Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 04, 2019 | Jun. 30, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | TransBiotec, Inc. | ||
Entity Central Index Key | 1,425,627 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 116,751,078 | ||
Entity Public Float | $ 722,579 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | |
Current assets | |||
Cash | $ 142 | $ 14,305 | |
Prepaid Expenses | 3,006 | ||
Total current assets | 3,148 | 14,305 | |
Total Assets | 3,148 | 14,305 | |
Current liabilities | |||
Accounts payable | 270,851 | 349,849 | |
Accrued interest payable | 382,302 | 302,834 | |
Notes payable - current - related parties | [1] | 630,575 | 627,022 |
Notes payable - current - non related parties | 163,574 | 163,574 | |
Derivative liability | 180,038 | ||
Stock subscription payable | 28,081 | ||
Related party payables | 1,026,819 | 1,111,754 | |
Other payables | 493,164 | 263,033 | |
Total current liabilities | 2,967,285 | 3,026,185 | |
Total Liabilities | 2,967,285 | 3,026,185 | |
Stockholders' Deficit | |||
Preferred stock, value | |||
Common stock, $.00001 par value; 800,000,000 shares authorized; 109,409,930 and 67,751,068 shares issued and outstanding as of December 31, 2017 and December 31, 2016, respectively | 1,096 | 677 | |
Additional paid in capital | 14,785,051 | 14,095,430 | |
Accumulated deficit | (17,703,171) | (17,064,086) | |
Total Transbiotec, Inc. stockholders' deficit | (2,917,010) | (2,967,979) | |
Noncontrolling interest | (47,127) | (43,901) | |
Total Stockholders' Deficit | (2,964,137) | (3,011,880) | |
Total Liabilities and Stockholders' Deficit | 3,148 | 14,305 | |
Series A Preferred Stock [Member] | |||
Stockholders' Deficit | |||
Preferred stock, value | $ 14 | ||
[1] | Includes unamortized debt issuance costs related to detached warrants of $19,969 and none at December 31, 2017 and December 31, 2016, respectively. |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Stockholders' Deficit | ||
Preferred stock par value | $ 0.00001 | $ .00001 |
Preferred stock shares authorized | 22,000,000 | 22,000,000 |
Preferred stock shares issued | 0 | 0 |
Preferred stock shares outstanding | 0 | 0 |
Common stock par value | $ .00001 | $ .00001 |
Common stock shares authorized | 800,000,000 | 800,000,000 |
Common stock shares issued | 109,409,930 | 67,751,068 |
Common stock shares outstanding | 109,409,930 | 67,751,068 |
Series A Preferred Stock [Member] | ||
Stockholders' Deficit | ||
Preferred stock par value | $ .00001 | $ .00001 |
Preferred stock shares authorized | 3,000,000 | 3,000,000 |
Preferred stock shares issued | 1,388,575 | 0 |
Preferred stock shares outstanding | 1,388,575 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Consolidated Statements Of Operations | ||
Revenues | ||
Operating expenses: | ||
General and administrative | 313,094 | 396,143 |
Total operating expenses | 313,094 | 396,143 |
Loss from operations | (313,094) | (396,143) |
Other income (expense): | ||
Loss on fair value adjustment - derivatives | (12,023) | |
Interest expense | (317,194) | (218,339) |
Interest expense - beneficial conversion feature | 15,250 | |
Total other income (expense) | (329,217) | (203,089) |
Loss before provision for income taxes | (642,311) | (599,232) |
Provision for income tax | ||
Net loss | (642,311) | (599,232) |
Less: Net loss attributable to noncontrolling interest | 3,226 | 4,102 |
Net loss attributable to TranBioTec, Inc. | $ (639,085) | $ (595,130) |
Net loss per share | ||
(Basic and fully diluted) | $ (0.007) | $ (0.009) |
Weighted average number of common shares outstanding | 97,823,538 | 67,320,740 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($) | Common Stock | Preferred Stock | Additional Paid in Capital | Accumulated Deficit | Stockholders' Deficit - TransBiotec Inc. | Total | Noncontrolling Interest |
Beginning balance, Shares at Dec. 31, 2014 | 60,251,068 | ||||||
Beginning balance, Amount at Dec. 31, 2014 | $ 602 | $ 14,353,628 | $ (16,468,956) | $ (2,114,726) | $ (2,154,525) | $ (39,799) | |
Common Stock issued for cash, Shares | 5,000,000 | ||||||
Common Stock issued for cash, Amount | $ 50 | 24,950 | 25,000 | 25,000 | |||
Common Stock issued to settle accounts payable, Shares | 2,500,000 | ||||||
Common Stock issued to settle accounts payable, Amount | $ 25 | 9,725 | 9,750 | 9,750 | |||
Paid in capital - beneficial conversion feature | (21,500) | (21,500) | (21,500) | ||||
Paid in capital - Stock Warrants Amortization | (7,512) | (7,512) | (7,512) | ||||
Paid in capital - Gain on related party debt conversion | (83,823) | (83,823) | (83,823) | ||||
Paid in capital - Reclassification of common share equivalents to derivative liabilities | (180,038) | (180,038) | (180,038) | ||||
Share exchange - noncontrolling interest | (4,102) | (4,102) | |||||
Net loss for the year | (595,130) | (595,130) | (595,130) | ||||
Ending balance, Shares at Dec. 31, 2016 | 67,751,068 | ||||||
Ending balance, Amount at Dec. 31, 2016 | $ 677 | 14,095,430 | (17,064,086) | (2,967,979) | (3,011,880) | (43,901) | |
Common Stock issued for cash, Shares | 7,202,679 | ||||||
Common Stock issued for cash, Amount | $ 72 | 60,128 | 60,200 | 60,200 | |||
Common Stock issued to settle accounts payable, Shares | 2,151,417 | ||||||
Common Stock issued to settle accounts payable, Amount | $ 23 | 11,493 | 11,516 | 11,516 | |||
Common Stock issued to settle non related party debt, Shares | 55,834 | ||||||
Common Stock issued to settle non related party debt, Amount | $ 1 | 18,066 | 18,067 | 18,067 | |||
Common Stock issued due to options exercise, Shares | 32,248,932 | ||||||
Common Stock issued due to options exercise, Amount | $ 323 | 112,548 | 112,871 | 112,871 | |||
Preferred Stock issued for debt, Shares | 1,388,575 | ||||||
Preferred Stock issued for debt, Amount | $ 14 | 14 | 14 | ||||
Paid in capital - Stock Warrants Amortization | 86,955 | 86,955 | 86,955 | ||||
Paid in capital - Gain on related party debt conversion | 182,111 | 182,111 | 182,111 | ||||
Paid in capital - Reclassification of common share equivalents to derivative liabilities | (199,919) | (199,919) | (199,919) | ||||
Paid in capital - Fair Value of Unamortized Stock Warrants | 19,969 | 19,969 | 19,969 | ||||
Paid in capital - Fair Value of Stock Compensation | 6,290 | 6,290 | 6,290 | ||||
Paid in capital - Reclassification of derivative liabilities to common share equivalents | 391,980 | 391,980 | 391,980 | ||||
Share exchange - noncontrolling interest | (3,226) | (3,226) | |||||
Net loss for the year | (639,085) | (639,085) | (639,085) | ||||
Ending balance, Shares at Dec. 31, 2017 | 109,409,930 | 1,388,575 | |||||
Ending balance, Amount at Dec. 31, 2017 | $ 1,096 | $ 14 | $ 14,785,051 | $ (17,703,171) | $ (2,917,010) | $ (2,964,137) | $ (47,127) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Activities: | ||
Net loss | $ (639,085) | $ (595,130) |
Adjustments to reconcile net loss to net cash provided by (used for) operating activities: | ||
Change in fair value of derivative liabilities | 12,023 | |
Note payable benefical conversion expense | (21,500) | |
Stock Warrants Expense | 86,955 | (7,512) |
Stock Based Compensation | 6,290 | 34,750 |
Changes in assets and liabilities: | ||
Prepaid expenses | (3,006) | |
Accounts payable | 103,113 | (272,280) |
Stock subscription payable | 11,516 | (27,801) |
Accrued interest payable | 117,667 | 120,156 |
Related party payable | (84,935) | 615,275 |
Note payable | 6,250 | |
Other payable | 226,905 | 16,319 |
Net cash used for operating activities | (162,557) | (131,473) |
Financing Activities: | ||
Proceeds from shares issuances - related parties | 25,000 | |
Proceeds from shares issuances - non-related parties | 25,200 | |
Proceeds from notes payable - related parties | 98,194 | 137,927 |
Net cash provided by financing activities | 148,394 | 137,927 |
Net Change In Cash | (14,163) | 6,454 |
Cash At The Beginning Of The Period | 14,305 | 7,851 |
Cash At The End Of The Period | 142 | 14,305 |
Schedule Of Non-Cash Investing And Financing Activities: | ||
Debt converted to capital | 130,938 | 9,750 |
Accounts payable converted to capital | 193,627 | |
Reclassification of common share equivalents to derivative liabilities | 199,919 | 180,038 |
Reclassification of derivative liabilities to paid in capital | 391,980 | |
Shares issued for cash received in prior year(s) | 10,000 | 25,000 |
Supplemental Disclosure: | ||
Cash paid for interest | 3,750 | 12,500 |
Cash paid for income taxes |
NOTE 1. ORGANIZATION, OPERATION
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | TransBiotec, Inc. (“TransBiotec – DE”), formerly Imagine Media LTD., was incorporated August, 2007 in the State of Delaware. A corporation also named TransBiotec, Inc. (“TransBiotec – CA”) was formed in the state of California July 4, 2004. Effective September 19, 2011 TransBiotec - DE was acquired by TransBiotec - CA in a transaction classified as a reverse acquisition as the shareholders of TransBiotec - CA retained the majority of the outstanding common stock of TransBiotec - DE after the share exchange. The financial statements represent the activity of TransBiotec - CA from July 4, 2004 forward, and the consolidated activity of TransBiotec - DE and TransBiotec - CA from September 19, 2011 forward. TransBiotec - DE and TransBiotec - CA are hereinafter referred to collectively as the "Company". The Company has developed and plans to market and sell a non-invasive alcohol sensing system which includes an ignition interlock. The Company has not generated any revenues from its operations. Basis of Presentation The accompanying audited consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) as promulgated in the United States of America and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for the presentation of annual financial information. In management’s opinion, the audited consolidated financial statements reflect all adjustments (Including reclassifications and normal recurring adjustments) necessary to present fairly the financial position for the years ended December 31, 2017 and December 31, 2016, and results of operations and cash flows for the years ended December 31, 2017 and December 31, 2016. Principles of consolidation The accompanying audited condensed consolidated financial statements include the accounts of the Company and its majority owned subsidiary, Transbiotec-CA. We have eliminated all intercompany transactions and balances between entities consolidated in these financial statements. Use of Estimates The preparation of audited consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Specifically, such estimates were made by the Company for the valuation of derivative liability, stock compensation and beneficial conversion feature expenses. Actual results could differ from those estimates. Cash The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents. The Company does not have any cash equivalents as of December 31, 2017 and December 31, 2016. Income tax The Company accounts for income taxes pursuant to ASC 740. Under ASC 740 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The Company has not recorded any deferred tax assets or liabilities at December 31, 2017. Net loss per share The basic and fully diluted net loss per share is computed by dividing the net loss by the weighted average number of shares of common outstanding. Financial Instruments Pursuant to ASC Topic 820, Fair Value Measurements and Disclosures Financial Instruments Level Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets: quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Company’s financial instruments consist primarily of cash, accounts payable, accrued expenses, notes payable, related party payables, convertible debentures, and other payable. Pursuant to ASC 820 and 825, the fair value of our cash and cash equivalents is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations. The following table presents assets and liabilities that are measured and recognized at fair value as of December 31, 2017 and December 31, 2016 on a recurring basis: December 31, 2017 Level 1 Level 2 Level 3 $ $ $ Derivative liabilities - - - - - - December 31, 2016 Level 1 Level 2 Level 3 $ $ $ Derivative liabilities - - (180,038 ) - - (180,038 ) Beneficial Conversion Features From time to time, the Company may issue convertible notes that may contain an embedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method. Derivative Instruments The fair value of derivative instruments is recorded and shown separately under current liabilities. Changes in fair value are recorded in the consolidated statement of income under other income (expenses). The accounting treatment of derivative financial instruments requires that the Company record the embedded conversion option at its fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. As a result of entering into warrant agreements, for which such instruments contained a variable conversion feature with no floor, the Company has adopted a sequencing policy in accordance with ASC 815-40-35-12 whereby all future instruments may be classified as a derivative liability with the exception of instruments related to share-based compensation issued to employees or directors. For stock-based derivative financial instruments, the Company uses a weighted average Black-Sholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instruments are initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. Stock based compensation Stock-based compensation cost to employees is measured by the Company at the grant date, based on the fair value of the award, over the requisite service period under ASC718. For options issued to employees, the Company recognizes stock compensation costs utilizing the fair value methodology over the related period of benefit. Grants of stock to non-employees and other parties are accounted for in accordance with the ASC 505-50 “Equity-Based Payments to Non-Employees”. Minority interest (Noncontrolling interest) A subsidiary of the Company has minority members, representing ownership interests of 1.38% at December 31, 2017. The Company accounts for these minority, or noncontrolling interests pursuant to ASC 810-10-65 whereby gains and losses in a subsidiary with a noncontrolling interest are allocated to the noncontrolling interest based on the ownership percentage of the noncontrolling interest, even if that allocation results in a deficit noncontrolling interest balance. Related Parties Related parties are any entities or individuals that, through employment, ownership or other means, possess the ability to direct or cause the direction of the management and policies of the Company. New pronouncements In July 2017, the FASB issued ASU-2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Noncontrolling Interests of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. The first part of this update addresses the complexity of accounting for certain financial instruments with down round features and the second part addresses the complexity of distinguishing equity from liabilities. The guidance is applicable to public business entities for fiscal years beginning after December 15, 2018 and interim periods within those years. We are currently evaluating the potential impact of the adoption of this standard on our consolidated results of operations, financial position and cash flows, and related disclosures. In May 2017, the Financial Accounting Standards Board, (“FASB”) issued Accounting Standards Update (“ASU”) 2017-09, Scope of Modification Accounting, clarifies Topic 718, Compensation – Stock Compensation In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases, which establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are currently evaluating the impact of our pending adoption of the new standard on the consolidated financial statements. The Company has early adopted ASU 2017-24 which simplifies the accounting for certain equity-linked financial instruments and embedded feature with down round features that reduce the exercise price when the pricing of a future round of financing is lower. |
NOTE 2. GOING CONCERN
NOTE 2. GOING CONCERN | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
NOTE 2. GOING CONCERN | The Company has suffered recurring losses from operations and has a working capital deficit and stockholders' deficit, and in all likelihood, will be required to make significant future expenditures in connection with continuing marketing efforts along with general administrative expenses. As of December 31, 2017, the accumulated deficit is $17,703,171, a $142 cash balance, carrying loans of principal and interest in default totaling $1,029,140, current notes payable and interest of $1,196,420 and negative cash flows from operating activities of $162,557. These principal conditions or events, considered in the aggregate, indicates it is probable that the entity will be unable to meet its obligations as they become due within one year after the date the financial statements are issued. As such, there is substantial doubt about the entity’s ability to continue as a going concern. On May 25, 2017, the Company increased their number of unauthorized shares from 100,000,000 to 800,000,000 as they hope to raise additional capital through the sale of its equity securities, through an offering of debt securities, or through borrowings from financial institutions or others, and debt restructure (conversion of debt to equity). By doing so, the Company further hopes to generate revenues from sales of its alcohol sensing and ignition lock systems. The Company is currently engaged in talks with potential sales reps, funding sources, and manufacturers. They may also consider opportunities to create synergy with its SOBR product. Management believes actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern. Management’s plans are speculative at this time, and no formal documentation of these plans nor approvals of such plans have occurred before December 31, 2017. As such, substantial doubt about the entity’s ability to continue as a going concern has not been alleviated as of December 31, 2017. |
NOTE 3. RELATED PARTY TRANSACTI
NOTE 3. RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
NOTE 3. RELATED PARTY TRANSACTIONS | In May 2011, we entered into an employment agreement with Mr. Bennington which expired on December 31, 2017. The employment agreement provided that we would pay Mr. Bennington a salary of $120,000 during the first year of the agreement, $156,000 during the second year of the agreement, $172,000 during the third year of the agreement, $190,000 during the fourth year of the agreement and $208,000 during the fifth year of the agreement. Since the Company was unable to compensate him as stipulated per the agreement, Mr. Bennington agreed to drop his yearly compensation, and resulting yearly accrual, to $120,000 per year with no yearly increases as stipulated in years 2 through 5. In September 2016, before the expiration of Mr. Bennington’s contract, the Company appointed Ivan Braiker as its sole CEO, and Mr. Bennington subsequently took a role as a member of the Board of Directors at a monthly rate of $5,000. In connection with Mr. Braiker’s appointment, Mr. Braiker entered into a letter agreement with us, under which he accrued a monthly retainer of $7,500, to be paid only if we successfully close financing of at least $200,000. Mr. Braiker was also granted options to purchase 1,500,000 shares of our common stock at an exercise price of $0.0045 per share at a fair value of $6,290. In an act of good faith by the Company, Mr. Braiker was paid $15,000 in 2017 in relation to his letter agreement. Effective with his resignation on December 31, 2017, we did not owe, accrue for or pay Mr. Braiker any further compensation as he was unable to secure financing of $200,000 for the Company as stipulated per the letter agreement. Mr. Braiker was not compensated for his services as a member of our Board of Directors. As of December 31, 2017, and December 31, 2016, the Company had payables due to officers, for accrued compensation and services of $474,156 and $511,656, respectively, recorded as a related party payable on the audited consolidated balance sheet. The decrease is related to an adjustment to Ivan Braiker’s accrued compensation when he was unable to secure financing of $200,000 for the Company and subsequently resigned in 2017. No director received full compensation for the fiscal years December 31, 2017 and December 31, 2016. We have no formal plan for compensating our directors for their service in their capacity as directors, although such directors may receive stock options to purchase common shares as awarded by our board of directors or (as to future stock options) a compensation committee which may be established. Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our board of directors. Our board of directors may award special remuneration to any director undertaking any special services on our behalf other than services ordinarily required of a director. On December 3, 2014, Lanphere Law Group, the Company’s largest shareholder, entered into an agreement with the Company to convert 50% of its outstanding accounts payable of $428,668 to a notes payable. This notes payable represents the one half balance in the amount of $214,334 of attorney fees and costs owed up until October 31, 2014. This agreement further provided that the remaining 50% of unpaid legal fees in accounts payable were to be paid and retained as a current payable. In addition, 50% of the attorney fees and costs incurred from November 1, 2014 are to be converted on a monthly basis to common stock at a price of .09 per share until the accounts payable balance for attorney fees is paid current. The Company recorded to equity a total related party gain related to these conversions at the year ended December 31, 2017 and December 31, 2016 of $182,111 and none, respectively. During the year ended December 31, 2017 and December 31, 2016, approximately $45,994 converted to 511,052 common shares and $61,009 converted to 677,871 common shares were recorded to general and administrative expenses, respectively. Per this agreement as of December 31, 2017 and the year ended December 31, 2016, on a cumulative basis, approximately $193,627 of accounts payable was converted into 2,151,417 shares and $147,633 was converted into 1,640,365 shares, respectively. All amounts were recorded to general and administrative expense as incurred. On July 1, 2015, the Company amended the December 3, 2014 note payable agreement with Lanphere Law Group, a related party and the company’s largest shareholder, which forgave $108,000 of the note payable’s principal balance. This debt forgiveness brought down the original principal balance on the note of $214,335 to a new principal balance of $106,335, and a related party gain of $108,000 was recorded to additional paid in capital. This amendment also extended the note payable’s due date to December 2, 2015. The note payable amount of $214,335 was recorded to general and administrative expense as incurred. On March 8, 2017, Lanphere Law Group, a related and party and the Company’s largest shareholder, irrevocably elected to exercise options in order to acquire 32,248,932 shares of the Company’s common stock in exchange for an aggregate exercise price of $112,871 which was used for the deduction of $74,672 of principal and $38,199 of accrued interest related to this note payable. The principal balance of the note after the debt deduction was $31,662 respectively. At December 31, 2017 and December 31, 2016, the principal balance of this note was $31,662 and $106,335, respectively. At December 31, 2017 and December 31, 2016, the accrued interest on this note was $3,168 and $38,198, respectively. The note payable amount of $74,672 was recorded to general and administrative expenses and the $38.199 was recorded to interest expense as incurred. After this exercise, Mr. Lanphere still owns options to acquire an additional 10,818,583 shares of our common stock. The Company entered into a lease agreement with Lanphere Law Group, a related party and the Company’s largest shareholder, whereas the Company is the tenant and is paying monthly rent of $4,100. The term of this operating lease runs from July 1, 2015 to June 30,2019. Rent expense for the years ended December 31, 2017 and December 2016 of $49,200 and $49,200, was recorded to general and administrative expense, respectively. |
NOTE 4. NOTES PAYABLE
NOTE 4. NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
NOTE 4. NOTES PAYABLE | RELATED PARTIES The Company has certain convertible notes payable to related parties that have a principal balance due at December 31, 2017 and December 31, 2016 of $91,000 and $91,000, respectively. These notes carry interest rates ranging from 7% - 9% and have due dates ranging from 1/23/2014 - 4/8/2015. All notes are currently in default and carry a default interest rate of 10%, , and conversion prices ranging from $0.0072 - $0.08 per share. The Company evaluated these convertible notes and determined that, for the embedded conversion option, there was a beneficial conversion value to record. The beneficial conversion feature was amortized over the life of the notes, one year, and were fully amortized at December 31, 2017 and December 31, 2016. No beneficial conversion feature expense was incurred during the years ended December 31, 2017 and December 31, 2016. The Company has certain non-convertible notes payable to related parties that have a principal balance due at December 31, 2017 and December 31, 2016 of $343,700 and $418,372, respectively. These notes carry interest rates ranging from 0% - 10%, and have due dates ranging from 8/03/2012 - 7/23/2016. All notes are currently in default and carry a default interest rate of 10%. The Company has certain notes payable with detached free-standing warrants to related parties that have a principal balance due at December 31, 2017 and December 31, 2016 of $215,844 and $117,650, respectively. These notes carry interest rates ranging from 7% - 10% and have due dates ranging from 8/05/2015 - 12/14/2018. 8 of these notes, carrying a total principal balance of $117,650, are currently in default and carry a default interest rate of 10%. The exercise price for each note payable attached warrant ranges from $0.0044 - $0.016. At year end December 31, 2017 and December 31, 2016, these notes carried outstanding detached free-standing warrants of 16,070,611 and 6,860,544, respectively. The unamortized discount related to these warrants at the year ended December 31, 2017 and December 31, 2016 was $19,969 and none, respectively. At year end December 31, 2017 and December 31, 2016, warrants expense recorded to interest expense was $86,954 and none, respectively. The reason for the increase is at year end December 31, 2016, the Company determined approximately 6,860,544 of these detached free-standing warrants were in excess of the Company’s authorized shares amount of 100,000,000 and were therefore accounted for at fair value under ASC 820, Fair Value Measurements and Disclosures and ASC 825, Financial Instruments. Utilizing Level 3 Inputs, the Company recorded fair market value adjustments for these common shares over the Company’s 100,000,000 authorized shares amount at the year ended December 31, 2016. The fair market value adjustments were calculated utilizing the Black-Sholes method using the following assumptions: risk free rates ranging between 0.23% - 0.85%, dividend yield of 0%, expected life of 1 year, volatility between 256% - 375%. 2017 2016 Convertible Notes Payable 91,000 91,000 Conventional Non-Convertible Notes Payable 312,038 312,038 Notes Payable with detached free-standing warrants 247,506 223,984 Unamortized Discount (19,969 ) - Net Related Party Notes Payable 630,575 627,022 NON- RELATED PARTIES The Company has certain convertible notes payable to non-related parties that have a principal balance due at December 31, 2017 and December 31, 2016 of $137,136 and $137,136, respectively. These notes carry interest rates ranging from 8% - 30%, and have due dates ranging from 2/08/2012 - 3/26/2016. All notes are currently in default and carry a default interest rate of 10%. These notes carry conversion prices ranging from $0.0017- $0.3235688 per share. The Company evaluated these convertible notes and determined that, for the embedded conversion option, there was a beneficial conversion value to record. The beneficial conversion feature was amortized over the life of the note, one year, and were fully amortized at December 31, 2017 and December 31, 2016. No beneficial conversion feature expense was incurred during the years ended December 31, 2017 and December 31, 2016. The Company has certain non-convertible notes payable to non-related parties that have a principal balance due at December 31, 2017 and December 31, 2016 of $21,438 and $21,438, respectively. These notes carry interest rates ranging from 9% - 18% and have due dates ranging from 1/31/2013 - 11/11/2015. All notes are currently in default and carry a default interest rate of 10%. The Company has certain notes payable with detached free-standing warrants to a non-related party that has a principal balance due at December 31, 2017 and December 31, 2016 of $5,000 and $5,000, respectively. This note carries an interest rate of 10%, had a due date of 9/11/2014. This note is currently in default. The exercise price for the attached warrant is $0.019 for a total amount of 50,000 common shares. At year end December 31, 2017 and December 31, 2016, this note carried outstanding detached free-standing warrants of 50,000 and 50,000, respectively. There was no unamortized discount related to these warrants at the year ended December 31, 2017 and December 31, 2016 and no warrants expense recorded as interest expense at December 31, 2017 and December 31, 2016. 2017 2016 Convertible Notes Payable 137,136 137,136 Conventional Non-Convertible Notes Payable 21,438 21,438 Notes Payable with detached free-standing warrants 5,000 5,000 Net Non-Related Party Notes Payable 163,574 163,574 Interest expense under notes payable for the years ended December 31, 2016 and December 31, 2017 was $121,338 and $117,421 respectively. |
NOTE 5. DERIVATIVE LIABILITY
NOTE 5. DERIVATIVE LIABILITY | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
NOTE 5. DERIVATIVE LIABILITY | On March 28, 2017, the Company filed a preliminary information statement (Schedule PRE 14C) with the SEC, reporting that stockholders of the Company owning a majority of the Company’s outstanding voting securities have approved the following action (The “Action”) by written consent dated March 10, 2017, in lieu of a special meeting of a stockholders. (1) To elect (4) directors to serve until the next Annual Meeting of Shareholders and thereafter until their successors are elected and qualified. (2) To approve an amendment to the Company’s Articles of Incorporation to increase the authorized common stock from 100,000,000 shares, par value $0.00001 to 800,000,000 shares of common stock, par value of $0.00001. (3) Approval of the 2017 Transbiotec, Inc. Omnibus Stock Grant and Option Plan (the “Plan”) which authorized 10,000,000 shares of the Company’s common stock, a number equal to ten percent (10%) of the Company’s outstanding common stock on the date the Plan was approved by a majority of the Company’s stockholders, for issuance to Eligible Recipients. The stockholders of the Company owning a majority of the Company’s outstanding voting securities believe this action will help increase the likelihood of raising funds for the Company, although there is no assurance this will occur. The SEC had 10 days from the March 28, 2017 filing date to comment on the Information Statement. The Company did not receive any comments on the Information Statement from the SEC within the 10-day period; filed a definitive information statement (Schedule DEF 14C) with the SEC on April 21, 2017 and mailed on April 26, 2017 to all shareholders of record as of March 27, 2017 (as identified in the certified shareholders list received from the Company’s transfer agent). To complete the action, the Company filed an amendment to its Certificate of Incorporation with the State of Delaware on May 25, 2017, which increased the Company’s authorized shares from 100,000,000 shares to 800,000,000 shares. The Company determined approximately 11,127,182 stock warrants and 2,225,000 stock options granted for common shares, notes convertible into 22,137,880 common shares, and a shares purchase of 3,571,429 common shares, that totaled 38,455,430 common shares were in excess of the Company’s authorized shares amount of 100,000,000 during the year ended December 31, 2017 and were therefore accounted for at fair value under ASC 820, Fair Value Measurements and Disclosures and ASC 825, Financial Instruments. Utilizing Level 3 Inputs, the Company recorded fair market value adjustments for the 38,455,430 common shares over the Company’s 100,000,000 authorized shares amount at December 31, 2017 and the year ended December 31, 2016 of none and $180,038, respectively. The fair market value adjustments were calculated utilizing the Black-Sholes method using the following assumptions: risk free rates ranging between 0.10% - 1.06%, dividend yield of 0%, expected life of 1 year, volatility between 134% - 408%. A summary of the activity of the derivative liability is shown below: Balance at December 31, 2016 (180,038 ) Derivative change due to new issuances (199,919 ) Derivative change due to reclassifications to equity 391,980 Derivative loss due to mark to market adjustment (12,023 ) Balance at December 31, 2017 - |
NOTE 6. INCOME TAXES
NOTE 6. INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
NOTE 6. INCOME TAXES | Deferred income taxes arise from the temporary differences between financial statement and income tax recognition of net operating losses. These loss carryovers are limited under the Internal Revenue Code should a significant change in ownership occur. At December 31, 2016 and 2017 the Company had net operating loss carry forwards of approximately $7,299,000 and $8,198,000 respectively, that may be offset against future taxable income, if any, ratably through 2035. These carry-forwards are subject to review by the Internal Revenue Service. The deferred tax asset of at each date of $1,460,000 and $1,640,000 created by the net operating losses has been offset by a 100% valuation allowance because the likelihood of realization of the tax benefit cannot be determined. The change in the valuation allowance in 2016 and 2017 was $123,000 and $180,000. There is no current or deferred tax expense for the years ended December 31, 2016 and 2017. The Company has not filed tax returns however management believes there are no taxes due as of December 31, 2016 and 2017. The company includes interest and penalties arising from the underpayment of income taxes in the consolidated statements of operations in general and administrative expenses. For the years ended December 31, 2017 and 2016, the Company incurred net losses and therefore has no tax liability. The Company began operations in 2007 and had net operating loss carry-forwards of approximately $8,198,000 that will be carried forward and can be used through the year 2037 to offset future taxable income, In the future, the cumulative net operating loss carry forward for income tax purposes may differ from the cumulative financial statement loss due to timing differences between book and tax reporting. The provision for Federal income tax consists of the following for the years ended December 31, 2017 and 2016: 2017 2016 Income tax benefit attributable to: Net loss (676,147 ) (595,130 ) Permanent differences 142,446 (21,431 ) Valuation allowance 533,701 616,561 Net provision for income tax - - The cumulative tax effect at the expected federal tax rate of 34% of significant items comprising our net deferred tax amount is as follows on December 31, 2017 and 2016: 2017 2016 Deferred tax asset attributable to: Net operating loss carry forward 8,198,000 7.299,000 Valuation allowance (8,198,000 ) (7,299,000 ) Net deferred tax asset - - The cumulative tax effect at the expected state tax rate of 5% of significant items comprising our net deferred tax amount is as follows on December 31, 2017 and 2016: 2017 2016 Deferred tax asset attributable to: Net operating loss carry forward 410,000 365,000 Valuation allowance (410,000 ) (365,000 ) Net deferred tax asset - - Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of approximately $8,198,000 for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited to use in future years. The Company has identified the United States Federal tax returns as its “major” tax jurisdiction. The United States Federal return years 2012 – 2017 are still subject to tax examination by the United States Internal Revenue Service; however, we do not currently have any ongoing tax examinations. |
NOTE 7. STOCK WARRANTS AND STOC
NOTE 7. STOCK WARRANTS AND STOCK OPTIONS | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
NOTE 7. STOCK WARRANTS AND STOCK OPTIONS | The Company accounts for employee stock options and non-employee stock warrants under ASC 718 and ASC 505, whereby option costs are recorded based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable, utilizing the Black Sholes pricing model. Unless otherwise provided for, the Company covers option exercises by issuing new shares. Beginning on December 12, 2012, Michael A. Lanphere, a related party, loaned the Company money for a variety of purposes, some for working capital and some to allow the Company to pay outstanding obligations. Each of these loans was made pursuant to the terms of a Loan Agreement with Promissory Note and Stock Fee (the “Agreements”). Under the terms of Agreements, Mr. Lanphere was not only entitled to repayment of the principal amount loaned to us, with interest, but also what was termed in the Agreements as a “Stock Fee” that the parties are interpreting as a stock warrant, which permits Mr. Lanphere to acquire shares of our common stock in exchange for an exercise price that was estimated based on the date of the loan agreement. The number of shares to be issued to Mr. Lanphere as a Stock Fee under each Agreement was an estimate and varied based on the loan amount and the price of our common stock on the day of the loan and was calculated by this formula: sixty percent (60%) of the loan amount divided by the Company’s stock price on the day of the loan, but at a price per share no higher than two and one-half cents ($0.025). Each Stock Fee is fully vested immediately and expires five (5) years from the date of the loan. Although the Stock Fee could be taken by Mr. Lanphere as a stock grant or a stock warrant, due to the fully vested nature of the Stock Fee, Mr. Lanphere is deemed to beneficially own those shares on the date of each Agreement. The number of warrants outstanding to Mr. Lanphere at December 31, 2017 and December 31, 2016 were 36,997,231 and 6,070,284, respectively. The total outstanding balance of all non-employee stock warrants in TransBioTec, Inc. is 16,120,611 and 39,159,476 at December 31, 2017 and 2016, respectively. The fair value of these options were determined using the Black-Sholes option pricing model based on the following assumptions: Exercise price $0.0035-$0.0190 Dividend yield 0 % Volatility 143%-167 % Risk-free Interest Rate 1.12%-2.16 % Expected life of options 5 Years The following table summarizes the changes in the Company’s outstanding warrants during the year ended December 31, 2017 Warrants Outstanding Number of Shares Exercise Price Per Share Weighted Average Remaining Contractual Life Weighted Average Exercise Price Per Share Aggregate Intrinsic Value Balance at December 31, 2016 39,159,476 $ 0.0035 - 0.0190 3.20 Years $ 0.0041 78,319 Warrants Granted 9,210,067 $ 0.0044 - 0.0160 4.44 Years $ 0.0064 Warrants Exercised 32,248,932 $ 0.0035 Warrants Expired - - Balance at December 31, 2017 16,120,611 $ 0.0035 - 0.0190 4.06 Years $ 0.0066 (51,586 ) Exercisable at December 31, 2016 39,159,476 $ 0.0035 - $0.0190 3.20 Years $ 0.0041 78,319 Exercisable at December 31, 2017 16,120,611 $ 0.0035 - $0.0190 4.06 Years $ 0.0066 (51,586 ) As of December 31, 2017, there were four outstanding stock options to officers, directors, and consultants to purchase 2,225,000 shares of TransBiotec, Inc. common stock. Two of the outstanding options are dated October 1, 2014 at an option price on that day of $0.0062, with option exercise prices of $0.25 and $0.068. The third outstanding option is dated October 27, 2014 at an option price on that day of $0.0066 with an option exercise price of $0.007, and the fourth outstanding option is dated August 15, 2016 at an option price on that day of $0.0045 with an option exercise price of $0.0045. Approximately, $6,750 of account payable will be converted if the options are exercised. These stock options vested upon grant. The fair value of these options were determined to be $10,377 using the Black-Sholes option pricing model based on the following assumptions and recorded to general and administrative expense as incurred: Exercise price $ 0.0045 - $0.025 Dividend yield 0 % Volatility 162%-175 % Risk-free Interest Rate 1.14%-1.55 % Expected life of options 5 Years The following table summarizes the changes in the Company’s outstanding stock options during the year ended December 31, 2017 Options Outstanding Number of Shares Exercise Price Per Share Weighted Average Remaining Contractual Life Weighted Average Exercise Price Per Share Aggregate Intrinsic Value Balance at December 31, 2016 2,225,000 $ 0.0045 - 0.0250 4.00 Years $ 0.0204 (31,818 ) Options Granted - - Options Exercised - - Options Cancelled - - Options Expired - - Balance at December 31, 2017 2,225,000 $ 0.0045 - 0.0250 3.00 Years $ 0.0204 (37,825 ) Exercisable at December 31, 2016 2,225,000 $ 0.0045 - $0.0250 4.00 Years $ 0.0204 (31,818 ) Exercisable at December 31, 2017 2,225,000 $ 0.0045 - $0.0250 3.00 Years $ 0.0204 (37,825 ) Employee stock options The Company had no outstanding employee stock options. |
NOTE 8. COMMON STOCK
NOTE 8. COMMON STOCK | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
NOTE 8. COMMON STOCK | On January 21, 2016, the Company issued for $25,000 cash, 5,000,000 shares of its common stock, with a purchase price of $0.0050 per share. On January 21, 2016, the Company converted $9,750 of its account payable into 2,500,000 issued shares of its common stock, with a purchase price of $0.0039 per share. On March 13, 2017, the Company converted $112,871 of a related party note payable into 32,248,932 issued shares of its common stock at $0.0035 per share. On June 1, 2017, the Company issued for $50,200 cash, 7,171,429 shares of its common stock, with a purchase price of $0.0070 per share. On December 31, 2017, the Company converted $18,067 of a related party payable into 55,834 shares of its common stock with a purchase price of $0.32 per share. On December 31, 2017, the Company issued for $10,000 cash, 31,250 shares of its common stock with a purchase price of $0.32 per share. On December 31, 2017, the Company converted $193,627 of its account payable due to a related party into 2,151,417 issued shares of its common stock, with a purchase price of $0.09 per share. |
NOTE 9. PREFERRED STOCK
NOTE 9. PREFERRED STOCK | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
NOTE 9. PREFERRED STOCK | As of December 31, 2017, the Company issued 1,388,575 shares of their Series A Preferred Stock payable to two related parties. Shares of the Series A Preferred Stock are convertible at a 35% discount rate to the average closing price per share of the Company’s common stock (either as listed on a national exchange or as quoted over-the-market) for the last fifteen (15) trading days immediately prior to conversion. However, no conversions of the Series A Preferred Stock to shares of common stock can occur unless the average closing price per share of the Corporation’s common stock (either as listed on a national exchange or as quoted over-the-market) for the last fifteen (15) trading days immediately prior to conversion is at least Five Cents ($0.05). The shares of Series A Preferred Stock vote on an “as converted” basis. |
NOTE 10. COMMITMENTS AND CONTIN
NOTE 10. COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
NOTE 10. COMMITMENTS AND CONTINGENCIES | Operating Leases The Company leases its office space under a long-term operating lease expiring in June 2019. Rent expense under this lease, including CAM charges, was $52,420 and $52,420 for the years ended December 31, 2016 and December 31, 2017, respectively. As of December 31, 2017, future minimum annual payments under operating lease agreements for years ending December 31 are as follows. 2018 2019 2020 2021 2022 Total Operating leases 49,200 24,600 - - - 73,800 $ 49,200 $ 24,600 $ - $ - $ - $ 73,800 On December 6, 2006, Orange County Valet and Security Patrol, Inc. filed a lawsuit against us in Orange County California State Superior Court for Breach of Contract in the amount of $11,164.00. A default judgment was taken against us in this matter. In mid-2013 we learned the Plaintiff’s perfected the judgment against us, but we have not heard from the Plaintiffs as of February 04, 2019. We currently have one outstanding judgment against us involving a past employee of the company. The matter is under the purview of the State of California, Franchise Tax Board, Industrial Health and Safety Collections. We currently owe approximately $28,786, plus accrued interest, to our ex-employee for unpaid wages under these Orders and are working to get this amount paid off. |
NOTE 11. SUBSEQUENT EVENTS
NOTE 11. SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
NOTE 11. SUBSEQUENT EVENTS | Effective on February 12, 2018, and with the approval of our Board of Directors, TransBiotec, Inc. dismissed Anton & Chia, LLP (“Anton”) as the Company’s independent registered public accounting firm engaged to audit the financial statements. Anton audited the Company’s financial statements, including the Company’s balance sheets as of December 31, 2016, 2015, 2014 and 2013 and our related statements of operations, changes in stockholders’ equity, and statements of cash flows for the period from December 31, 2013 through December 31, 2016. The audit report of Anton on the Company’s financial statements for the periods aforementioned above (the “Audit Period”) did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles, but the reports of Anton, for the Audit Period contained an emphasis of a matter paragraph which indicated conditions existed which raised substantial doubt about our ability to continue as a going concern. On October 29, 2018, TransBiotec, Inc. (“The Company” or “TransBiotec”) entered into a non-binding Letter of Intent (“LOI”) with First Capital Holdings, LLC (“FCH”). The LOI sets forth the terms under which The Company could potentially acquire certain assets related to robotics equipment from FCH in exchange for shares of our common stock equal to 60% of our then outstanding common stock on a fully-diluted basis. The LOI is non-binding and subject to various conditions that must be met in order for the parties to close the transaction, including, but not limited to, (i) TransBiotec being current in its reporting requirements under the Securities Exchange Act of 1934, as amended, (ii) TransBiotec completing a reverse stock split of its common stock such that approximately 8,000,000 shares will be outstanding immediately prior to closing the transaction with no convertible instruments other than as set forth herein, (iii) TransBiotec having no more than $125,000 in outstanding debt, all in the form of convertible notes that mature in two years post-closing and are convertible into shares of TransBiotec common stock at $2.00 per share; (iv) FCH completing any necessary audits and reviews of the financial statements related to the assets by a PCAOB-approved independent registered accounting firm, and (v) the parties executing definitive documents related to the potential transaction. |
NOTE 1. ORGANIZATION, OPERATI_2
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Note 1. Organization Operations And Summary Of Significant Accounting Policies | |
Basis of Presentation | The accompanying audited consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) as promulgated in the United States of America and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for the presentation of annual financial information. In management’s opinion, the audited consolidated financial statements reflect all adjustments (Including reclassifications and normal recurring adjustments) necessary to present fairly the financial position for the years ended December 31, 2017 and December 31, 2016, and results of operations and cash flows for the years ended December 31, 2017 and December 31, 2016. |
Principles of consolidation | The accompanying audited condensed consolidated financial statements include the accounts of the Company and its majority owned subsidiary, Transbiotec-CA. We have eliminated all intercompany transactions and balances between entities consolidated in these financial statements. |
Use of Estimates | The preparation of audited consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Specifically, such estimates were made by the Company for the valuation of derivative liability, stock compensation and beneficial conversion feature expenses. Actual results could differ from those estimates. |
Cash | The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents. The Company does not have any cash equivalents as of December 31, 2017 and December 31, 2016. |
Income tax | The Company accounts for income taxes pursuant to ASC 740. Under ASC 740 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The Company has not recorded any deferred tax assets or liabilities at December 31, 2017. |
Net loss per share | The basic and fully diluted net loss per share is computed by dividing the net loss by the weighted average number of shares of common outstanding. |
Financial Instruments | Pursuant to ASC Topic 820, Fair Value Measurements and Disclosures Financial Instruments Level Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets: quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Company’s financial instruments consist primarily of cash, accounts payable, accrued expenses, notes payable, related party payables, convertible debentures, and other payable. Pursuant to ASC 820 and 825, the fair value of our cash and cash equivalents is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations. The following table presents assets and liabilities that are measured and recognized at fair value as of December 31, 2017 and December 31, 2016 on a recurring basis: December 31, 2017 Level 1 Level 2 Level 3 $ $ $ Derivative liabilities - - - - - - December 31, 2016 Level 1 Level 2 Level 3 $ $ $ Derivative liabilities - - (180,038 ) - - (180,038 ) |
Beneficial Conversion Features | From time to time, the Company may issue convertible notes that may contain an embedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method. |
Derivative Instruments | The fair value of derivative instruments is recorded and shown separately under current liabilities. Changes in fair value are recorded in the consolidated statement of income under other income (expenses). The accounting treatment of derivative financial instruments requires that the Company record the embedded conversion option at its fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. As a result of entering into warrant agreements, for which such instruments contained a variable conversion feature with no floor, the Company has adopted a sequencing policy in accordance with ASC 815-40-35-12 whereby all future instruments may be classified as a derivative liability with the exception of instruments related to share-based compensation issued to employees or directors. For stock-based derivative financial instruments, the Company uses a weighted average Black-Sholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instruments are initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. |
Stock based compensation | Stock-based compensation cost to employees is measured by the Company at the grant date, based on the fair value of the award, over the requisite service period under ASC718. For options issued to employees, the Company recognizes stock compensation costs utilizing the fair value methodology over the related period of benefit. Grants of stock to non-employees and other parties are accounted for in accordance with the ASC 505-50 “Equity-Based Payments to Non-Employees”. |
Minority Interest (Noncontrolling Interest) | A subsidiary of the Company has minority members, representing ownership interests of 1.38% at December 31, 2017. The Company accounts for these minority, or noncontrolling interests pursuant to ASC 810-10-65 whereby gains and losses in a subsidiary with a noncontrolling interest are allocated to the noncontrolling interest based on the ownership percentage of the noncontrolling interest, even if that allocation results in a deficit noncontrolling interest balance. |
Related Parties | Related parties are any entities or individuals that, through employment, ownership or other means, possess the ability to direct or cause the direction of the management and policies of the Company. |
New pronouncements | In July 2017, the FASB issued ASU-2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Noncontrolling Interests of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. The first part of this update addresses the complexity of accounting for certain financial instruments with down round features and the second part addresses the complexity of distinguishing equity from liabilities. The guidance is applicable to public business entities for fiscal years beginning after December 15, 2018 and interim periods within those years. We are currently evaluating the potential impact of the adoption of this standard on our consolidated results of operations, financial position and cash flows, and related disclosures. In May 2017, the Financial Accounting Standards Board, (“FASB”) issued Accounting Standards Update (“ASU”) 2017-09, Scope of Modification Accounting, clarifies Topic 718, Compensation – Stock Compensation In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases, which establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are currently evaluating the impact of our pending adoption of the new standard on the consolidated financial statements. The Company has early adopted ASU 2017-24 which simplifies the accounting for certain equity-linked financial instruments and embedded feature with down round features that reduce the exercise price when the pricing of a future round of financing is lower. |
NOTE 1. ORGANIZATION, OPERATI_3
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Note 1.Organization Operations And Summary Of Significant Accounting Policies Tables Abstract | |
Fair value of assets and liabilities | The following table presents assets and liabilities that are measured and recognized at fair value as of December 31, 2017 and December 31, 2016 on a recurring basis: December 31, 2017 Level 1 Level 2 Level 3 $ $ $ Derivative liabilities - - - - - - December 31, 2016 Level 1 Level 2 Level 3 $ $ $ Derivative liabilities - - (180,038 ) - - (180,038 ) |
NOTE 4. NOTES PAYABLE (Tables)
NOTE 4. NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Related Parties [Member] | |
Schedule of notes payable | 2017 2016 Convertible Notes Payable 91,000 91,000 Conventional Non-Convertible Notes Payable 312,038 312,038 Notes Payable with detached free-standing warrants 247,506 223,984 Unamortized Discount (19,969 ) - Net Related Party Notes Payable 630,575 627,022 |
Non- Related Parties [Member] | |
Schedule of notes payable | 2017 2016 Convertible Notes Payable 137,136 137,136 Conventional Non-Convertible Notes Payable 21,438 21,438 Notes Payable with detached free-standing warrants 5,000 5,000 Net Non-Related Party Notes Payable 163,574 163,574 |
NOTE 6. DERIVATIVE LIABILITY (T
NOTE 6. DERIVATIVE LIABILITY (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Note 6. Derivative Liability | |
Summary of activity of Derivative Liability | A summary of the activity of the derivative liability is shown below: Balance at December 31, 2016 (180,038 ) Derivative change due to new issuances (199,919 ) Derivative change due to reclassifications to equity 391,980 Derivative loss due to mark to market adjustment (12,023 ) Balance at December 31, 2017 - |
NOTE 6. INCOME TAXES (Tables)
NOTE 6. INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
Schedule of provision for income tax | The provision for Federal income tax consists of the following for the years ended December 31, 2017 and 2016: 2017 2016 Income tax benefit attributable to: Net loss (676,147 ) (595,130 ) Permanent differences 142,446 (21,431 ) Valuation allowance 533,701 616,561 Net provision for income tax - - |
Schedule of deferred tax asset | The cumulative tax effect at the expected federal tax rate of 34% of significant items comprising our net deferred tax amount is as follows on December 31, 2017 and 2016: 2017 2016 Deferred tax asset attributable to: Net operating loss carry forward 8,198,000 7.299,000 Valuation allowance (8,198,000 ) (7,299,000 ) Net deferred tax asset - - The cumulative tax effect at the expected state tax rate of 5% of significant items comprising our net deferred tax amount is as follows on December 31, 2017 and 2016: 2017 2016 Deferred tax asset attributable to: Net operating loss carry forward 410,000 365,000 Valuation allowance (410,000 ) (365,000 ) Net deferred tax asset - - |
NOTE 7. STOCK OPTIONS AND SUBSC
NOTE 7. STOCK OPTIONS AND SUBSCRIPTIONS PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Warrant [Member] | |
Summary of stock option activity | The following table summarizes the changes in the Company’s outstanding warrants during the year ended December 31, 2017 Warrants Outstanding Number of Shares Exercise Price Per Share Weighted Average Remaining Contractual Life Weighted Average Exercise Price Per Share Aggregate Intrinsic Value Balance at December 31, 2016 39,159,476 $ 0.0035 - 0.0190 3.20 Years $ 0.0041 78,319 Warrants Granted 9,210,067 $ 0.0044 - 0.0160 4.44 Years $ 0.0064 Warrants Exercised 32,248,932 $ 0.0035 Warrants Expired - - Balance at December 31, 2017 16,120,611 $ 0.0035 - 0.0190 4.06 Years $ 0.0066 (51,586 ) Exercisable at December 31, 2016 39,159,476 $ 0.0035 - $0.0190 3.20 Years $ 0.0041 78,319 Exercisable at December 31, 2017 16,120,611 $ 0.0035 - $0.0190 4.06 Years $ 0.0066 (51,586 ) |
Schedule of stock options valuation assumptions | The fair value of these options were determined using the Black-Sholes option pricing model based on the following assumptions: Exercise price $0.0035-$0.0190 Dividend yield 0 % Volatility 143%-167 % Risk-free Interest Rate 1.12%-2.16 % Expected life of options 5 Years |
Stock option [Member] | |
Summary of stock option activity | Options Outstanding Number of Shares Exercise Price Per Share Weighted Average Remaining Contractual Life Weighted Average Exercise Price Per Share Aggregate Intrinsic Value Balance at December 31, 2016 2,225,000 $ 0.0045 - 0.0250 4.00 Years $ 0.0204 (31,818 ) Options Granted - - Options Exercised - - Options Cancelled - - Options Expired - - Balance at December 31, 2017 2,225,000 $ 0.0045 - 0.0250 3.00 Years $ 0.0204 (37,825 ) Exercisable at December 31, 2016 2,225,000 $ 0.0045 - $0.0250 4.00 Years $ 0.0204 (31,818 ) Exercisable at December 31, 2017 2,225,000 $ 0.0045 - $0.0250 3.00 Years $ 0.0204 (37,825 ) |
Schedule of stock options valuation assumptions | The fair value of these options were determined to be $10,377 using the Black-Sholes option pricing model based on the following assumptions and recorded to general and administrative expense as incurred: Exercise price $ 0.0045 - $0.025 Dividend yield 0 % Volatility 162%-175 % Risk-free Interest Rate 1.14%-1.55 % Expected life of options 5 Years |
NOTE 9. COMMITMENTS AND CONTING
NOTE 9. COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Note 9. Commitments And Contingencies | |
Schedule of future minimum annual payments | As of December 31, 2017, future minimum annual payments under operating lease agreements for years ending December 31 are as follows. 2018 2019 2020 2021 2022 Total Operating leases 49,200 24,600 - - - 73,800 $ 49,200 $ 24,600 $ - $ - $ - $ 73,800 |
NOTE 1. ORGANIZATION, OPERATI_4
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Derivative liabilities | $ (180,038) | |
Level 1 [Member] | ||
Derivative liabilities | ||
Level 2 [Member] | ||
Derivative liabilities | ||
Level 3 [Member] | ||
Derivative liabilities | $ (180,038) |
NOTE 1. ORGANIZATION, OPERATI_5
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 12 Months Ended |
Dec. 31, 2017 | |
Note 1.Organization Operations And Summary Of Significant Accounting Policies Details Narrative Abstract | |
Entity Incorporation, State Country Name | Delaware |
Entity Incorporation, Date of Incorporation | Aug. 31, 2007 |
Noncontrolling ownership interest | 1.38% |
NOTE 2. GOING CONCERN (Details
NOTE 2. GOING CONCERN (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
May 25, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Note 2. Going Concern | |||
Accumulated deficit | $ (17,703,171) | $ (17,064,086) | |
Cash | 142 | ||
Principal and interest | 1,029,140 | ||
Current notes payable and interest | 1,196,420 | ||
Net cash used for operating activities | $ (162,557) | $ (131,473) | |
Sale of equity securities authorized shares description | the Company increased their number of unauthorized shares from 100,000,000 to 800,000,000 as they hope to raise additional capital through the sale of its equity securities, through an offering of debt securities |
NOTE 3. RELATED PARTY TRANSAC_2
NOTE 3. RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Jul. 02, 2015 | Dec. 03, 2014 | Nov. 01, 2014 | Sep. 30, 2016 | May 31, 2011 | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 08, 2017 | Jul. 01, 2015 |
Related party payables | $ 1,026,819 | $ 1,111,754 | |||||||
Rent expense, monthly | 49,200 | 49,200 | |||||||
Payables due to officers, shareholders and former management | 474,156 | 511,656 | |||||||
Outstanding accounts payable conversion percentage into common stock | 50.00% | ||||||||
Common stock conversion price | $ 0.09 | ||||||||
Attorney fees and costs | $ 214,334 | ||||||||
Legal fees in accounts payable, percentages | 50.00% | ||||||||
Attorney fees and costs, percentages | 50.00% | ||||||||
Convertible accounts payable, amount | $ 193,627 | $ 147,633 | |||||||
Convertible accounts payable, shares | 2,151,417 | 1,640,365 | |||||||
Converted amount | $ 45,994 | $ 61,009 | |||||||
Amount converted common shares | 511,052 | 677,871 | |||||||
Exercise price | $ 112,871 | ||||||||
Debt amount | $ 31,662 | $ 106,335 | 74,672 | ||||||
Debt amount after debt forgiveness | $ 31,662 | ||||||||
Acquired shares | 32,248,932 | ||||||||
Gain on related party debt conversion | 182,111 | 0 | |||||||
Accrued interest | 3,168 | 38,198 | $ 38,199 | ||||||
Note payable amount | 74,672 | 74,672 | |||||||
Interest expense | $ (15,250) | ||||||||
Lanphere Law Group [Member] | |||||||||
Outstanding accounts payable | $ 428,668 | ||||||||
Due date | Dec. 2, 2015 | ||||||||
Debt amount | $ 214,335 | ||||||||
Debt forgiven | 108,000 | ||||||||
Debt amount after debt forgiveness | $ 106,335 | ||||||||
Gain on related party debt conversion | $ 108,000 | ||||||||
Acquired additional shares of common stock | 10,818,583 | ||||||||
Lanphere Law Group [Member] | LeaseArrangement [Member] | |||||||||
Rent expense, monthly | $ 4,100 | ||||||||
Term of operating lease description | The term of this operating lease runs from July 1, 2015 to June 30,2019. | ||||||||
Mr. Braiker [Member] | |||||||||
Accrued a monthly retainer amount | $ 7,500 | ||||||||
Common stock option granted | 1,500,000 | ||||||||
Exercise price per share | $ 0.0045 | ||||||||
Fair value amount | $ 6,290 | ||||||||
Accrued compensation description | In September 2016, before the expiration of Mr. Benningtons contract, the Company appointed Ivan Braiker as its sole CEO, and Mr. Bennington subsequently took a role as a member of the Board of Directors at a monthly rate of $5,000. In connection with Mr. Braikers appointment, Mr. Braiker entered into a letter agreement with us, under which he accrued a monthly retainer of $7,500, to be paid only if we successfully close financing of at least $200,000. | ||||||||
Mr. Braiker [Member] | Letter Agreement [Member] | |||||||||
Monthly Salary | $ 15,000 | ||||||||
Accrued compensation description | Effective with his resignation on December 31, 2017, we did not owe, accrue for or pay Mr. Braiker any further compensation as he was unable to secure financing of $200,000 for the Company as stipulated per the letter agreement. | ||||||||
Mr. Bennington [Member] | |||||||||
Monthly Salary | $ 5,000 | ||||||||
Mr. Bennington [Member] | Employment Agreement [Member] | |||||||||
Related party transaction, expiration date | Dec. 31, 2017 | ||||||||
Annual accrual compensation description | Mr. Bennington agreed to drop his yearly compensation, and resulting yearly accrual, to $120,000 per year with no yearly increases as stipulated in years 2 through 5. | ||||||||
Mr. Bennington [Member] | Employment Agreement [Member] | First Year [Member] | |||||||||
Related party payables | $ 120,000 | ||||||||
Mr. Bennington [Member] | Employment Agreement [Member] | Second Year [Member] | |||||||||
Related party payables | 156,000 | ||||||||
Mr. Bennington [Member] | Employment Agreement [Member] | Third Year [Member] | |||||||||
Related party payables | 172,000 | ||||||||
Mr. Bennington [Member] | Employment Agreement [Member] | Fourth Year [Member] | |||||||||
Related party payables | 190,000 | ||||||||
Mr. Bennington [Member] | Employment Agreement [Member] | Fifth Year [Member] | |||||||||
Related party payables | $ 208,000 |
NOTE 4. NOTES PAYABLE (Details)
NOTE 4. NOTES PAYABLE (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Convertible Notes Payable | $ 193,627 | $ 147,633 |
Related Party Notes Payable [Member] | ||
Convertible Notes Payable | 91,000 | 91,000 |
Conventional Non-Convertible Notes Payable | 312,038 | 312,038 |
Notes Payable with detached free-standing warrants | 247,506 | 223,984 |
Unamortized Discount | (19,969) | |
Net Related Party Notes Payable | $ 630,575 | $ 627,022 |
NOTE 4. NOTES PAYABLE (Details
NOTE 4. NOTES PAYABLE (Details 1) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Convertible Notes Payable | $ 193,627 | $ 147,633 |
Non-Related Party Notes Payable [Member] | ||
Convertible Notes Payable | 137,136 | 137,136 |
Conventional Non-Convertible Notes Payable | 21,438 | 21,438 |
Notes Payable with detached free-standing warrants | 5,000 | 5,000 |
Net Non-Related Party Notes Payable | $ 163,574 | $ 163,574 |
NOTE 4. NOTES PAYABLE (Detail_2
NOTE 4. NOTES PAYABLE (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Convertible Notes Payable | $ 193,627 | $ 147,633 |
Beneficial Conversion Feature Interest Expense | (15,250) | |
Dividend yield | 0.00% | |
Expected life | 5 years | |
Minimum [Member] | ||
Risk free interest rate | 1.12% | |
Volatility | 143.00% | |
Maximum [Member] | ||
Risk free interest rate | 2.16% | |
Volatility | 167500.00% | |
Non-Related Party Notes Payable [Member] | ||
Convertible Notes Payable | $ 137,136 | 137,136 |
Default interest rate | 10.00% | |
Non-Related Party Notes Payable [Member] | Minimum [Member] | ||
Note payable due date | Feb. 8, 2012 | |
Interest rate | 8.00% | |
Note payable conversion price per share | $ 0.0017 | |
Non-Related Party Notes Payable [Member] | Maximum [Member] | ||
Note payable due date | Mar. 26, 2016 | |
Interest rate | 30.00% | |
Note payable conversion price per share | $ 0.3235688 | |
Related Party Notes Payable One [Member] | ||
Convertible Notes Payable | $ 215,844 | 117,650 |
Default interest rate | 10.00% | |
Interest expense | $ 86,954 | $ 0 |
Principal payable | $ 117,650 | |
Dividend yield | 0.00% | |
Expected life | 1 year | |
Number of detached free-standing warrants outstanding | 16,070,611 | 6,860,544 |
Unamortized discount | $ 19,969 | $ 0 |
Description for change in detached free standing warrants | The reason for the increase is at year end December 31, 2016, the Company determined approximately 6,860,544 of these detached free-standing warrants were in excess of the Company’s authorized shares amount of 100,000,000 and were therefore accounted for at fair value under ASC 820, Fair Value Measurements and Disclosures and ASC 825, Financial Instruments. Utilizing Level 3 Inputs, the Company recorded fair market value adjustments for these common shares over the Company’s 100,000,000 authorized shares amount at the year ended December 31, 2016. | |
Related Party Notes Payable One [Member] | Minimum [Member] | ||
Note payable due date | Aug. 5, 2015 | |
Interest rate | 7.00% | |
Risk free interest rate | 0.23% | |
Volatility | 256.00% | |
Exercise price | $ 0.0044 | |
Related Party Notes Payable One [Member] | Maximum [Member] | ||
Note payable due date | Dec. 14, 2018 | |
Interest rate | 10.00% | |
Risk free interest rate | 0.85% | |
Volatility | 375.00% | |
Exercise price | $ 0.016 | |
Non-Convertible Notes Payable [Member] | ||
Convertible Notes Payable | $ 343,700 | $ 418,372 |
Default interest rate | 10.00% | |
Non-Convertible Notes Payable [Member] | Minimum [Member] | ||
Note payable due date | Aug. 3, 2012 | |
Interest rate | 0.00% | |
Non-Convertible Notes Payable [Member] | Maximum [Member] | ||
Note payable due date | Jul. 23, 2016 | |
Interest rate | 10.00% | |
Related Party Notes Payable [Member] | ||
Convertible Notes Payable | $ 91,000 | 91,000 |
Default interest rate | 10.00% | |
Unamortized discount | $ 19,969 | |
Related Party Notes Payable [Member] | Minimum [Member] | ||
Note payable due date | Jan. 23, 2014 | |
Interest rate | 7.00% | |
Note payable conversion price per share | $ 0.0072 | $ 0.08 |
Related Party Notes Payable [Member] | Maximum [Member] | ||
Note payable due date | Apr. 8, 2015 | |
Interest rate | 9.00% | |
Notes Payable [Member] | ||
Interest expense | $ 121,338 | $ 117,421 |
Non-Convertible Notes Payable [Member] | Non-Related Party Notes Payable [Member] | ||
Convertible Notes Payable | $ 21,438 | 21,438 |
Default interest rate | 10.00% | |
Principal payable | $ 5,000 | $ 5,000 |
Exercise price | $ 0.019 | |
Number of detached free-standing warrants outstanding | 50,000 | 50,000 |
Common stock shares issuable upon exercise of warrants | 50,000 | |
Non-Convertible Notes Payable [Member] | Non-Related Party Notes Payable [Member] | Minimum [Member] | ||
Note payable due date | Jan. 31, 2013 | |
Interest rate | 9.00% | |
Non-Convertible Notes Payable [Member] | Non-Related Party Notes Payable [Member] | Maximum [Member] | ||
Note payable due date | Nov. 11, 2015 | |
Interest rate | 18.00% |
NOTE 5. DERIVATIVE LIABILITY (D
NOTE 5. DERIVATIVE LIABILITY (Details ) | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Note 5. Derivative Liability | |
Begnning balance | $ (180,038) |
Derivative loss due to new issuances | (199,919) |
Derivative change due to reclassifications to equity | 391,980 |
Derivative loss due to mark to market adjustments | (12,023) |
Ending Balance |
NOTE 5. DERIVATIVE LIABILITY _2
NOTE 5. DERIVATIVE LIABILITY (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||
May 25, 2017 | Mar. 28, 2017 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |
Common shares reserved for future issuance | 38,455,430 | ||||
Common stock shares in excess of authorized shares | 100,000,000 | ||||
Common stock shares authorized | 100,000,000 | 100,000,000 | 800,000,000 | 800,000,000 | |
Common stock par value | $ 0.00001 | $ .00001 | $ .00001 | ||
Common stock increase shares | 800,000,000 | 800,000,000 | |||
Fair market value adjustments related to stock options | $ 180,038 | ||||
Dividend yield | 0.00% | ||||
Expected life | 1 year | ||||
Minimum [Member] | |||||
Risk free interest rate | 0.10% | ||||
Volatility | 134.00% | ||||
Maximum [Member] | |||||
Risk free interest rate | 1.06% | ||||
Volatility | 408.00% | ||||
Share purchase [Member] | |||||
Common shares reserved for future issuance | 3,571,429 | ||||
Convertible notes payable [Member] | |||||
Common shares reserved for future issuance | 22,137,880 | ||||
Stock option [Member] | |||||
Common shares reserved for future issuance | 2,225,000 | ||||
Warrant [Member] | |||||
Common shares reserved for future issuance | 11,127,182 | ||||
Stock grant and option plan [Member] | |||||
Common stock shares authorized | 10,000,000 | ||||
Common stock outstanding, perecantage | 10.00% |
NOTE 6. INCOME TAXES (Details)
NOTE 6. INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income tax benefit attributable to: | ||
Net loss | $ (676,147) | $ (595,130) |
Permanent differences | (676,147) | (595,130) |
Valuation allowance | 533,701 | 616,561 |
Net provision for income tax |
NOTE 6. INCOME TAXES (Details 1
NOTE 6. INCOME TAXES (Details 1) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
State [Member] | ||
Deferred tax asset attributable to: | ||
Net operating loss carry forward | $ 365,000 | $ 410,000 |
Valuation allowance | (365,000) | (410,000) |
Net deferred tax asset | ||
Federal [Member] | ||
Deferred tax asset attributable to: | ||
Net operating loss carry forward | 8,198,000 | 7,299,000 |
Valuation allowance | (8,198,000) | (7,299,000) |
Net deferred tax asset |
NOTE 6. INCOME TAXES (Details N
NOTE 6. INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Carryforward expiration year | 2,035 | |
Deferred tax asset | $ 1,640,000 | $ 1,460,000 |
Rate of net operating losses offset by valuation allowance | 100.00% | |
Change in the valuation allowance | $ 180,000 | 123,000 |
Federal [Member] | ||
Net operating loss carry forward | $ 8,198,000 | 7,299,000 |
Tax rate | 34.00% | |
State [Member] | ||
Net operating loss carry forward | $ 365,000 | $ 410,000 |
Tax rate | 5.00% |
NOTE 7. STOCK OPTIONS AND SUB_2
NOTE 7. STOCK OPTIONS AND SUBSCRIPTIONS PAYABLE (Details) | 12 Months Ended |
Dec. 31, 2017$ / shares | |
Dividend yield | 0.00% |
Expected life of options | 5 years |
Minimum [Member] | |
Exercise price | $ 0.0035 |
Volatility | 143.00% |
Risk-free Interest Rate | 1.12% |
Maximum [Member] | |
Exercise price | $ 0.0190 |
Volatility | 167500.00% |
Risk-free Interest Rate | 2.16% |
NOTE 7. STOCK OPTIONS AND SUB_3
NOTE 7. STOCK OPTIONS AND SUBSCRIPTIONS PAYABLE (Details 1) - Warrant [Member] | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Warrants Outstanding Number of Shares | |
Outstanding at beginning of period | shares | 39,159,476 |
Warrants Granted | shares | 9,210,067 |
Warrants Exercised | shares | 32,248,932 |
Warrants Expired | shares | |
Outstanding at end of period | shares | 16,120,611 |
Exercisable at beginning of period | shares | 39,159,476 |
Exercise Price Per Share | |
Warrants Exercised | $ 0.0035 |
Warrants Expired | |
Outstanding at beginning of period | 3 years 2 months 12 days |
Warrants Granted | 4 years 5 months 9 days |
Outstanding at end of period | 4 years 22 days |
Exercisable at beginning of period | 3 years 2 months 12 days |
Exercisable at end of period | 4 years 5 months 9 days |
Weighted Average Exercise Price Per Share | |
Outstanding at beginning of period | $ 0.0041 |
Warrants Granted | 0.0064 |
Outstanding at end of period | 0.0066 |
Exercisable at beginning of period | 0.0041 |
Exercisable at end of period | $ 0.0066 |
Aggregate Intrinsic Value | |
Outstanding at beginning of period | $ | $ 78,319 |
Outstanding at end of period | $ | (51,586) |
Exercisable at beginning of period | $ | 78,319 |
Exercisable at end of period | $ | $ (51,586) |
Minimum [Member] | |
Exercise Price Per Share | |
Outstanding at beginning of period | $ 0.0035 |
Warrants Granted | 0.0044 |
Outstanding at end of period | 0.0035 |
Exercisable at beginning of period | 0.0035 |
Exercisable at end of period | 0.0035 |
Maximum [Member] | |
Exercise Price Per Share | |
Outstanding at beginning of period | 0.0190 |
Warrants Granted | 0.0160 |
Outstanding at end of period | 0.0190 |
Exercisable at beginning of period | 0.0190 |
Exercisable at end of period | $ 0.0190 |
NOTE 7. STOCK OPTIONS AND SUB_4
NOTE 7. STOCK OPTIONS AND SUBSCRIPTIONS PAYABLE (Details 2) | 12 Months Ended |
Dec. 31, 2017$ / shares | |
Dividend yield | 0.00% |
Expected life of options | 5 years |
Minimum [Member] | |
Exercise price | $ 0.0035 |
Volatility | 143.00% |
Risk-free Interest Rate | 1.12% |
Maximum [Member] | |
Exercise price | $ 0.0190 |
Volatility | 167500.00% |
Risk-free Interest Rate | 2.16% |
Warrant [Member] | |
Dividend yield | 0.00% |
Expected life of options | 5 years |
Warrant [Member] | Minimum [Member] | |
Exercise price | $ 0.0045 |
Volatility | 162.00% |
Risk-free Interest Rate | 1.14% |
Warrant [Member] | Maximum [Member] | |
Exercise price | $ 0.025 |
Volatility | 175.00% |
Risk-free Interest Rate | 1.55% |
NOTE 7. STOCK OPTIONS AND SUB_5
NOTE 7. STOCK OPTIONS AND SUBSCRIPTIONS PAYABLE (Details 3) - Stock Options [Member] | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Warrants Outstanding Number of Shares | |
Outstanding at beginning of period | shares | 2,225,000 |
Options Granted | shares | |
Options Exercised | shares | |
Options Cancelled | shares | |
Options Expired | shares | |
Outstanding at end of period | shares | 2,225,000 |
Exercisable at beginning of period | shares | 2,225,000 |
Exercisable at end of period | shares | 2,225,000 |
Exercise Price Per Share | |
Options Granted | |
Options Exercised | |
Options Cancelled | |
Options Expired | |
Outstanding at beginning of period | 4 years |
Outstanding at end of period | 3 years |
Exercisable at beginning of period | 4 years |
Exercisable at end of period | 3 years |
Weighted Average Exercise Price Per Share | |
Outstanding at beginning of period | $ 0.0204 |
Options Granted | |
Options Exercised | |
Options Cancelled | |
Options Expired | |
Outstanding at end of period | 0.0204 |
Exercisable at beginning of period | 0.0204 |
Exercisable at end of period | $ 0.0204 |
Aggregate Intrinsic Value | |
Outstanding at beginning of period | $ | $ (31,818) |
Outstanding at end of period | $ | (37,825) |
Exercisable at beginning of period | $ | (31,818) |
Exercisable at end of period | $ | $ (37,825) |
Minimum [Member] | |
Exercise Price Per Share | |
Outstanding at beginning of period | $ 0.0045 |
Outstanding at end of period | 0.0045 |
Exercisable at beginning of period | 0.0045 |
Exercisable at end of period | 0.0045 |
Maximum [Member] | |
Exercise Price Per Share | |
Outstanding at beginning of period | 0.0250 |
Outstanding at end of period | 0.0250 |
Exercisable at beginning of period | 0.0250 |
Exercisable at end of period | $ 0.0250 |
NOTE 7. STOCK OPTIONS AND SUB_6
NOTE 7. STOCK OPTIONS AND SUBSCRIPTIONS PAYABLE (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2012 | Dec. 31, 2016 | |
Account payable | $ 270,851 | $ 349,849 | |
Michael A. Lanphere [Member] | |||
Number of warrants outstanding | 36,997,231 | 6,070,284 | |
Non employee stock warrantss [Member] | |||
Number of warrants outstanding | 16,120,611 | 39,159,476 | |
Non employee stock options [Member] | Michael A. Lanphere [Member] | |||
Loan agreement description | The number of shares to be issued to Mr. Lanphere as a Stock Fee under each Agreement was an estimate and varied based on the loan amount and the price of our common stock on the day of the loan and was calculated by this formula: sixty percent (60%) of the loan amount divided by the Company?s stock price on the day of the loan, but at a price per share no higher than two and one-half cents ($0.025). | ||
Expected lives | 5 years | ||
Stock Options [Member] | |||
Stock options outstanding | 2,225,000 | 2,225,000 | |
Expected lives | 4 years | ||
Description for outstanding stock options | Two of the outstanding options are dated October 1, 2014 at an option price on that day of $0.0062, with option exercise prices of $0.25 and $0.068. The third outstanding option is dated October 27, 2014 at an option price on that day of $0.0066 with an option exercise price of $0.007, and the fourth outstanding option is dated August 15, 2016 at an option price on that day of $0.0045 with an option exercise price of $0.0045. | ||
Account payable | $ 6,750 | ||
Fair value stock options vested | $ 10,377 |
NOTE 8. COMMON STOCK (Details N
NOTE 8. COMMON STOCK (Details Narrative) - USD ($) | Jun. 01, 2017 | Mar. 13, 2017 | Dec. 31, 2017 | Jan. 21, 2016 | Dec. 31, 2017 | Dec. 31, 2016 |
Note 8. Common Stock | ||||||
Stock issued for cash, shares | 5,000,000 | |||||
Stock issued for cash, amount | $ 25,000 | $ 60,200 | $ 25,000 | |||
Common stock purchase price per share | $ 0.0050 | |||||
Stock issued to settle accounts payable, shares | 2,151,417 | 2,500,000 | ||||
Stock issued to settle accounts payable, value | $ 193,627 | $ 9,750 | ||||
Debt conversion price per share | $ 0.0070 | $ 0.09 | $ 0.0039 | $ 0.09 | ||
Stock issued to related party, shares | 7,171,429 | 32,248,932 | 55,834 | |||
Stock issued to related party, value | $ 50,200 | $ 112,871 | $ 18,067 | |||
Issued to related party price per share | $ 0.0035 | $ 0.32 | $ 0.32 |
NOTE 9. PREFERRED STOCK (Detail
NOTE 9. PREFERRED STOCK (Details) - shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Preferred stock, shares issued | 0 | 0 |
Series A Preferred Stock [Member] | ||
Preferred stock, shares issued | 1,388,575 | 0 |
Preferred stock conversion description | Shares of the Series A Preferred Stock are convertible at a 35% discount rate to the average closing price per share of the Company’s common stock (either as listed on a national exchange or as quoted over-the-market) for the last fifteen (15) trading days immediately prior to conversion. However, no conversions of the Series A Preferred Stock to shares of common stock can occur unless the average closing price per share of the Corporation’s common stock (either as listed on a national exchange or as quoted over-the-market) for the last fifteen (15) trading days immediately prior to conversion is at least Five Cents ($0.05). The shares of Series A Preferred Stock vote on an “as converted” basis |
NOTE 10. COMMITMENTS AND CONT_2
NOTE 10. COMMITMENTS AND CONTINGENCIES (Details) | Dec. 31, 2017USD ($) |
2,018 | $ 49,200 |
2,019 | 24,600 |
2,020 | |
2,021 | |
2,022 | |
Total | 73,800 |
Operating Leases [Member] | |
2,018 | 49,200 |
2,019 | 24,600 |
2,020 | |
2,021 | |
2,022 | |
Total | $ 73,800 |
NOTE 10. COMMITMENTS AND CONT_3
NOTE 10. COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 06, 2006 | |
Rent expense | $ 52,420 | $ 52,420 | |
Operating lease expiry year | June 2,019 | ||
Orange County Valet and Security Patrol, Inc [Member] | |||
Penalty for breach of contract | $ 11,164 | ||
Accrued interest | $ 28,786 |
NOTE 11. SUBSEQUENT EVENTS (Det
NOTE 11. SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - USD ($) | 1 Months Ended | |
Oct. 28, 2018 | Oct. 29, 2018 | |
Reverse stock split | 8,000,000 | |
Debt maturity period | 2 years | |
Conversion price per share | $ 2 | |
Maximum [Member] | ||
Outstanding debt | $ 125,000 | |
FCH [Member] | ||
Shares exchange percentage for acquisition | 60.00% |