |||||||||
Unamortized deferred interest | $ 32,472 | |||||||||
TCA Global Credit Master Fund Credit Facility [Member] | ||||||||||
Debt instrument, interest rate, stated percentage | 12.00% | |||||||||
Line of credit facility, maximum borrowing capacity | $ 3,500,000 | |||||||||
Line of credit facility, commitment fee percentage | 6.00% | |||||||||
Common stock value, percent weighted average value of share price | 85.00% | |||||||||
Common stock owned by lender, maximum threshold | 4.99% | |||||||||
Debt instrument, fee amount | $ 500,000 | |||||||||
TCA Global Credit Master Fund Credit Facility [Member] | TCA Global Credit Master Fund [Member] | ||||||||||
Line of credit, facility fee | $ 150,000 | |||||||||
Stock issued during period, shares, restricted stock award, gross | 3,000,000 | |||||||||
Proceeds from sale of stock | $ 119,550 | |||||||||
Loans payable, current | $ 380,500 | |||||||||
Debt maturity date | Nov. 6, 2016 | |||||||||
TCA Global Credit Master Fund Credit Facility [Member] | Senior Secured Revolving Note [Member] | ||||||||||
Proceeds from lines of credit | $ 850,000 | $ 1,750,000 | ||||||||
TCA Global Credit Master Fund Credit Facility [Member] | Senior Secured Revolving Note One [Member] | ||||||||||
Proceeds from lines of credit | $ 900,000 | |||||||||
Unsecured, Short Term Loans [Member] | Chief Executive Officer [Member] | ||||||||||
Short-term debt | $ 145,000 | |||||||||
Due to related parties, current | $ 130,000 | |||||||||
Debt instrument, interest rate, stated percentage | 10.00% | |||||||||
[1] | In September 2015, we received short-term loans totaling $145,000 of which $130,000 was received from a family trust of our Chief Executive Officer. These loans bear interest at 10%, are unsecured and due on demand. As of August 14, 2017, no demand for repayment has been received. | |||||||||
[2] | On February 22, 2017, we sold future receipts totaling $61,098 for proceeds of $44,500 pursuant to a Revenue Based Factoring Agreement dated February 20, 2017. We are required to repay $332 per business day for 184 business days. We have repaid a total of $29,880 to June 30, 2017. The principal owing as at June 30, 2017 of $31,218 is offset by unamortized deferred interest of $8,480. |
Convertible Notes - Schedule of
Convertible Notes - Schedule of Convertible Notes (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 | Oct. 07, 2016 | ||
Less discounts | $ (364,617) | $ (78,725) | |||
Net carrying value | 164,670 | 2,025 | |||
Convertible Debt [Member] | |||||
Face value of convertible notes | 529,287 | [1],[2],[3],[4],[5],[6] | 80,750 | [1],[2],[3],[4],[5],[6] | $ 80,750 |
Less discounts | (364,617) | (80,750) | |||
Revaluation of notes | 9,630 | ||||
Convertible debt current gross | 164,670 | 9,630 | |||
Less: unamortized debt issuance costs | (7,605) | $ (7,500) | |||
Net carrying value | $ 164,670 | $ 2,025 | |||
[1] | On April 3, 2017, we entered into an additional financing arrangement with Old Main Capital, LLC, (“Old Main”), and delivered an installment Convertible Promissory Note (the “Note”) to Old Main. Under the terms of the Note, Old Main loaned us $200,000 on April 4, 2017 and an additional $50,000 on April 26, 2017. Each loan under the Note is due nine months from date of advance and bears interest at 10% per annum. In addition, pursuant to an original issue discount provision, the principle of the Note was increased above the $250,000 received by us to $294,117, which provides additional consideration to the Lender. In addition, the principle and accrued interest on the Note is convertible in whole or in part at the option of Old Main into our common shares at a conversion price per share equal to 65% of the average of the two lowest traded prices for our common shares in the 30 days preceding conversion. We have reserved 500,000,000 common shares for future issuances and have accrued interest of $9,110 as at June 30, 2017; and | ||||
[2] | On January 11, 2017, we borrowed $43,000 (“Power Up Loan #1”) from Power Up Lending Group, Ltd (Power Up). The Power Up Loan #1 is evidenced by a promissory note which bears interest at 8% per annum and due on October 17, 2017. On July 10, 2017 Power Up may convert Power Up Loan #1 into common shares. On March 10, 2017, we borrowed an additional $30,000 (“Power Up Loan #2) from Power Up which is evidenced by a promissory note bearing interest at 8% per annum, due on December 30, 2017. On June 20, 2017, we borrowed an additional $33,000 (“Power Up Loan #3) from Power Up which is evidenced by a promissory note bearing interest at 8% per annum, due on December 30, 2017. On July 10, 2017 Power Up may convert Power Up Loan #1 into common shares and on September 6, 2017 Power Up may convert Power Up Loan #2 into our common shares and on December 20, 2017 Power Up may convert Power Up Loan #3 into our common shares. The conversion price of these three loans is 61% of the average of the three lowest trading prices of our common shares during the 15-day trading period ending on the last trading day prior to the date of conversion. The derivative treatment would not become applicable until the promissory notes become convertible on July 10, 2017, September 6, 2017 and December 20, 2017, respectively. As at June 30, 2017, the carrying value of the three notes was $106,000. We have reserved a total of 481,936,497 shares for future issuance upon conversion of the notes. See Subsequent Events for subsequent conversion of Power Up Loan #1 of $43,000 plus accrued interest of $1,770 into 46,572,647 common shares at an average conversion price of $0.001 per share; | ||||
[3] | On January 25, 2017, we entered into a Settlement Agreement with certain creditors whereby Rockwell Capital Inc. purchased debts from our creditors totaling $250,738 (the “Claim Amount”). In return Rockwell Capital Inc. can convert the Claim Amount into free-trading common shares pursuant to Section 3(a) (10) of the Securities Act at a 40% discount of the 3 lowest traded prices over the prior 10 days. As at March 28, 2017 the Claim Amount was fully settled and converted into 78,459,168 common shares. In connection with the Settlement Agreement we issued 625,000 common shares having a fair market value of $6,425 for a registered broker dealer to act on our behalf; | ||||
[4] | On January 26, 2017, we entered into a Debt Purchase Agreement (“DPA”) with Old Main Capital, LLC (“Old Main”) to assign up to $1,727,484 of principal owed to TCA Global Credit Master Fund LP (“TCA”) in exchange for up to $1,722,484 pursuant to terms of the DPA. To evidence this DPA we entered into a 10% Senior Replacement Convertible Promissory Note for any purchases made from TCA by Old Main. As at June 30, 2017 Old Main has purchased $313,000 of such debt by paying TCA a total of $313,000 and paying legal fees of $7,000 to legal counsel for Old Main and TCA. Additionally, we were charged a total of $38,000 of default interest over the period from January 26, 2017 to June 30, 2017. The total amount owing under the DPA plus additional legal and interest costs is $358,000. Old Main has the right to convert this amount into our common shares at a 35% discount of the average of the two lowest traded prices in the prior 30 days. As at June 30, 2017, a total of $309,553 was converted into 138,418,874 common shares at an average price of $0.002. The balance owing as at June 30, 2017 was $48,447. See Subsequent Events for future repurchases of TCA debt and conversions of debt into common shares. We had reserved 363,673,353 common shares for future issuances of which a balance of 10,200,000 remains unused; | ||||
[5] | On June 22, 2017, we entered into a Securities Purchase Agreement with Crossover Capital Fund II LLC (the “Crossover Agreement”). The Crossover Agreement represents two 10% convertible notes in the amount of $58,333 each for a total funding of $116,666. We issued Crossover Capital Note #1 on June 22, 2017 and received $50,000, after an original issue discount of $5,833 and debt issuance costs of $2,500. The maturity date of this note is March 22, 2018 and interest accrues at 10%. Crossover Capital Fund II LLC is entitled to convert this note into our common shares at a conversion price equal to 62% of the average of the three lowest trading prices of our common stock for the twenty prior trading days prior to and including the conversion date. We have reserved up to 276,170,000 shares for future conversion of this Crossover Agreement. See Subsequent Events for the issuance of Crossover Capital Note #2 for net proceeds of $50,000 on July 24, 2017. | ||||
[6] | On October 7, 2016, we issued a convertible note in the principal amount of $80,750 due on demand on or after October 7, 2017. We received a total amount of $75,000, net of debt issuance costs of $7,500. The note had a cash redemption premium of 115% of the principal amount in the first 30 days following the execution date, of 125% for days 31-90 following the execution date, and 135% after the 91st day. After 180 days, cash redemption is only available upon approval by the holder at a cash redemption premium of 140%. The note carried an interest rate of 9% per annum and was convertible into common shares at a 40% discount to the average of the three lowest trading prices during the previous 20 trading days to the date of conversion. On April 4, 2017 GHS Investments, LLC (“GHS”), pursuant to an Assignment Agreement between us, the lender (See a above), and GHS, satisfied our obligations to the lender in the amount of $118,231 which included principal of $80,750 and accrued regular and default interest of $37,481. GHS has the right to convert this amount into our common shares at a 40% discount of the average of the three lowest traded prices in the prior 20 days. To date a total of $98,728 of principal and $673 of interest was converted into 63,964,905 common shares at an average aggregate price of $0.002. We have reserved 58,000,000 common shares for future issuances. See Subsequent Events for repayment of the balance of $19,395 plus accrued interest; |
Convertible Notes - Schedule 36
Convertible Notes - Schedule of Convertible Notes (Details) (Parenthetical) | Jun. 22, 2017USD ($)shares | Apr. 26, 2017USD ($) | Apr. 04, 2017USD ($) | Apr. 04, 2017USD ($) | Mar. 10, 2017USD ($)Integershares | Jan. 26, 2017USD ($)Integer$ / shares | Jan. 25, 2017USD ($)shares | Jan. 11, 2017USD ($)$ / sharesshares | Oct. 07, 2016USD ($)Integer$ / sharesshares | Apr. 26, 2017USD ($) | Jun. 07, 2016$ / sharesshares | Jun. 30, 2017USD ($)shares | Jun. 30, 2017USD ($)shares | Jun. 30, 2016USD ($) | Apr. 03, 2017 | Dec. 31, 2016USD ($) | |||
Proceeds from convertible debt | $ 30,000 | $ 75,000 | $ 406,000 | ||||||||||||||||
Debt conversion, convertible, discount percentage | 40.00% | 40.00% | |||||||||||||||||
Debt instrument, convertible, trading days used to determine conversion price | 15 days | 10 days | 20 days | ||||||||||||||||
Debt conversion, original debt, amount | $ 250,738 | ||||||||||||||||||
Debt conversion, converted instrument, amount | 659,652 | ||||||||||||||||||
Debt conversion, converted instrument, shares issued | shares | 78,459,168 | 200,000 | |||||||||||||||||
Interest payable | $ 19,395 | ||||||||||||||||||
Debt instrument, convertible, conversion price | $ / shares | $ 0.10 | ||||||||||||||||||
Convertible debt, current | $ 164,670 | 164,670 | $ 2,025 | ||||||||||||||||
Debt instrument, convertible, number of lowest trading prices used to determine conversion price | Integer | 3 | ||||||||||||||||||
Debt instrument, unamortized discount | $ 364,617 | 364,617 | 78,725 | ||||||||||||||||
Convertible Promissory Note Due October 17, 2017 [Member] | |||||||||||||||||||
Proceeds from convertible debt | $ 43,000 | $ 33,000 | |||||||||||||||||
Debt instrument, interest rate, stated percentage | 8.00% | 8.00% | 8.00% | ||||||||||||||||
Debt instrument, convertible, trading days used to determine conversion price | 15 days | ||||||||||||||||||
Debt conversion, converted instrument, amount | $ 43,000 | ||||||||||||||||||
Debt conversion, converted instrument, shares issued | shares | 46,572,647 | ||||||||||||||||||
Interest payable | $ 1,770 | ||||||||||||||||||
Debt instrument, convertible, conversion price | $ / shares | $ 0.001 | ||||||||||||||||||
Number of unused | shares | 0.001 | ||||||||||||||||||
Convertible Promissory Note Due December 30, 2017 [Member] | |||||||||||||||||||
Debt instrument, interest rate, stated percentage | 8.00% | ||||||||||||||||||
Debt instrument, convertible, conversion price percentage | 61.00% | ||||||||||||||||||
Debt instrument, convertible, number of lowest trading prices used to determine conversion price | Integer | 3 | ||||||||||||||||||
Promissory Note [Member] | |||||||||||||||||||
Debt instrument, face amount | $ 19,314 | $ 19,314 | |||||||||||||||||
Debt carrying value | 106,000 | $ 106,000 | |||||||||||||||||
Convertible Promissory Notes Due on October 17, 2017 and December 30, 2017 [Member] | |||||||||||||||||||
Common stock, capital shares reserved for future issuance | shares | 481,936,497 | ||||||||||||||||||
Senior Replacement Convertible Promissory Note [Member] | Old Main Capital, LLC [Member] | |||||||||||||||||||
Debt instrument, interest rate, stated percentage | 10.00% | ||||||||||||||||||
Debt conversion, convertible, discount percentage | 35.00% | ||||||||||||||||||
Debt instrument, convertible, trading days used to determine conversion price | 30 days | ||||||||||||||||||
Debt conversion, converted instrument, amount | $ 309,553 | ||||||||||||||||||
Debt conversion, converted instrument, shares issued | shares | 138,418,874 | ||||||||||||||||||
Common stock, capital shares reserved for future issuance | shares | 363,673,353 | 363,673,353 | |||||||||||||||||
Debt instrument, amount paid to lender by third party | $ 313,000 | ||||||||||||||||||
Debt instrument, amount of legal fees paid from purchase of debt | 7,000 | ||||||||||||||||||
Interest income expense, net | $ 358,000 | $ 38,000 | |||||||||||||||||
Convertible debt, current | $ 48,447 | $ 48,447 | |||||||||||||||||
Number of unused | shares | 10,200,000 | 10,200,000 | |||||||||||||||||
Debt instrument, convertible, number of lowest trading prices used to determine conversion price | Integer | 2 | ||||||||||||||||||
Debt instrument, gross amount of debt purchased by third party | $ 170,000 | ||||||||||||||||||
Convertible Promissory Note [Member] | Old Main Capital, LLC [Member] | |||||||||||||||||||
Proceeds from convertible debt | $ 50,000 | $ 200,000 | $ 250,000 | ||||||||||||||||
Debt instrument, interest rate, stated percentage | 10.00% | ||||||||||||||||||
Debt conversion, convertible, discount percentage | 65.00% | ||||||||||||||||||
Debt instrument, convertible, trading days used to determine conversion price | 30 days | ||||||||||||||||||
Interest payable | $ 9,110 | $ 9,110 | |||||||||||||||||
Common stock, capital shares reserved for future issuance | shares | 500,000,000 | 500,000,000 | |||||||||||||||||
Debt instrument, amount paid to lender by third party | $ 294,117 | ||||||||||||||||||
GHS Investments, LLC [Member] | |||||||||||||||||||
Debt conversion, original debt, amount | $ 80,750 | ||||||||||||||||||
Debt conversion, converted instrument, amount | 118,231 | ||||||||||||||||||
Interest payable | $ 37,481 | $ 37,481 | |||||||||||||||||
Broker Dealer [Member] | |||||||||||||||||||
Stock issued during period, shares, issued for services | shares | 625,000 | ||||||||||||||||||
Stock issued during period, value, issued for services | $ 6,425 | ||||||||||||||||||
TCA Global Credit Master Fund LP [Member] | |||||||||||||||||||
Debt instrument, interest rate, stated percentage | 10.00% | ||||||||||||||||||
Debt instrument, convertible, conversion price | $ / shares | $ 0.002 | ||||||||||||||||||
Debt instrument, maximum assignable debt | $ 1,727,484 | ||||||||||||||||||
Debt instrument, maximum exchangeable amount | $ 1,722,484 | ||||||||||||||||||
Crossover Capital Fund II LLC [Member] | Convertible Notes One [Member] | Securities Purchase Agreement [Member] | |||||||||||||||||||
Debt instrument, face amount | $ 58,333 | ||||||||||||||||||
Debt instrument, interest rate, stated percentage | 10.00% | ||||||||||||||||||
Crossover Capital Fund II LLC [Member] | Convertible Notes Two [Member] | Securities Purchase Agreement [Member] | |||||||||||||||||||
Debt instrument, face amount | $ 58,333 | ||||||||||||||||||
Debt instrument, interest rate, stated percentage | 10.00% | ||||||||||||||||||
Crossover Capital Fund II LLC [Member] | Two Convertible Notes [Member] | Securities Purchase Agreement [Member] | |||||||||||||||||||
Debt instrument, face amount | $ 116,666 | ||||||||||||||||||
Crossover Capital Fund II LLC [Member] | Crossover Capital Note [Member] | Securities Purchase Agreement [Member] | |||||||||||||||||||
Proceeds from convertible debt | $ 50,000 | ||||||||||||||||||
Debt instrument, interest rate, stated percentage | 10.00% | ||||||||||||||||||
Debt conversion, convertible, discount percentage | 62.00% | ||||||||||||||||||
Common stock, capital shares reserved for future issuance | shares | 276,170,000 | ||||||||||||||||||
Debt instrument, unamortized discount | $ 5,833 | ||||||||||||||||||
Debt issuance costs | $ 2,500 | ||||||||||||||||||
Debt maturity date | Mar. 22, 2018 | ||||||||||||||||||
Crossover Capital Fund II LLC [Member] | Crossover Capital Note [Member] | Securities Purchase Agreement [Member] | July 24, 2017 [Member] | |||||||||||||||||||
Proceeds from issuance of equity | $ 50,000 | ||||||||||||||||||
Convertible Debt [Member] | |||||||||||||||||||
Debt instrument, face amount | $ 80,750 | $ 529,287 | [1],[2],[3],[4],[5],[6] | $ 529,287 | [1],[2],[3],[4],[5],[6] | 80,750 | [1],[2],[3],[4],[5],[6] | ||||||||||||
Debt issuance costs, gross | $ 7,500 | 7,605 | |||||||||||||||||
Debt instrument, interest rate, stated percentage | 9.00% | ||||||||||||||||||
Interest payable | $ 673 | ||||||||||||||||||
Debt instrument, convertible, conversion price | $ / shares | $ 0.002 | ||||||||||||||||||
Common stock, capital shares reserved for future issuance | shares | 58,000,000 | ||||||||||||||||||
Convertible debt, current | 164,670 | 164,670 | 2,025 | ||||||||||||||||
Debt instrument, unamortized discount | $ 364,617 | $ 364,617 | $ 80,750 | ||||||||||||||||
Convertible Debt [Member] | Debt Instrument, Redemption, Period One [Member] | |||||||||||||||||||
Debt instrument, redemption price, percentage | 115.00% | ||||||||||||||||||
Convertible Debt [Member] | Debt Instrument, Redemption, Period Two [Member] | |||||||||||||||||||
Debt instrument, redemption price, percentage | 125.00% | ||||||||||||||||||
Debt conversion, original debt, amount | $ 98,728 | ||||||||||||||||||
Debt conversion, converted instrument, shares issued | shares | 63,964,905 | ||||||||||||||||||
Convertible Debt [Member] | Debt Instrument, Redemption, Period Three [Member] | |||||||||||||||||||
Debt instrument, redemption price, percentage | 135.00% | ||||||||||||||||||
Convertible Debt [Member] | Debt Instrument, Redemption, Period Four [Member] | |||||||||||||||||||
Debt instrument, redemption price, percentage | 140.00% | ||||||||||||||||||
[1] | On April 3, 2017, we entered into an additional financing arrangement with Old Main Capital, LLC, (“Old Main”), and delivered an installment Convertible Promissory Note (the “Note”) to Old Main. Under the terms of the Note, Old Main loaned us $200,000 on April 4, 2017 and an additional $50,000 on April 26, 2017. Each loan under the Note is due nine months from date of advance and bears interest at 10% per annum. In addition, pursuant to an original issue discount provision, the principle of the Note was increased above the $250,000 received by us to $294,117, which provides additional consideration to the Lender. In addition, the principle and accrued interest on the Note is convertible in whole or in part at the option of Old Main into our common shares at a conversion price per share equal to 65% of the average of the two lowest traded prices for our common shares in the 30 days preceding conversion. We have reserved 500,000,000 common shares for future issuances and have accrued interest of $9,110 as at June 30, 2017; and | ||||||||||||||||||
[2] | On January 11, 2017, we borrowed $43,000 (“Power Up Loan #1”) from Power Up Lending Group, Ltd (Power Up). The Power Up Loan #1 is evidenced by a promissory note which bears interest at 8% per annum and due on October 17, 2017. On July 10, 2017 Power Up may convert Power Up Loan #1 into common shares. On March 10, 2017, we borrowed an additional $30,000 (“Power Up Loan #2) from Power Up which is evidenced by a promissory note bearing interest at 8% per annum, due on December 30, 2017. On June 20, 2017, we borrowed an additional $33,000 (“Power Up Loan #3) from Power Up which is evidenced by a promissory note bearing interest at 8% per annum, due on December 30, 2017. On July 10, 2017 Power Up may convert Power Up Loan #1 into common shares and on September 6, 2017 Power Up may convert Power Up Loan #2 into our common shares and on December 20, 2017 Power Up may convert Power Up Loan #3 into our common shares. The conversion price of these three loans is 61% of the average of the three lowest trading prices of our common shares during the 15-day trading period ending on the last trading day prior to the date of conversion. The derivative treatment would not become applicable until the promissory notes become convertible on July 10, 2017, September 6, 2017 and December 20, 2017, respectively. As at June 30, 2017, the carrying value of the three notes was $106,000. We have reserved a total of 481,936,497 shares for future issuance upon conversion of the notes. See Subsequent Events for subsequent conversion of Power Up Loan #1 of $43,000 plus accrued interest of $1,770 into 46,572,647 common shares at an average conversion price of $0.001 per share; | ||||||||||||||||||
[3] | On January 25, 2017, we entered into a Settlement Agreement with certain creditors whereby Rockwell Capital Inc. purchased debts from our creditors totaling $250,738 (the “Claim Amount”). In return Rockwell Capital Inc. can convert the Claim Amount into free-trading common shares pursuant to Section 3(a) (10) of the Securities Act at a 40% discount of the 3 lowest traded prices over the prior 10 days. As at March 28, 2017 the Claim Amount was fully settled and converted into 78,459,168 common shares. In connection with the Settlement Agreement we issued 625,000 common shares having a fair market value of $6,425 for a registered broker dealer to act on our behalf; | ||||||||||||||||||
[4] | On January 26, 2017, we entered into a Debt Purchase Agreement (“DPA”) with Old Main Capital, LLC (“Old Main”) to assign up to $1,727,484 of principal owed to TCA Global Credit Master Fund LP (“TCA”) in exchange for up to $1,722,484 pursuant to terms of the DPA. To evidence this DPA we entered into a 10% Senior Replacement Convertible Promissory Note for any purchases made from TCA by Old Main. As at June 30, 2017 Old Main has purchased $313,000 of such debt by paying TCA a total of $313,000 and paying legal fees of $7,000 to legal counsel for Old Main and TCA. Additionally, we were charged a total of $38,000 of default interest over the period from January 26, 2017 to June 30, 2017. The total amount owing under the DPA plus additional legal and interest costs is $358,000. Old Main has the right to convert this amount into our common shares at a 35% discount of the average of the two lowest traded prices in the prior 30 days. As at June 30, 2017, a total of $309,553 was converted into 138,418,874 common shares at an average price of $0.002. The balance owing as at June 30, 2017 was $48,447. See Subsequent Events for future repurchases of TCA debt and conversions of debt into common shares. We had reserved 363,673,353 common shares for future issuances of which a balance of 10,200,000 remains unused; | ||||||||||||||||||
[5] | On June 22, 2017, we entered into a Securities Purchase Agreement with Crossover Capital Fund II LLC (the “Crossover Agreement”). The Crossover Agreement represents two 10% convertible notes in the amount of $58,333 each for a total funding of $116,666. We issued Crossover Capital Note #1 on June 22, 2017 and received $50,000, after an original issue discount of $5,833 and debt issuance costs of $2,500. The maturity date of this note is March 22, 2018 and interest accrues at 10%. Crossover Capital Fund II LLC is entitled to convert this note into our common shares at a conversion price equal to 62% of the average of the three lowest trading prices of our common stock for the twenty prior trading days prior to and including the conversion date. We have reserved up to 276,170,000 shares for future conversion of this Crossover Agreement. See Subsequent Events for the issuance of Crossover Capital Note #2 for net proceeds of $50,000 on July 24, 2017. | ||||||||||||||||||
[6] | On October 7, 2016, we issued a convertible note in the principal amount of $80,750 due on demand on or after October 7, 2017. We received a total amount of $75,000, net of debt issuance costs of $7,500. The note had a cash redemption premium of 115% of the principal amount in the first 30 days following the execution date, of 125% for days 31-90 following the execution date, and 135% after the 91st day. After 180 days, cash redemption is only available upon approval by the holder at a cash redemption premium of 140%. The note carried an interest rate of 9% per annum and was convertible into common shares at a 40% discount to the average of the three lowest trading prices during the previous 20 trading days to the date of conversion. On April 4, 2017 GHS Investments, LLC (“GHS”), pursuant to an Assignment Agreement between us, the lender (See a above), and GHS, satisfied our obligations to the lender in the amount of $118,231 which included principal of $80,750 and accrued regular and default interest of $37,481. GHS has the right to convert this amount into our common shares at a 40% discount of the average of the three lowest traded prices in the prior 20 days. To date a total of $98,728 of principal and $673 of interest was converted into 63,964,905 common shares at an average aggregate price of $0.002. We have reserved 58,000,000 common shares for future issuances. See Subsequent Events for repayment of the balance of $19,395 plus accrued interest; |
Derivative Liabilities - Summar
Derivative Liabilities - Summary of Changes in Fair Value (Details) - Embedded Conversion Option [Member] - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Balance, beginning | $ 93,206 | |
Original discount limited to proceeds of notes | 957,796 | 80,750 |
Fair value of derivative liabilities in excess of note proceeds received | 725,010 | 9,825 |
Change in fair value of embedded conversion option | 176,753 | 2,631 |
Conversion of derivative liability | (1,255,703) | |
Balance, ending | $ 697,063 | $ 93,206 |
Derivative Liabilities - Schedu
Derivative Liabilities - Schedule of Assumptions (Details) | 6 Months Ended |
Jun. 30, 2017 | |
Expected Dividend Yield | 0.00% |
Embedded Conversion Option [Member] | |
Expected Dividend Yield | 0.00% |
Minimum [Member] | |
Expected Volatility | 259.00% |
Risk-free Interest Rate | 1.14% |
Expected Life (Year) | 6 months 3 days |
Minimum [Member] | Embedded Conversion Option [Member] | |
Expected Volatility | 133.00% |
Risk-free Interest Rate | 0.52% |
Expected Life (Year) | 1 month 24 days |
Maximum [Member] | |
Expected Volatility | 301.00% |
Risk-free Interest Rate | 1.24% |
Expected Life (Year) | 1 year |
Maximum [Member] | Embedded Conversion Option [Member] | |
Expected Volatility | 269.00% |
Risk-free Interest Rate | 1.24% |
Expected Life (Year) | 1 year |
Common Stock (Details Narrative
Common Stock (Details Narrative) - USD ($) | Mar. 13, 2017 | Jan. 25, 2017 | May 11, 2016 | Apr. 12, 2016 | Jan. 31, 2016 | Jun. 07, 2016 | Feb. 29, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Apr. 24, 2017 | Dec. 31, 2016 |
Common stock, shares authorized | 5,000,000,000 | 5,000,000,000 | 5,000,000,000 | 5,000,000,000 | 5,000,000,000 | ||||||||||
Debt conversion, converted instrument, amount | $ 659,652 | ||||||||||||||
Debt conversion, converted instrument, shares issued | 78,459,168 | 200,000 | |||||||||||||
Debt conversion price per share | $ 0.10 | ||||||||||||||
Stock issued during period, shares, settlement of debt | 200,000 | ||||||||||||||
Extinguishment of debt, amount | $ 2,000 | ||||||||||||||
Stock issued during the period, settlement of debt, value per share | $ 0.01 | ||||||||||||||
On or Before September 11 2016 [Member] | |||||||||||||||
Stock issued during period, shares, issued for services | 250,000 | ||||||||||||||
Consultant Agreement [Member] | |||||||||||||||
Stock issued during period, shares, issued for services | 250,000 | ||||||||||||||
Stock issued during period, value, issued for services | $ 29,792 | ||||||||||||||
Stock issued during period, average fair value per share, issued for services | $ 0.12 | ||||||||||||||
Strategic Advisory and Services Agreement [Member] | |||||||||||||||
Stock issued during period, shares, issued for services | 250,000 | ||||||||||||||
Stock issued during period, average fair value per share, issued for services | $ 0.15 | ||||||||||||||
Common Stock [Member] | |||||||||||||||
Debt conversion, converted instrument, amount | $ 120,000 | ||||||||||||||
Debt conversion, converted instrument, shares issued | 1,000,000 | ||||||||||||||
Employment Contract With An Officer/Director [Member] | |||||||||||||||
Stock issued during period, average fair value per share, issued for services | $ 0.08 | ||||||||||||||
Stock issued during period, shares, new issues | 238,889 | 238,889 | |||||||||||||
Stock issued during period, value, new issues | $ 40,611 | $ 16,844 | |||||||||||||
Service Provider Pursuant to a Consultant Agreement [Member] | |||||||||||||||
Stock issued during period, shares, issued for services | 500,000 | ||||||||||||||
Stock issued during period, value, issued for services | $ 5,000 | ||||||||||||||
Stock issued during period, average fair value per share, issued for services | $ 0.01 | ||||||||||||||
Former Advisory Board [Member] | |||||||||||||||
Stock issued during period, shares, issued for services | 50,000 | ||||||||||||||
Stock issued during period, value, issued for services | $ 3,875 | ||||||||||||||
Old Main Debt [Member] | |||||||||||||||
Debt conversion, converted instrument, amount | $ 309,553 | ||||||||||||||
Debt conversion, converted instrument, shares issued | 150,918,874 | ||||||||||||||
Debt conversion price per share | $ 0.002 | $ 0.002 | $ 0.002 | $ 0.002 | |||||||||||
GHS Debt [Member] | |||||||||||||||
Debt conversion, converted instrument, shares issued | 63,964,905 | ||||||||||||||
Debt conversion price per share | $ 0.0015 | $ 0.0015 | 0.0015 | 0.0015 | |||||||||||
Debt principal amount | $ 99,728 | ||||||||||||||
Debt interest amount | $ 673 | ||||||||||||||
Broker Dealer [Member] | |||||||||||||||
Stock issued during period, shares, issued for services | 625,000 | ||||||||||||||
Stock issued during period, value, issued for services | $ 6,425 | ||||||||||||||
Rockwell Capital Inc. [Member] | |||||||||||||||
Debt conversion, converted instrument, amount | $ 250,738 | ||||||||||||||
Debt conversion, converted instrument, shares issued | 78,459,168 | ||||||||||||||
Debt conversion price per share | $ 0.003 | $ 0.003 | $ 0.003 | $ 0.003 | |||||||||||
Minimum [Member] | |||||||||||||||
Common stock, shares authorized | 500,000,000 | ||||||||||||||
Maximum [Member] | |||||||||||||||
Common stock, shares authorized | 5,000,000,000 |
Warrants (Details Narrative)
Warrants (Details Narrative) | Jun. 30, 2017USD ($) |
Warrants | |
Warrants and rights outstanding |
Preferred Stock (Details Narrat
Preferred Stock (Details Narrative) - USD ($) | Apr. 24, 2017 | Dec. 09, 2016 | Jun. 30, 2017 | Dec. 31, 2016 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | ||
Preferred stock, par or stated value per share | $ 0.001 | $ 0.001 | ||
Series A Preferred Stock [Member] | ||||
Preferred stock, shares authorized | 300,000 | |||
Preferred stock, par or stated value per share | $ 0.001 | |||
Preferred stock voting rights | Preferred Share entitles the holder to 1,000 votes on all matters submitted to a vote of our shareholders. | |||
Series A Preferred Stock [Member] | Chief Executive Officer [Member] | ||||
Stock issued during period, shares, new issues | 200,000 | 100,000 | ||
Stock issued during period, value, new issues | $ 800 | $ 400 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Jul. 24, 2017 | Jul. 19, 2017 | Jul. 17, 2017 | Jun. 22, 2017 | Apr. 04, 2017 | Jan. 25, 2017 | Aug. 14, 2017 | Aug. 02, 2017 | Jul. 24, 2017 | Jun. 07, 2016 | Jun. 30, 2017 | Jun. 30, 2016 |
Number of shares issued for debt conversion | 78,459,168 | 200,000 | ||||||||||
Number of shares issued for debt conversion, value | $ 659,652 | |||||||||||
Debt conversion price per share | $ 0.10 | |||||||||||
GHS Investments, LLC [Member] | ||||||||||||
Number of shares issued for debt conversion, value | $ 118,231 | |||||||||||
Securities Purchase Agreement [Member] | Crossover Capital Fund II LLC [Member] | Crossover Capital Note [Member] | ||||||||||||
Debt instrument interest rate | 10.00% | |||||||||||
Debt maturity date | Mar. 22, 2018 | |||||||||||
Number of shares reserved for future conversion | 276,170,000 | |||||||||||
Debt issuance costs | $ 2,500 | |||||||||||
Subsequent Event [Member] | Power Up Loan One [Member] | ||||||||||||
Number of shares issued for debt conversion | 46,572,647 | |||||||||||
Number of shares issued for debt conversion, value | $ 43,000 | |||||||||||
Accrued interest | $ 1,770 | |||||||||||
Debt conversion price per share | $ 0.001 | |||||||||||
Subsequent Event [Member] | JSJ Investments Inc [Member] | Convertible Note [Member] | ||||||||||||
Debt instrument interest rate | 12.00% | |||||||||||
Redeemable note face amount | $ 62,000 | |||||||||||
Debt maturity date | Apr. 19, 2018 | |||||||||||
Common shares conversion price percentage | 40.00% | |||||||||||
Proceeds from notes | $ 50,000 | |||||||||||
Number of shares reserved for future conversion | 453,000,000 | |||||||||||
Original issue discount | $ 10,000 | |||||||||||
Debt issuance costs | $ 2,000 | |||||||||||
Cash redemption premium, percentage | 150.00% | |||||||||||
Subsequent Event [Member] | Crossover Capital Fund II LLC [Member] | Crossover Capital Note [Member] | ||||||||||||
Debt maturity date | Apr. 22, 2018 | |||||||||||
Common shares conversion price percentage | 62.00% | |||||||||||
Number of shares reserved for future conversion | 205,000,000 | 205,000,000 | ||||||||||
Original issue discount | $ 5,833 | |||||||||||
Debt issuance costs | 2,500 | $ 2,500 | ||||||||||
Proceeds from capital | $ 50,000 | |||||||||||
Subsequent Event [Member] | GHS Investments, LLC [Member] | ||||||||||||
Number of shares issued for debt conversion | 18,878,681 | |||||||||||
Repayments of loan | $ 19,395 | |||||||||||
Shares issued price per share | $ 0.001 | $ 0.001 | ||||||||||
Subsequent Event [Member] | Old Main Capital, LLC [Member] | ||||||||||||
Redeemable note face amount | $ 150,000 | |||||||||||
Number of shares reserved for future conversion | 2,200,233,850 | |||||||||||
Number of shares issued for debt conversion | 202,551,479 | |||||||||||
Number of shares issued for debt conversion, value | $ 167,269 | |||||||||||
Debt conversion price per share | $ 0.001 | |||||||||||
Repayments of loan | $ 150,000 | |||||||||||
Number of remaining authorized and unissued and unreserved common shares | 2,166,165,416 | |||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | LG Capital Funding, LLC [Member] | ||||||||||||
Debt instrument interest rate | 8.00% | |||||||||||
Redeemable note face amount | $ 157,500 | |||||||||||
Proceeds from notes financing | 75,000 | |||||||||||
Legal fees | $ 3,750 | |||||||||||
Debt maturity date | Jul. 17, 2018 | |||||||||||
Common shares conversion price percentage | 60.00% | |||||||||||
Number of shares reserved for future conversion | 262,500,000 | |||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | LG Capital Funding, LLC [Member] | Convertible Redeemable Note One [Member] | ||||||||||||
Redeemable note face amount | $ 78,750 | |||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | LG Capital Funding, LLC [Member] | Convertible Redeemable Note Two [Member] | ||||||||||||
Redeemable note face amount | $ 78,750 |