Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2016 | |
Document And Entity Information | |
Entity Registrant Name | United Cannabis Corp |
Entity Central Index Key | 1,436,161 |
Document Type | S1 |
Document Period End Date | Sep. 30, 2016 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Smaller Reporting Company |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | |||
Cash and cash equivalents | $ 14,813 | $ 118,420 | $ 321,353 |
Account receivable, net of collection reserve of $30,000 at September 30, 2016 and $4,340 December 31, 2015, respectively | 28,054 | 53,435 | 6,245 |
Due from related parties | 8,284 | 8,284 | 44,012 |
Prepaid expenses | 56,341 | 177,400 | |
Deferred financing costs, net | 32,400 | ||
Total current assets | 51,151 | 268,880 | 549,010 |
Intangible assets | 32,273 | 32,273 | 18,210 |
Investments in non-marketable securities | 15,125 | 205,275 | 593,750 |
Equity method investments | 88,000 | 88,000 | 138,000 |
Total assets | 186,549 | 594,428 | 1,298,970 |
Current liabilities: | |||
Accounts payable | 61,542 | 104,238 | 27,424 |
Accrued expenses | 362,446 | 928,533 | 550,795 |
Advances from and accrued amounts owed to officers and directors | 81,830 | ||
Derivative liabilities | 547,200 | 383,581 | |
Current portion of deferred revenue | 180,000 | 380,000 | 500,000 |
Notes payable | 600,000 | 775,000 | 775,000 |
Convertible notes payable, net of a $0.0 and $272,793 debt discount, at September 30, 2016 and December 31, 2015, respectively | 331,978 | 108,207 | |
Total current liabilities | 2,164,996 | 2,679,559 | 1,853,219 |
Long term liabilities: | |||
Deferred revenue, net of current portion | 248,750 | 383,750 | 443,750 |
Total liabilities | 2,413,746 | 3,063,309 | 2,296,969 |
STOCKHOLDERS' DEFICIT | |||
Preferred stock, no par value: 10,000,000 authorized; none issued and outstanding | |||
Common stock, no par value, 100,000,000 shares authorized; 47,832,198 and 44,988,500 issued and outstanding at September 30, 2016 and December 31, 2015, respectively | 4,244,085 | 3,039,448 | 1,626,968 |
Accumulated deficit | (6,471,282) | (5,508,329) | (2,624,967) |
Total stockholders' deficit | (2,227,197) | (2,468,881) | (997,999) |
Total liabilities and stockholders' deficit | $ 186,549 | $ 594,428 | $ 1,298,970 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | |||
Account receivable, collection reserve | $ 30,000 | $ 4,340 | |
Convertible notes payable, debt discount | $ 0 | $ 272,793 | |
Preferred stock, no par value | |||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | ||
Preferred stock, shares outstanding | 0 | ||
Common stock, no par value | $ 0 | ||
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 |
Common stock, shares issued | 47,832,198 | 44,988,500 | 44,060,000 |
Common stock, shares outstanding | 47,832,198 | 44,988,500 | 44,060,000 |
Convertible notes payable, debt discount | $ 272,793 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues: | ||||||
Revenues, non-affiliated | $ 264,964 | $ 133,553 | $ 707,660 | $ 531,318 | $ 558,248 | $ 171,957 |
Revenues, affiliate | 4,425 | 4,425 | 14,600 | |||
Total revenues | 264,964 | 133,553 | 707,660 | 535,743 | 562,673 | 186,557 |
Cost of revenues: | ||||||
Cost of revenues-non-affiliated | (68,813) | (22,652) | (252,550) | (129,670) | (75,672) | (7,031) |
Cost of revenues-affiliated | (46,409) | (46,409) | (74,564) | |||
Total cost of revenues | (68,813) | (69,061) | (252,550) | (176,079) | (150,236) | (7,031) |
Gross profit | 196,151 | 64,492 | 455,110 | 359,664 | 412,437 | 179,526 |
Operating expenses | ||||||
General and administrative | 116,811 | 362,194 | 546,272 | 1,414,672 | 1,816,804 | 1,709,040 |
Sales and marketing | 17,100 | 101,962 | ||||
Research and development | 329 | 182,606 | ||||
Total operating expenses | 116,811 | 362,194 | 546,272 | 1,414,672 | 1,834,233 | 1,993,608 |
Loss from operations | 79,340 | (297,702) | (91,162) | (1,055,008) | (1,421,796) | (1,814,082) |
Other income (expense): | ||||||
Interest income | 252 | 37,837 | ||||
Gain (loss) on derivative liabilities | (331,618) | (332,456) | (23,593) | 6,099 | ||
Loss on early extinguishment of debt | (130,423) | |||||
Loss on origination of derivative liability | (12,810) | |||||
Interest expense | (40,044) | (20,353) | (153,438) | (60,396) | (107,748) | (131,479) |
Amortization of debt discount | (266,711) | (82,500) | (161,402) | |||
Gain (loss) on conversion of convertible notes | (4,253) | 11,237 | ||||
Loss on settlement of disputed terms of warrant | (768,602) | (768,602) | (33,635) | |||
Equity in net loss of unconsolidated affiliate | (90,900) | (90,900) | ||||
Loss on investment in non-marketable equity securities | (388,475) | (300,000) | ||||
Total other income (expense), net | (375,915) | (20,353) | (871,791) | (919,898) | (1,461,566) | (595,390) |
Loss from continuing operations before provision for taxes | (296,575) | (318,055) | (962,953) | (1,974,906) | (2,883,362) | (2,409,472) |
Provision for taxes | ||||||
Net loss from discontinued operations | (58,892) | |||||
Net Income (Loss) | $ (296,575) | $ (318,055) | $ (962,953) | $ (1,974,906) | $ (2,883,362) | $ (2,468,364) |
Basic and diluted net loss per share: | ||||||
Continuing operations | $ (0.06) | $ (0.06) | ||||
Discontinued operations | 0 | |||||
Basic loss per common share | $ (0.006) | $ (0.007) | $ (0.021) | $ (0.037) | $ (0.06) | $ (0.06) |
Basic and diluted weighted-average common shares outstanding: | 47,056,060 | 44,925,837 | 45,519,746 | 44,729,886 | 44,793,510 | 38,256,438 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY - USD ($) | Common Stock [Member] | Accumulated Deficit [Member] | Total |
Beginning balance at Dec. 31, 2013 | $ 165,495 | $ (156,603) | $ 8,892 |
Beginning balance, shares at Dec. 31, 2013 | 6,020,000 | ||
Shares issued for conversion of debt | $ 50,000 | 50,000 | |
Shares issued for conversion of debt, shares | 40,000,000 | ||
Shares cancelled, shares | 41,690,000 | ||
Shares issued for license agreement, shares | 38,690,000 | ||
Shares and warrants issued for cash | $ 900,000 | 900,000 | |
Shares and warrants issued for cash, shares | 600,000 | ||
Warrants issued with convertible debt | $ 694,525 | 694,525 | |
Shares issued for services | $ 305,100 | 305,100 | |
Shares issued for services, shares | 400,000 | ||
Purchase and cancellation of warrants | $ (576,152) | (576,152) | |
Shares issued for equity method investments | $ 88,000 | 88,000 | |
Shares issued for equity method investments, shares | 40,000 | ||
Net loss | (2,468,364) | (2,468,364) | |
Ending balance at Dec. 31, 2014 | $ 1,626,968 | (2,624,967) | (997,999) |
Ending balance, shares at Dec. 31, 2014 | 44,060,000 | ||
Shares issued for repurchase of warrant | $ 987,390 | 987,390 | |
Shares issued for repurchase of warrant, shares | 621,000 | ||
Cancellation of warrant | $ (218,788) | (218,788) | |
Cancellation of warrant, shares | |||
Shares issued for services | $ 226,215 | 226,215 | |
Shares issued for services, shares | 307,500 | ||
Stock options issued for compensation | $ 417,663 | 417,663 | |
Stock options issued for compensation, shares | |||
Net loss | (2,883,362) | (2,883,362) | |
Ending balance at Dec. 31, 2015 | $ 3,039,448 | $ (5,508,329) | (2,468,881) |
Ending balance, shares at Dec. 31, 2015 | 44,988,500 | ||
Net loss | (962,953) | ||
Ending balance at Sep. 30, 2016 | $ (2,227,197) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating activities: | ||||
Net loss | $ (962,953) | $ (1,974,906) | $ (2,883,362) | $ (2,468,364) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||
Loss on sale of assets of discontinued operations | 15,704 | |||
Provision for losses on accounts receivable | 24,185 | |||
Amortization of debt discount | 266,711 | 82,500 | 161,402 | |
Amortization of deferred financing costs | 8,700 | |||
Non-cash interest expense | 4,694 | 15,320 | ||
Notes payable issued for debt issuance costs | 46,000 | |||
Loss on origination of derivative liability | 12,810 | |||
Share-based compensation | 118,160 | 642,109 | 1,030,681 | 551,685 |
Loss on revaluation of derivative liabilities | 365,576 | |||
Loss on issue of warrants to cure default on note payable to Slainte Ventures | 92,004 | |||
Loss on modification of note payable to Slainte Ventures | 133,077 | |||
Gain on payoff of convertible note payable to JSJ Investments | (107,592) | |||
Gain on payoff of convertible note payable to Vis Vires Group | (48,939) | |||
Gain on conversion of convertible notes payable | (11,237) | |||
Discount and fees on convertible note | 15,500 | |||
Increase in advances from and accrued amounts owed to officers and directors | 29,330 | 16,981 | ||
Value of non-marketable equity securities recognized as revenue | (135,000) | (180,000) | (150,000) | |
Gain on revaluation of derivative liabilities | (6,099) | |||
Loss on revaluation of derivative liabilities | 23,593 | |||
Loss on non-marketable equity securities | 388,475 | 300,000 | ||
Equity in net loss of unconsolidated affiliate | 90,900 | 90,900 | ||
Loss on extinguishment of debt and repurchase of warrants | 768,602 | 768,602 | 33,635 | |
Changes in operating assets and liabilities: | ||||
Accounts receivable | (279) | (27,715) | (68,263) | (6,245) |
Increase in collection reserve | 25,660 | 19,845 | ||
Decrease in deferred financing costs | 32,400 | |||
Due from related party | (7,543) | (8,284) | (33,238) | |
Prepaid expenses | 56,341 | (7,718) | (3,394) | (6,321) |
Accounts payable and accrued expenses | 72,634 | 310,148 | 195,825 | 144,654 |
Deferred revenue | (335,000) | 200,000 | ||
Net cash provided by (used in) operating activities | (258,607) | (304,297) | (525,148) | (1,189,057) |
Investing activities: | ||||
Purchase of intangible assets | (14,385) | (17,685) | (2,309) | |
Purchase of equity method investments | (50,000) | |||
Net cash provided by (used in) investing activities | (14,385) | (17,685) | (52,309) | |
Financing activities: | ||||
Net proceeds from issuance of notes payable | 761,500 | |||
Net proceeds from issuance of convertible debt and warrants | 339,900 | 225,000 | ||
Repayment of convertible debt and repurchase of warrants | (356,195) | |||
Proceeds from issuance of common shares and warrants | 900,000 | |||
Proceeds from convertible note payable, related party | 316,478 | |||
Advances from officers and directors | 52,500 | |||
Payoff convertible notes | (183,978) | |||
Payments on notes payable | (30,000) | |||
Net cash provided by (used in) financing activities | 155,000 | 339,900 | 1,530,305 | |
Net increase (decrease) in cash | (103,607) | (318,682) | (202,933) | 288,939 |
Cash, beginning of period | 118,420 | 321,353 | 321,353 | 32,414 |
Cash, end of period | 14,813 | 2,671 | 118,420 | 321,353 |
Supplemental schedule of cash flow information: | ||||
Cash paid for interest | ||||
Cash paid for income taxes | ||||
Supplemental disclosure of non-cash investing and financing activities: | ||||
Intangible asset costs included in accounts payable | 12,279 | 15,901 | ||
Non-marketable equity securities received as consideration for future services | 893,750 | |||
Issuance of common stock for equity method investment | 88,000 | |||
Issuance of common stock for services | 214,215 | 47,880 | 83,600 | |
Issuance of common stock for prepaid professional fees | 187,335 | 221,500 | ||
Issuance of common stock for repurchase of warrant | 987,390 | |||
Warrants cancelled | (218,788) | (576,152) | ||
Warrants issued for debt discount | (218,788) | 694,525 | ||
Issuance of stock options for compensation | 417,664 | 417,664 | ||
Issuance of note payable for debt issuance costs | 13,500 | |||
Issuance of convertible note payable for debt issuance costs | 41,000 | 32,500 | ||
Debt conversion feature issued for debt discount | (355,293) | (151,937) | ||
Conversion of note payable, related party, into common stock | 473,965 | 50,000 | ||
Issuance of stock options in exchange for accrued wages payable to officers and directors | 612,512 | |||
Issuance of common stock upon conversion of Tangiers Investment Group convertible note | 473,965 | 50,000 | ||
Reduction of convertible notes payable due to the conversion by Tangiers Investment Group | 220,000 | |||
Decrease in non-marketable securities due to the exchange of 1,100,000 shares of common stock of WeedMD | (190,150) | |||
Reduction of notes payable due to assumption of note payable to WeedMD by unrelated third party in exchange for the exchange of 1,100,000 shares of common stock of WeedMD | 175,000 | |||
Reduction of discount on notes due to revaluation of derivatives | ||||
Accounts payable exchanged for note payable to a third party | 30,000 | |||
Issuance of common stock in settlement of disputed terms of warrant | $ 987,390 |
CONSOLIDATED STATEMENTS OF CAS7
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - WeedMD RX Inc. (''WMD'') [Member] | 9 Months Ended |
Sep. 30, 2016shares | |
Decrease in non-marketable securities | 1,100,000 |
Reduction of notes payable | 1,100,000 |
BUSINESS ORGANIZATION AND NATUR
BUSINESS ORGANIZATION AND NATURE OF OPERATIONS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
BUSINESS ORGANIZATION AND NATURE OF OPERATIONS | NOTE 1 BUSINESS ORGANIZATION AND NATURE OF OPERATIONS Background and Current Operations United Cannabis Corporation ("we", "our", "us", "UCANN", or the Company) a Colorado corporation, was originally formed as a California corporation under the name MySkin, Inc. on November 15, 2007. MySkin was engaged in the business of providing management services to a medical spa in Los Angeles, California which provided various advanced skin care services until March 31, 2014, when this business was sold to the prior President of the Company. In early 2014 we decided to exit the medical spa management business and change our focus to providing products, services and intellectual property to the cannabis industry. On March 26, 2014, we entered into a License Agreement with Earnest Blackmon, Tony Verzura and Chad Ruby pursuant to which Messrs. Blackmon, Verzura and Ruby licensed certain intellectual property to us in exchange for a total of 38,690,000 shares of our common stock. In connection with this transaction: · Messrs. Blackmon, Verzura and Ruby licensed to us all of their knowledge and know-how relating to the design and buildout of cultivation facilities, growing/cultivation systems, seed-to-sale protocols and procedures, products, a genetic catalogue including over 150 different strains, an advanced (non-psychoactive) cannabinoid therapy program called "A.C.T. Now", security, regulatory compliance, and other methods and processes which relate to the cannabis industry. · The territory for this license is the entire world and the license runs in perpetuity. There are no royalty payments under the License Agreement. · Messrs. Blackmon, Verzura and Ruby were appointed to our board of directors effective April 7, 2014. · Mr. Blackmon was elected as our President, Mr. Ruby was elected as Chief Operating Officer and Mr. Verzura was elected as Vice President. · A total of 41,690,000 previously outstanding shares of common stock were cancelled resulting in a total of 43,620,000 shares of common stock outstanding on March 26, 2014. UCANN was formed as a Colorado corporation on March 25, 2014, and on May 2, 2014, MySkin, Inc. merged into UCANN, a wholly-owned subsidiary of MySkin, Inc., for the purpose of changing domicile from California to Colorado and changing the corporation's name to United Cannabis Corporation. On March 31, 2014, we sold all right, title and interest in the tangible and intangible assets, trademarks, customer lists, intellectual property and rights, which we owned and were related to our advanced skin care business since we entered into a new business and no longer had any use for these assets. The assets were sold to MySkin Services, Inc. (MTA), a business partly owned by Marichelle Stoppenhagen, our former officer and director, in exchange for the $15,000 payable which we owed to Ms. Stoppenhagen and/or MTA. In addition, MTA assumed all costs associated with these assets starting on March 31, 2014. Government Regulation As of September 30, 2016, 23 states and the District of Columbia allow their citizens to use medical marijuana, and voters in the states of Colorado, Washington, Oregon, Alaska and the District of Columbia approved ballot measures to legalize cannabis for adult recreational use. The state laws are in conflict with the federal Controlled Substances Act, which makes marijuana use and possession illegal on a national level. The Obama administration has effectively stated that it is not an efficient use of resources to direct federal law enforcement agencies to prosecute those lawfully abiding by state-designated laws allowing the use and distribution of medical and recreational marijuana. However, there is no guarantee that the current administration will not change its stated policy regarding the low-priority enforcement of federal laws, or that any future administration would not change this policy and decide to enforce the federal laws vigorously. Any such change in the federal governments enforcement of current federal laws could cause significant financial damage to us. | NOTE 1 BUSINESS ORGANIZATION AND NATURE OF OPERATIONS On March 19, 2014, we effected a four-for-one stock split of our outstanding shares of common stock. All references to shares of our common stock in our consolidated financial statements refer to the number of shares of common stock after giving effect to the stock split (unless otherwise indicated). Background and Current Operations United Cannabis Corporation ("we", "our", "us", or "UCANN") a Colorado corporation, was originally formed as a California corporation under the name MySkin, Inc. (MySkin) on November 15, 2007. MySkin was engaged in the business of providing management services to a medical spa in Los Angeles, California which provided various advanced skin care services until March 31, 2014, when this business was sold. In early 2014, we decided to exit the medical spa management business and change our focus to providing products, services and intellectual property licenses to the cannabis industry. On March 26, 2014, we entered into a License Agreement with Earnest Blackmon, Tony Verzura and Chad Ruby pursuant to which Messrs. Blackmon, Verzura and Ruby licensed certain intellectual property to us in exchange for a total of 38,690,000 shares of our common stock. In connection with this transaction: ● Messrs. Blackmon, Verzura and Ruby licensed to us all of their knowledge and know-how relating to the design and buildout of cultivation facilities, growing/cultivation systems, seed-to-sale protocols and procedures, products, a genetic catalogue including over 150 different strains, an advanced cannabinoid therapy program called "A.C.T. Now", security, regulatory compliance, and other methods and processes which relate to the cannabis industry. ● The territory for this license is the entire world and the license runs in perpetuity. There are no royalty payments under the License Agreement. ● Messrs. Blackmon, Verzura and Ruby were appointed to our board of directors effective April 7, 2014. ● Mr. Blackmon was elected as our President, Mr. Ruby was elected as Chief Operating Officer and Mr. Verzura was elected as Vice President. ● A total of 41,690,000 previously outstanding shares of common stock were cancelled resulting in a total of 43,620,000 shares of common stock outstanding on March 26, 2014. UCANN was formed as a Colorado corporation on March 25, 2014, and on May 2, 2014, MySkin merged into UCANN, a wholly-owned subsidiary of MySkin, for the purpose of changing domicile from California to Colorado and changing the corporation's name to United Cannabis Corporation. On March 31, 2014, we sold all right, title and interest in the tangible and intangible assets, trademarks, customer lists, intellectual property and rights, which we owned and were related to our advanced skin care business since we have entered into a new business and we no longer have any use for these assets. The assets were sold to MySkin Services, Inc. (MTA), a business partly owned by Marichelle Stoppenhagen, our former officer and director, in exchange for the $15,000 payable which we owed to Ms. Stoppenhagen and/or MTA. In addition, MTA assumed all costs associated with these assets starting on March 31, 2014. Government Regulation As of December 31, 2015, 23 states and the District of Columbia allow their citizens to use medical marijuana, and four states and the District of Columbia have legalized marijuana for recreational use. The state laws are in conflict with the federal Controlled Substances Act, which makes marijuana use and possession illegal on a national level. The Obama administration has effectively stated that it is not an efficient use of resources to direct federal law enforcement agencies to prosecute those lawfully abiding by state-designated laws allowing the use and distribution of medical and recreational marijuana. However, there is no guarantee that the current administration will not change its stated policy regarding the low-priority enforcement of federal laws, or that any future administration would not change this policy and decide to enforce the federal laws vigorously. Any such change in the federal governments enforcement of current federal laws could cause significant financial damage to us. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation Principles of Consolidation Use of Estimates We make our estimate of the ultimate outcome for these items based on historical trends and other information available when our condensed consolidated financial statements are prepared. We recognize changes in estimates in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available. We believe that our significant estimates, assumptions and judgments are reasonable, based upon information available at the time they were made. Our actual results could differ from these estimates, making it possible that a change in these estimates could occur in the near term. Financial Instruments Financial Instruments The carrying amounts of our short-term financial instruments, including accounts receivable, , accounts payable, accrued expenses and deferred revenue approximates fair value due to the relatively short period to maturity for these instruments. Investments in non-marketable equity securities are carried at cost. The carrying amount of our notes payable at September 30, 2016 and December 31, 2015, approximates their fair values based on our incremental borrowing rates. Cash and Cash Equivalents Accounts Receivable We determine our allowance for doubtful accounts by regularly evaluating individual customer receivables and considering the customers financial condition and credit history, and current economic conditions. Our allowance for doubtful accounts was $30,000 and $4,340 as of September 30, 2016 and December 31, 2015, respectively. Intangible Assets Investments in Non-Marketable Equity Securities Long-Lived Assets Equity Method Investments Deferred Revenue Revenue Recognition - Revenue Recognition Revenue for services with a payment in form of stock, warrants or other financial assets is recognized when the services are performed. The value of revenue is measured using the Black-Scholes model for warrants. Cost of Revenues Research and Development Expenses - General and Administrative Expenses - Stock-Based Compensation Equity We account for stock option grants issued and vesting to employees based on ASC 718, Compensation Stock Compensation Income Taxes Income Taxes Commitments and Contingencies If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our condensed consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. Net Income Loss Per Share Earnings per Share Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share, because the effect of their inclusion would have been anti-dilutive. Nine Months Ended September 30, Three Months Ended September 30, 2016 2015 2016 2015 Warrants to purchase common stock 1,895,122 3,000,000 1,895,122 3,000,000 Stock options 3,680,000 600,000 3,680,000 600,000 Total potentially dilutive securities 5,575,122 3,600,000 5,575,122 3,600,000 Other Comprehensive Income (Loss) Segment Reporting Concentration of Credit Risk The following tables show significant concentrations in our revenues and accounts receivable for the periods indicated: Percentage of Revenues: Nine Months Ended Three Months Ended 2016 2015 2016 2015 Customer A 88 % 9 % 80 % 35 % Customer B 12 % 25 % 20 % 34 % Customer C 19 % 31 % Customer D 37 % 0 % Percentage of Accounts Receivable: September 30, 2016 December 31, 2015 Customer A 57 % 56 % Customer B 43 % 41 % Customer C 1 % Recently Issued Accounting Pronouncements In May 2014 the FASB issued guidance on revenue from contracts with customers, which implements a five step process of how an entity should recognize revenue in order to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance will be effective at the beginning of fiscal year 2017, and early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. We are currently evaluating the impact that the adoption will have on our condensed consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing reporting. | NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation Use of Estimates We make our estimate of the ultimate outcome for these items based on historical trends and other information available when our consolidated financial statements are prepared. We recognize changes in estimates in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available. We believe that our significant estimates, assumptions and judgments are reasonable, based upon information available at the time they were made. Our actual results could differ from these estimates, making it possible that a change in these estimates could occur in the near term. Fair Value of Financial Instruments Level 1 Level 2 Level 3 The carrying amount of our cash and cash equivalents, accounts receivable, accounts payable, and other current assets and liabilities in our consolidated financial statements approximates fair value because of the short-term nature of the instruments. Investments in non-marketable equity securities are carried at cost less other-than-temporary impairments. The carrying amount of our notes payable and convertible debt at December 31, 2015, approximates their fair values based on our incremental borrowing rates. Cash and Cash Equivalents Accounts Receivable Our allowance for doubtful accounts was $4,340 and $0 as of December 31, 2015 and 2014, respectively. We recorded bad debt expense, included in general and administrative expenses, of $24,185 and $0 during the years ended December 31, 2015 and 2014, respectively. Prepaid Expenses - Property and Equipment Intangible Assets Investments in Non-Marketable Equity Securities Long-Lived Assets We have not recorded any impairment charges related to long-lived assets as of December 31, 2015 or December 31, 2014. Equity Method Investments Deferred Revenue Revenue Recognition - Revenue Recognition Revenue for services with a payment in the form of stock, warrants or other financial assets is recognized when the services are performed. The value of revenue paid for with warrants is measured using the Black-Scholes-Merton pricing model. Revenue from product sales, including delivery fees, is recognized when an order has been obtained, the price is fixed and determinable, the product is shipped, title has transferred and collectability is reasonably assured. Generally, our suppliers drop-ship orders to our clients with origin terms. For any shipments with destination terms, we defer revenue until delivery is made to the customer. During the years ended December 31, 2015 and 2014, sales returns were not significant and as such, no sales return allowance had been recorded as of December 31, 2015 or December 31, 2014. Reimbursable expenses, including those relating to travel, other out-of-pocket expenses and any third-party costs, are included as a component of revenues. Typically, an equivalent amount of reimbursable expenses are included in cost of revenues. Reimbursable expenses related to time and materials and fixed-fee engagements are recognized as revenue in the period in which the expense is incurred and collectability is reasonably assured. Taxes collected from customers and remitted to governmental authorities are presented in our consolidated statement of operations on a net basis. Cost of Revenues Shipping and Handling Costs - Advertising Costs - Research and Development Expenses - Sales and Marketing Expenses General and Administrative Expenses - Share-Based Compensation Equity We account for stock option grants issued and vesting to employees based on ASC 718, Compensation Stock Compensation Income Taxes We follow the provisions of ASC 740, Income Taxes When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in our consolidated financial statements in the period during which, based on all available evidence, we believe it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits, if any, are classified as interest expense and penalties and are included in selling, general and administrative expenses in our consolidated statements of operations. Commitments and Contingencies If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. Net Loss Per Share Earnings per Share Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share, because the effect of their inclusion would have been anti-dilutive. Years Ended December 31, 2015 2014 Warrants to purchase common stock 3,000,000 3,997,692 Stock options 600,000 Total potentially dilutive securities 3,600,000 3,997,692 Other Comprehensive Income (Loss) Segment Reporting Concentration of Credit Risk The following tables show significant concentrations in our revenues and accounts receivable for the periods indicated: Percentage of Revenue: Years Ended December 31, 2015 2014 Customer A 36 % % Customer B 32 % 80 % Customer C 18 % 4 % Percentage of Accounts Receivable: Years Ended December 31, 2015 2014 Customer D 56 % % Customer E 41 % % Customer F % 46 % Customer G % 33 % Customer H 1 % 21 % Recently Issued Accounting Pronouncements In May 2014, the FASB issued guidance on revenue from contracts with customers, which implements a five step process of how an entity should recognize revenue in order to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance will be effective for us at the beginning of fiscal year 2018, and early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. We are currently evaluating the impact that the adoption will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing reporting. In August 2014, the FASB issued guidance on disclosure of uncertainties about an entity's ability to continue as a going concern. This guidance requires management to perform interim and annual assessments of an entity's ability to continue as a going concern within one year of the date the financial statements are issued and provides guidance on determining when and how to disclose going concern uncertainties in the financial statements. Certain disclosures will be required if conditions give rise to substantial doubt about an entity's ability to continue as a going concern. The guidance is effective for us at the beginning of fiscal year 2017, with early adoption permitted. We do not expect that the adoption of this standard will have a material effect on our consolidated financial statements. In April 2015, the FASB issued guidance requiring us to present debt issuance costs in the balance sheet as a reduction from the related debt liability rather than as an asset. Amortization of these costs will continue to be reported as interest expense. This guidance is effective for us at the beginning of fiscal year 2016, and early adoption is allowed. Retrospective application is required. Upon adoption, the deferred financing costs associated with our notes payable will be reclassified from Deferred financing costs to Notes payable, net. In November 2015, the FASB issued guidance requiring entities to present deferred tax assets and liabilities as noncurrent in a classified balance sheet instead of separating into current and noncurrent amounts. This guidance is effective for us at the beginning of fiscal year 2017, on a prospective or retrospective basis. Early adoption is permitted for all companies in any interim or annual period. We have not determined in what period it will adopt or what adoption method we will use and we are currently assessing the impact that this guidance may have on our consolidated financial statements. In February 2016, the FASB issued guidance on leases which requires entities to recognize right-of-use assets and lease liabilities on the balance sheet for the rights and obligations created by all leases, including operating leases, with terms of more than 12 months. The new guidance also requires additional disclosures on the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative information. The new guidance will be effective for us at the beginning of fiscal year 2019. Early adoption is permitted. We are in the process of evaluating the impact the adoption of this guidance will have on our consolidated financial statements and related disclosures. |
GOING CONCERN
GOING CONCERN | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
GOING CONCERN [Abstract] | ||
GOING CONCERN | NOTE 3 GOING CONCERN Our condensed consolidated financial statements have been prepared on a going concern basis, which assumes we will be able to realize our assets and discharge our liabilities in the normal course of business for the foreseeable future. During the nine months ended September 30, 2016, we incurred losses of $962,953 and used cash of $258,607 in operating activities. At September 30, 2016, we had a working capital deficit of $2,132,349 and an accumulated deficit of $6,471,282. Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and, or, obtaining the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. There is no assurance that these events will be satisfactorily completed. | NOTE 3 GOING CONCERN Our consolidated financial statements have been prepared on a going concern basis which assumes we will be able to realize our assets and discharge our liabilities in the normal course of business for the foreseeable future. During the year ended December 31, 2015, we incurred losses of $2,883,362 and used cash of $525,148 in our operating activities. As at December 31, 2015, we had a working capital deficit of $2,410,679 and an accumulated deficit of $5,508,329. Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and, or, obtaining the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. There is no assurance that these events will be satisfactorily completed. Currently we are not in compliance with the covenants under our debt agreements. As a result, we are proactively working with our lenders and evaluating options for maintaining compliance, which include requesting covenant amendments, waivers or forbearances, and could include a possible reduction of our debt level, including the payment of prepayment penalties. Our failure to comply with these covenants would be an event of default that, if not waived, could result in the acceleration of most our outstanding indebtedness, including the acceleration of our convertible notes and certain notes payable. If the lenders were to make such a demand for repayment, we would be unable to pay the obligations as we do not have existing facilities or sufficient cash on hand to satisfy these obligations. Due to this material uncertainty, there is substantial doubt about our ability to continue as a going concern. While we will continue to work with our existing lenders, there can be no assurance that we will be successful. |
INVESTMENTS IN NON-MARKETABLE E
INVESTMENTS IN NON-MARKETABLE EQUITY SECURITIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Investments, All Other Investments [Abstract] | ||
INVESTMENTS IN NON-MARKETABLE EQUITY SECURITIES | NOTE 4 INVESTMENTS IN NON-MARKETABLE EQUITY SECURITIES On June 9, 2014, we received 1,187,500 common shares; and 3,000,000 warrants, which expired unexercised, to purchase shares of common stock of WeedMD RX Inc. (WMD), a private Canadian company in the cannabis industry, in exchange for future consulting services and use of our intellectual property. The $593,750 cost assigned to the WMD shares was classified as investment in non-marketable equity securities and as a component of deferred revenue in the amount of $593,750 on our condensed consolidated balance sheets. On March 24, 2016, an unrelated third party agreed to assume all of our obligations, including accrued and unpaid interest, pursuant to the terms of a $175,000 note payable we owed to WeedMD, in consideration for the transfer by us of 1,100,000 shares of the common stock of WMD to the unrelated third party. WMD consented to the assumption of the loan by the unrelated third party, and released us from any further liability with respect to the loan. After the transfer of the 1,100,000 shares of common stock of WMD to the unrelated third party, we own 87,500 shares of common stock of WMD, and reduced our investment in none-marketable equity securities to $15, 125. | NOTE 4 INVESTMENTS IN NON-MARKETABLE EQUITY SECURITIES On June 9, 2014, we received 1,187,500 common shares and 3,000,000 warrants to purchase common shares of WeedMD RX Inc. (WMD), a private Canadian company in the cannabis industry, in exchange for future consulting services and use of our intellectual property. The shares represented a 4.29% equity investment in WMD at the time of the investment and we do not have significant influence over the investee. We recorded our investment in these non-marketable equity securities at estimated cost, based on our estimate of the fair value of the securities on the date of the transaction. The WMD common shares were recorded at $0.50 per share, or $593,750 in total, taking into consideration WMDs most recent sale of their common shares prior to the date of the transaction (CAD $0.50). In December 2015, we determined that WMDs lack of operating activities during 2015 resulted in a significant adverse effect on our carrying value of these securities (an impairment indicator) and accordingly, we recorded an other-than-temporary impairment charge of $388,475 and included this amount in loss on investments in non-marketable securities in our consolidated statements of operations. The remaining balance, $205,275, or $0.17 per share, was determined based on the consideration we received in our subsequent sale of 1,100,000 WMD shares in March 2016, and this amount is classified as investment in non-marketable equity securities on our consolidated balance sheets. See also Note 20, Subsequent Events The warrants we received entitled us to purchase WMD shares for CAD $0.50 (USD $0.46 on the date of the related agreement) each for a period of six months from the date the warrant was issued. The WMD warrants were recorded at $0.10 per warrant utilizing the Black Scholes option pricing model and the following assumptions on the date of valuation: Risk free interest rate 0.60 % Expected term (years) 0.5 Expected volatility 70 % Expected dividends 0 % On December 9, 2014, the 3,000,000 WMD warrants expired unexercised and we recorded a $300,000 loss on investment in non-marketable equity securities in our consolidated statements of operations. |
PREPAID EXPENSES
PREPAID EXPENSES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
PREPAID EXPENSES | NOTE 5 PREPAID EXPENSES AND OTHER ASSETS Prepaid expenses and other assets consist of: September 30, December 31, Prepaid investor relations services $ $ 1,667 Prepaid licensing fees 35,000 Other prepaid services and fees 19,674 $ $ 56,341 | NOTE 5 PREPAID EXPENSES Our prepaid expenses consist of: December 31, 2015 2014 Prepaid investor relations services $ 1,667 $ 121,500 Prepaid licensing fees 35,000 39,000 Other prepaid services and fees 19,674 16,900 $ 56,341 $ 177,400 |
INTANGIBLES
INTANGIBLES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
INTANGIBLES | NOTE 6 INTANGIBLES Our intangible assets are comprised of provisional patent applications and applications for a design mark and trademarks. Our intangible assets will be amortized on a straight-line basis over estimated useful lives of 20 years for patents and 10 years for design marks and trademarks once the applications are approved. Costs associated with applications that are not approved will be expensed in the period that the application is rejected or abandoned. | NOTE 6 INTANGIBLES Our intangible assets are comprised of provisional patent applications and applications for a design mark and trademarks. Our intangible assets will be amortized on a straight-line basis over estimated useful lives of 20 years for patents and 10 years for design marks and trademarks once the applications are approved. Costs associated with applications that are not approved will be expensed in the period that the application is rejected or abandoned. |
EQUITY METHOD INVESTMENTS
EQUITY METHOD INVESTMENTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Equity Method Investments and Joint Ventures [Abstract] | ||
EQUITY METHOD INVESTMENTS | NOTE 7 EQUITY METHOD INVESTMENTS On August 15, 2014, we acquired a 50% interest in Cannabinoid Research & Development Company Limited (CRD), a Jamaican company, in exchange for 40,000 shares of our common stock valued at $88,000 based on the previous days closing price of our stock. We also committed to provide expertise on design-build, genetics, cultivation, production, processing, productizing, labeling, packaging, marketing, branding and distribution of products, as well as use of our intellectual property in the operations of CRD. As of September 30, 2016, CRD did not have any operations or operating activities. We accounted for this $88,000 as an equity method investment on our condensed consolidated balance sheets. | NOTE 7 EQUITY METHOD INVESTMENTS Our equity method investments consist of: December 31, 2015 2014 Lone Mountain Partners, LLC 25% interest $ $ 50,000 Cannabinoid Research & Development Company Limited 50% interest 88,000 88,000 Total equity method investments $ 88,000 $ 138,000 Lone Mountain On August 14, 2014, we acquired a 25% membership interest in Lone Mountain Partners, LLC, (Lone Mountain) for $50,000 and a commitment to provide future services, including, but not limited to, assisting with the application to obtain licenses to operate a medical marijuana entity in Nevada and to provide standard operating procedures, security protocols, extract processing and equipment design, cultivation and processing center management, staffing and assistance with ongoing management of Lone Mountain. During the second half of 2014, we advanced Lone Mountain $40,900 for license application fees. As of December 31, 2014, Lone Mountain did not have any operations or operating activities. We accounted for our $50,000 cash contribution as an equity method investment and the $40,900 advance as amounts due from related parties on our consolidated balance sheets. During the first half of 2015, Lone Mountain incurred operating losses in excess of $400,000. We recognized our 25% share of these losses up to the carrying amount of our equity method investment and advances to Lone Mountain and included this total $90,900 expense in equity in net loss of unconsolidated affiliate in our consolidated statements of operations. We entered into a settlement agreement effective July 16, 2015, as amended on September 9, 2015, whereby we transferred our 25% equity interest in LMP to one of the LMP members in exchange for a mutual release from all claims against us, LMP and the other LMP members. This transaction did not impact our consolidated financial statements as we had previously written off our investment in and advances to LMP. CRD On August 15, 2014, we acquired a 50% interest in Cannabinoid Research & Development Company Limited (CRD), a Jamaican company, in exchange for 40,000 shares of our common stock valued at $88,000 based on the previous days closing price of our stock. We also committed to provide expertise on design-build, genetics, cultivation, production, processing, productizing, labeling, packaging, marketing, branding and distribution of products, as well as use of our intellectual property in the operations of CRD. As of December 31, 2015, CRD did not have any operations or operating activities. We accounted for this $88,000 as an Equity method investment on our consolidated balance sheets. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Accrued Liabilities, Current [Abstract] | ||
ACCRUED EXPENSES | NOTE 8 ACCRUED EXPENSES Our accrued expenses consist of: September 30, 2016 December 31, 2015 Accrued consulting fees $ 152,500 $ 110,000 Accrued wages and related expenses $ 629,780 Accrued interest expense 142,446 $ 101,185 Accrued other expenses 67,500 $ 87,568 $ 362,446 $ 928,533 Included in accrued consulting fees at September 30, 2016 and December 31, 2015 is $110,000 that represent fees owed to consultants working on a research and development project that is approximately 80% complete. | NOTE 8 ACCRUED EXPENSES Our accrued expenses consist of: December 31, 2015 2014 Accrued consulting fees $ 110,000 $ 110,000 Accrued wages and related 629,780 433,963 Accrued interest expense 101,185 6,832 Accrued other expenses 87,568 Total accrued expenses $ 928,533 $ 550,795 |
FAIR VALUE MEASUREMENTS AND DER
FAIR VALUE MEASUREMENTS AND DERIVATIVE LIABILITIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | ||
FAIR VALUE MEASUREMENTS AND DERIVATIVE LIABILITIES | NOTE 9 FAIR VALUE MEASUREMENTS AND DERIVATIVE LIABILITIES The following table provides the liabilities carried at fair value measured on a recurring basis as of September 30, 2016. Level 1 Level 2 Level 3 Total Derivative liabilities - convertible notes $ $ $ $ Derivative liabilities - warrants 547,200 547,200 Total $ $ 547,200 $ $ 547,200 Convertible Notes Payable We valued our derivative liabilities related to embedded conversion features applicable to our borrowings of $322,000 under our convertible notes payable with embedded derivative features (see Note 12 below) and accrued interest payable of $28,724 thereon in accordance with fair value measurement guidelines. For the nine months ended September 30, 2016, the following table reconciles the beginning and ending balances for our financial instruments that are carried at fair value measured on a recurring basis: Derivative liabilities as of December 31. 2015 $ 383,581 Loss on revaluation of derivative liabilities during the period 370,805 Loss on modification and cure of default of note payable to Slainte Ventures 237,027 Effect of payoff of JSJ and Vis Vires convertible notes (178,484 ) Conversion of note payable to Tangiers Investment Group (265,729 ) Derivative liabilities as of September 30, 2016 $ 547,200 The estimated fair value of the derivative liabilities related to our convertible notes payable was measured as the aggregate estimated fair value of each component of the compound embedded derivative liabilities (see Note 12 below), based on Level 2 and Level 3 inputs, using a binomial lattice pricing model. Changes in the fair value of the compound embedded derivative liability at each reporting date are included in gain/ (loss) on derivative liabilities in our consolidated statement of operations. | NOTE 9 FAIR VALUE MEASUREMENTS AND DERIVATIVE LIABILITIES The following table provides the liabilities carried at fair value measured on a recurring basis as of December 31, 2015: Level 1 Level 2 Level 3 Total Derivative liabilities $ $ $ 383,581 $ 383,581 We did not have any liabilities carried at fair value measured on a recurring basis as of December 31, 2014. 2015 Derivative Liabilities We valued our derivative liabilities related to embedded conversion features applicable to our borrowings of $381,000 under our 2015 convertible notes payable (see Note 12 below) and accrued interest payable of $5,121 thereon in accordance with fair value measurement guidelines. For the year ended December 31, 2015, the following table reconciles the beginning and ending balances for our financial instruments that are carried at fair value measured on a recurring basis: Derivative liabilities as of December 31, 2014 $ Additions to derivative liabilities for convertible debt conversion features recorded as debt discount 355,293 Additions to derivative liabilities for interest payable conversion features recorded as interest expense 4,695 Loss on revaluation of derivative liabilities during the year 23,593 Derivative liabilities as of December 31, 2015 $ 383,581 The estimated fair value of the derivative liabilities related to our 2015 convertible notes payable was measured as the aggregate estimated fair value of each component of the compound embedded derivative liabilities (see Note 12 below), based on Level 2 and Level 3 inputs, using a binomial lattice pricing model. Changes in the fair value of the compound embedded derivative liability at each reporting date are included in gain/ (loss) on derivative liabilities in our consolidated statement of operations. 2014 Derivative Liability We valued our derivative liability related to embedded conversion features applicable to our initial borrowing of $282,500 under the Typenex convertible note payable (see Note 12 below) and accrued interest payable of $28,473 thereon in accordance with the Level 3 guidelines. For the year ended December 31, 2014, the following table reconciles the beginning and ending balances for our financial instruments that are carried at fair value measured on a recurring basis: Derivative liability as of December 31, 2013 $ Additions to derivative liability for convertible debt conversion feature recorded as debt discount 151,937 Additions to derivative liability for interest payable conversion feature recorded as interest expense 15,320 Gain on revaluation of derivative liability during the year (6,099 ) Settlement of derivative liability on December 29, 2014 (161,158 ) Derivative liability as of December 31, 2014 $ The fair values of embedded conversion features issued with our Typenex convertible note and accrued interest payable were estimated using the Black-Scholes option pricing model. The key inputs to this valuation model during the year ended December 31, 2014, were as follows: Risk-free interest rate 0.43% 0.72% Dividend yield Volatility 146% 172% Expected life in years 1.72 2.09 Exercise price $3.00 |
DEFERRED REVENUE
DEFERRED REVENUE | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Deferred Revenue Disclosure [Abstract] | ||
DEFERRED REVENUE. | NOTE 10 DEFERRED REVENUE Our deferred revenue consists of: September 30, December 31, Deferred revenue - WeedMD $ 428,750 $ 563,750 Deferred revenue - FoxBarry 200,000 428,750 763,750 Less - current portion (180,000 ) (380,000 ) Deferred revenue, net of current portion $ 248,750 $ 383,750 As described in Note 4 above, on June 9, 2014, we received 1,187,500 common shares and 3,000,000 warrants to purchase common shares of WMD in exchange for future consulting services and use of our intellectual property. We recorded the $893,750 fair value of these securities as deferred revenue, and we recognized $150,000 of this amount as revenue during the period July 1, 2014 through December 31, 2014, based upon our initial three year estimate of the service period involved. Based on consultations with WMD, we expect to deliver the remaining consulting services and use of our intellectual property to WMD on a relatively consistent monthly basis during the four year period January 1, 2015 through December 31, 2018. Accordingly, we are now recognizing $15,000 of deferred revenue per month, and thus, during the three and nine month periods September 30 2016 and 2015, we recognized a total of $45,000 and $135,000 of revenue applicable to this arrangement, respectively. At September 30, 2016, we expect to recognize $180,000 of the remaining $428,751 WMD deferred revenue during the next twelve months and accordingly, we have classified the $180,000 as a current liability on our condensed consolidated balance sheets. On December 28, 2014, we entered into a royalty and consulting services agreement with FoxBarry Farms, LLC (FoxBarry) whereby we received a $200,000 prepaid royalty payment from FoxBarry, which we classified on our balance sheet as deferred revenue. Over the past twelve months, in spite of repeated efforts by our management, we have not been able to communicate with, or locate the principals of FoxBarry; and further, our research indicates that FoxBarry has ceased doing business, and is no longer an operating entity. When we entered into the transaction with FoxBarry, it was our policy to recognize the related deferred royalty revenue, based on actual applicable sales as defined in the agreement. However, since FoxBarry appears to no longer be in existence, and all of our conditions pursuant to the agreement have been satisfied, we elected to recognize $200,000 of deferred during the three and nine months ended September 30, 2016. For the three and nine months ended September 2015, we did not recognize any deferred revenue related to this agreement. | NOTE 10 DEFERRED REVENUE Our deferred revenue consists of: December 31, 2015 2014 Deferred revenue WeedMD $ 563,750 $ 743,750 Deferred revenue - FoxBarry 200,000 200,000 763,750 943,750 Less current portion (380,000 ) (500,000 Deferred revenue, net of current portion $ 383,750 $ 443,750 As described in Note 4 above, on September 9, 2014, we received 1,187,500 common shares and 3,000,000 warrants to purchase common shares of WMD in exchange for future consulting services and use of our intellectual property. We recorded the $893,750 fair value of these securities as deferred revenue and we recognized $150,000 of this amount as revenue during the period July 1, 2014 through December 31, 2014, based upon our initial three year estimate of the service period involved. Based on recent discussions with WMD, we now expect to deliver the remaining consulting services and use of our intellectual property to WMD on a relatively consistent monthly basis during the four year period January 1, 2015 through December 31, 2018. Accordingly, we are now recognizing $15,000 of deferred revenue per month. During the years ended December 31, 2015 and 2014, we recognized $180,000 and $150,000, respectively, of revenue applicable to this arrangement. At December 31, 2015, we expect to recognize $180,000 of the remaining $563,750 WMD deferred revenue during the next twelve months and accordingly, we have classified the $180,000 as a current liability on our consolidated balance sheets. On December 28, 2014, we entered into a royalty and consulting services agreement with FoxBarry Farms, LLC (FoxBarry) whereby we received a $200,000 prepaid royalty payment from FoxBarry. At the time, we planned to recognize deferred royalty revenue based on actual applicable sales as defined in the agreement. During the years ended December 31, 2015 and 2014, we did not recognize any deferred revenue related to this agreement. In August 2015, we discontinued providing consulting services to FoxBarry as our initial project with FoxBarry was abandoned due to operational issues. At the same time we entered into discussions with FoxBarry to earn the $200,000 prepaid royalty through new projects or as a potential termination fee associated with our original agreement. We have classified the $200,000 as a current liability on our consolidated balance sheets as we expect to recognize this amount during the next twelve months. |
NOTES PAYABLE
NOTES PAYABLE | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Notes Payable [Abstract] | ||
NOTES PAYABLE | NOTE 11 NOTES PAYABLE Our notes payable consisted of the following: September 30, December 31, Note payable - WeedMD $ $ 175,000 Note payable - Slainte Ventures, LLC 600,000 600,000 Total notes payable $ 600,000 $ 775,000 On July 7, 2014, we issued a $175,000, unsecured demand promissory note bearing interest at 5% to WeedMD for cash used in our business development activities. As discussed in Note 4 above, on March 24, 2016, an unrelated third party agreed to assume all of our obligations pursuant to the $175,000 note payable to WeedMD, in consideration for the transfer by us of 1,100,000 shares of the common stock of WeedMD to the unrelated third party. WeedMD consented to the assumption of the loan and released us from any further liability with respect to the loan. On December 18, 2014, we issued a $600,000 unsecured promissory note bearing interest at 12% to an unrelated third party, Slainte Ventures, LLC. The principal and accrued interest are due on the earlier of December 17, 2015, or upon the closing of certain capital raising transactions as described in the note. The default rate of interest under the note is 18%. On March 16, 2016, we entered into an agreement with Slainte whereby Slainte waived default, amended the terms and extended the maturity date of the Slainte Note until December 17, 2016, and agreed to accept a warrant in lieu of interest due on the loan. The warrant allows Slainte to purchase 416,667 shares of our common stock; plus that number of shares of our common stock equal in number to (i) the product of the then-applicable interest rate under the Slainte Note and the amount of principal outstanding on the Note, calculated on a daily basis and paid for actual days elapsed, during the period beginning on December 18, 2015, and ending on the date on which the Note is paid in full, divided by (ii) $0.18; plus that number of shares of our common stock equal in number to (i) the product of 0.02 and the sum of the amount of principal and interest outstanding on the Note on the first day of each calendar month, beginning with February 1, 2016, divided by (ii) $0.18. The warrant is exercisable at a price of $0.18 per share, subject to adjustment in the event of stock splits, the sale of our shares of common stock at a price below $0.18 per share or the sale of equity securities with a conversion price of less than $0.18 per share. The warrant can be exercised at any time during the five year period following the full repayment of the loan; the exercise price can be paid in cash or through a cashless exercise feature; and the warrant grants certain registration rights to Slainte applicable to all shares of our common stock owned or controlled by Slainte, including shares issued upon exercise of the warrant. In addition, Slainte granted us a put option, exercisable upon repayment of the loan prior to December 17, 2016, that requires Slainte to purchase from us, for $100,000, that number of shares of our common stock equal in number to (i) $100,000 divided by (ii) the product of 80% and the average price of our common stock for the 30 trading days immediately prior to the date the put option is exercised. These warrants are accounted for as a liability under ASC 815. The Company assesses the fair value of the warrants quarterly based on the Black-Scholes pricing model. See below for variables used in assessing the fair value. September 30, December 31, Expected life (years) 5.0 4.96 Risk-free interest rate 1.41 % 1.21 % Expected volatility 226 % 227 % In connection with these warrants, the Company recognized a loss on the change in fair value of warrant liability of $310,173 during the nine months ended September 30, 2016. Expected volatility is based primarily on historical volatility. Historical volatility was computed using weekly pricing observations for recent periods that correspond to the expected life of the warrants. The Company believes this method produces an estimate that is representative of our expectations of future volatility over the expected term of these warrants. The Company currently has no reason to believe future volatility over the expected remaining life of these warrants is likely to differ materially from historical volatility. The expected life is based on the remaining term of the warrants. The risk-free interest rate is based on U.S. Treasury securities rates. Due to the fair value of the warrants issued in connection with the amended note agreement, the modification was considered substantial (i.e. greater than 10% of the carrying value of the debt). As a result, an extinguishment of debt was deemed to have occurred, resulting in the recognition of an extinguishment loss of $133,077. | NOTE 11 NOTES PAYABLE Our notes payable consist of: December 31, 2015 2014 Note payable - WeedMD $ 175,000 $ 175,000 Note payable Slainte 600,000 600,000 Total notes payable $ 775,000 $ 775,000 On July 7, 2014, we issued a $175,000, unsecured, demand promissory note bearing interest at 5% to WeedMD for cash used in our business development activities. Interest expense during the years ended December 31, 2015 and 2014, applicable to this note was $8,750 and $4,267, respectively. Accrued interest payable at December 31, 2015 and 2014 was $13,017 and $4,267, respectively, and these amounts are included in accrued expenses on our consolidated balance sheets. On December 18, 2014, we issued a $600,000 unsecured promissory note (the Slainte Note) bearing interest at 12% to Slainte Ventures, LLC (Slainte). The principal and accrued interest were due on the earlier of December 17, 2015, or upon the closing of certain capital raising transactions as described in the note. The default rate of interest under the note is 18%. Debt issuance costs of $13,500 were immediately recognized as interest expense as, at the time, we expected to close on a capital raising transaction in early 2015. Additional interest expense during the years ended December 31, 2015 and 2014, applicable to this note was $80,482 and $2,565, respectively. Accrued interest payable at December 31, 2015 and 2014, was $83,047 and $2,565, respectively. On October 6, 2015, we borrowed funds from a third party and did not apply the borrowed funds to the Slainte Note resulting in a default under the terms of the note. On March 18, 2016, we received a default waiver from Slainte as further described in Note 20, Subsequent Events |
CONVERTIBLE NOTE PAYABLE
CONVERTIBLE NOTE PAYABLE | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
CONVERTIBLE NOTE PAYABLE [Abstract] | ||
CONVERTIBLE NOTE PAYABLE | NOTE 12 CONVERTIBLE NOTES PAYABLE During the year ended 2015, we issued three convertible promissory notes to unaffiliated third parties. The net proceeds from these transactions were used for general working capital purposes. During the nine months ended September 30, 2016 we issued four convertible promissory notes, the net proceeds from which were used to pay the principal and accrued interest of two of the convertible notes issued during the year ended December 31, 2015. The difference between the face amount of the convertible notes and the net proceeds was recorded as deferred financing costs on our consolidated balance sheets, if such difference was the result of payments related to debt issuance costs. Any deferred financing costs are amortized on a straight-line basis, which approximates the effective interest rate method, during the first 180 days that the convertible notes are outstanding, and this amortization is included in interest expense in our consolidated statements of operations. The following table summarizes our convertible promissory notes as of September 30, 2016: Issue Issued To Security Maturity Interest Base Principal 3/30/2016 Slainte Unsecured 12/30/16 12 % N/A $ 81,978 4/06/16 Slainte Unsecured 12/30/16 12 % N/A 75,000 7/5/2016 Slainte Unsecured 12/30/16 12 % N/A 50,000 8/10/16 JSJ Unsecured 5/10/17 12 % $0.20 per 125,000 $ 331,978 The convertible notes, including accrued interest payable, may be converted into shares of our common stock at the Conversion Price, in whole, or in part, at various times, after the date of issuance, at the option of the holder (the Conversion Feature), as defined by the terms of the convertible note. The Conversion Price is equal the Base Conversion Rate specified in the table above multiplied by the Variable Conversion Rate (VCR), which is equal to the lowest trading price or closing bid price of our common stock during the ten trading day period prior to the date of conversion, divided by the closing price of our common stock on the day of conversion. If these conversion rates results in a beneficial conversion feature (BCF), the BCF is recorded as an unamortized convertible debt discount, which is required to be valued and amortized to interest expense over the term of the Note. We amortize our convertible debt discount on a straight-line basis, which approximates the effective interest rate method, and this amortization is included in amortization of debt discount in our consolidated statements of operations. If a convertible note is repaid, any remaining unamortized deferred financing costs and unamortized debt discount are expensed on the date of repayment. If a convertible notes is convertible into an unlimited number of unregistered, restricted common shares, it is classified as having and unlimited shares feature (Unlimited Shares Feature). The difference between the closing price of our common stock and the VCR is referred to as the Variable Conversion Rate Differential (VCRD). If, both the Unlimited Shares Feature and the VCRD meet the definition of an embedded derivative, then together they create a compound embedded derivative liability or, hereafter, simply a derivative liability. In accordance with U.S. GAAP, our derivative liabilities are recorded at fair value on the date of issuance and subsequently remeasured to fair value each reporting period with any change in fair value being recognized as gain (loss) on derivative liabilities in our consolidated statement of operations. Similarly, accrued interest payable applicable to the convertible notes is convertible into shares of our common stock, without limit, at the same Conversion Price. The fair value of the derivative liabilities applicable to accrued interest payable is measured and recognized at each reporting date as derivative liabilities with a corresponding charge to interest expense. As noted above, all derivative liabilities are re-measured in subsequent reporting periods with any change in fair value being included in gain (loss) on derivative liabilities. At September 30, 2016, we have reserved 10.2 million shares of our authorized but unissued common stock for potential conversion of the convertible notes. Slainte Convertible Notes On March 30, 2016, we borrowed $81,978, from Slainte Ventures and used the proceeds to repay principal and accrued interest applicable to our $59,000 convertible promissory note dated October 6, 2015, to Vis Vires Group, Inc. The loan, together with interest at 12% per year, is payable on December 30, 2016. We can prepay the loan at any time. If the loan is repaid on or before September 30, 2016, the principal amount which is being repaid will increase by 10%. If the loan is repaid after September 30, 2016, the principal amount which is being repaid will increase by 15%. The amount of the principal increase may be paid with shares of our common stock. The number of shares to be issued for such purpose will be determined by dividing the average closing price of our common stock (which in no case can be greater than $0.45) for the ten trading days preceding the prepayment date. If the loan is not paid when due, then at any time on or before January 10, 2017, Slainte may convert the outstanding principal and interest on the loan into shares of our common stock. The number of shares to be issued on conversion will be determined by dividing the average closing price of our common stock (which in no case can be greater than $0.45) for the ten trading days preceding the conversion date by the outstanding principal and interest on the loan on the conversion date. On April 6, 2016, we borrowed $75,000 from Slainte Ventures and used the proceeds, along with $52,500 of advances to the Company by officers and directors of the Company, to repay principal and accrued interest applicable to our $102,000 convertible promissory note, dated October 12, 2015, to JSJ Investments, Inc. The loan, together with interest at 12% per year, is payable on December 30, 2016. We can prepay the loan at any time. If the loan is repaid on or before September 30, 2016, the principal amount which is being repaid will increase by 10%. If the loan is repaid after September 30, 2016, the principal amount which is being repaid will increase by 15%. The amount of the principal increase may be paid with shares of our common stock. The number of shares to be issued for such purpose will be determined by dividing the average closing price of our common stock (which in no case can be greater than $0.45) for the ten trading days preceding the prepayment date. If the loan is not paid when due, then at any time on or before January 10, 2017, Slainte may convert the outstanding principal and interest on the loan into shares of our common stock. The number of shares to be issued on conversion will be determined by dividing the average closing price of our common stock (which in no case can be greater than $0.45) for the ten trading days preceding the conversion date by the outstanding principal and interest on the loan on the conversion date. On July 5, 2016, we borrowed $50,000 from Slainte Ventures and used the proceeds for working capital purposes. The loan, together with interest at 12% per year, is payable on December 30, 2016. We can prepay the loan at any time. If the loan is repaid on or before September 30, 2016, the principal amount which is being repaid will increase by 10%. If the loan is repaid after September 30, 2016, the principal amount which is being repaid will increase by 15%. The amount of the principal increase may be paid with shares of our common stock. The number of shares to be issued for such purpose will be determined by dividing the average closing price of our common stock (which in no case can be greater than $0.45) for the ten trading days preceding the prepayment date. If the loan is not paid when due, then at any time on or before January 10, 2017, Slainte may convert the outstanding principal and interest on the loan into shares of our common stock. The number of shares to be issued on conversion will be determined by dividing the average closing price of our common stock (which in no case can be greater than $0.45) for the ten trading days preceding the conversion date by the outstanding principal and interest on the loan on the conversion date. JSJ Convertible Note On August 10, 2016, we borrowed $125,000 from JSJ Investments and used the proceeds for working capital purposes. The loan, together with interest at 12% per year, is payable on May 10, 2017. We can prepay the loan at any time. If the loan is repaid on or before October 16, the principal amount which is being repaid will increase by 25%. If the loan is repaid on or before October 16, 2016 through February 12, 2016, the principal amount which is being repaid will increase by 30%. Thereafter, the note may be repaid only upon written consent from JSJ, and the principal amount that is being repaid will increase by 30%. At any time after the date of the note, JSJ is entitled to convert all of the outstanding and unpaid principal in to shares of our common stock. Until February 12, 2017, the conversion price is $0.20 per share, and thereafter, the conversion price will be at a 45% discount to the lowest closing price of our common stock for the ten trading days preceding the conversion date. JSJ may not make any conversions that would result in the note holder holding more than 4.99% of our issued and outstanding common stock at any one time. | NOTE 12 CONVERTIBLE NOTES PAYABLE 2015 Convertible Notes From time to time during 2015, we issued convertible promissory notes (the 2015 Notes) to unaffiliated third parties. The net proceeds from these transactions are used for general working capital purposes. The difference between the face amount of the 2015 Notes and the net proceeds is recorded as deferred financing costs on our consolidated balance sheets if such difference is the result of payments related to debt issuance costs. Deferred financing costs are amortized on a straight-line basis, which approximates the effective interest rate method, during the first 180 days that the 2015 Notes are outstanding and this amortization is included in interest expense in our consolidated statements of operations. The following table summarizes our convertible promissory notes issued during the year ended December 31, 2015: Issue Date Issued to Maturity Date Interest Rate Default Interest Rate Base Conversion Rate VCR Look VCR Calculated Principal 10/6/2015 Vis Viers Group, Inc. Unsecured 6/30/2016 8% 22% 58% 10 days 3 lowest closing bids $ 59,000.00 10/12/15 JSJ Investments Inc. Unsecured 7/8/2016 12% 18% 55% 10 days 5 lowest trades 102,000.00 12/9/15 Tangiers Investment Group, LLC Secured by Certain Assets 12/8/2016 10% 20% 55% 10 days 3 lowest closing bids 220,000.00 Total principal outstanding at December 31, 2015 $ 381,000.00 The 2015 Notes, including accrued interest payable, may be converted into shares of our common stock at the Conversion Price, as defined below, in whole, or in part, at any time beginning 180 days after the date of issuance, at the option of the holder (the Conversion Feature). The Conversion Price is equal the Base Conversion Rate specified in the table above multiplied by the Variable Conversion Rate (VCR) which is equal to the average of the number of lowest trading prices or closing bid prices of our common stock (specified in the table above) during the ten trading day period prior to the date of conversion divided by the closing price of our common stock on the day of conversion. Both of these conversion rates results in a beneficial conversion features (BCF) recorded as unamortized convertible debt discount which is required to be valued and amortized to interest expense over the term of the Note. We amortize our convertible debt discount on a straight-line basis, which approximates the effective interest rate method, during the first 180 days that each 2015 Note is outstanding and this amortization is included in amortization of debt discount in our consolidated statements of operations. If a 2015 Note is repaid during the first 180 days, the remaining unamortized deferred financing costs and unamortized debt discount are expensed on the date of repayment. The 2015 Notes are convertible into an unlimited number of unregistered, restricted common shares (Unlimited Shares Feature). The difference between the closing price of our common stock and the VCR is referred to as the Variable Conversion Rate Differential (VCRD). Both the Unlimited Shares Feature and the VCRD meet the definition of an embedded derivative and together are referred to as a compound embedded derivative liability or, hereafter, simply a derivative liability. In accordance with U.S. GAAP, our derivative liabilities are recorded at fair value on the date of issuance and subsequently remeasured to fair value each reporting period with any change in fair value being recognized as gain (loss) on derivative liabilities in our consolidated statement of operations. Similarly, accrued interest payable applicable to the 2015 Notes is convertible into shares of our our common stock, without limit, at the same Conversion Price. The fair value of the derivative liabilities applicable to accrued interest payable is measured and recognized at each reporting date as derivative liabilities with a corresponding charge to interest expense. As noted above, all derivative liabilities are re-measured in subsequent reporting periods with any change in fair value being included in gain (loss) on derivative liabilities. The 2015 Notes also contain prepayment options whereby we may, during the first 180 days that each note is outstanding, prepay the note by paying prepayment premiums ranging from 10% to 40% of the principal then outstanding depending on the date of prepayment. In general, per the terms of our 2015 Notes, The note holders may not make any conversions that would result in the note holder holding more than 9.99% of our issued and outstanding common stock at any one time. At December 31, 2015, we have reserved 10.2 million shares of our authorized but unissued common stock for potential conversion of the 2015 Notes. Should we default on a conversion or repayment of a 2015 Note, the note, accrued interest and default penalties and fees are immediately due and payable. The minimum default penalty amount ranges from 25% to 50% (or more, under certain circumstances) times the then outstanding principal and unpaid interest. During the year ended December 31, 2015, we recorded deferred financing fees of $41,100 in connection with the issuance of our 2015 Notes and we recognized $8,700 of amortization of deferred financing costs during the year ended December 31, 2015. This amount is included in interest expense in our consolidated statements of operations. The aggregate fair value of the derivative liabilities applicable to our 2015 Notes on the dates of issuance was $355,293 and was recorded as derivative liabilities on our consolidated balance sheets. The related BCF debt discount was recorded as a reduction to our convertible notes payable on our consolidated balance sheets. During the year ended December 31, 2015, we recognized $82,500 of amortization related to the 2015 Notes and recorded this amount as amortization of debt discount in our consolidated statements of operations. We recognized $5,121 of interest expense applicable to our 2015 Notes during the year ended December 31, 2015, and included this amount of accrued interest payable as accrued expenses on our consolidated balance sheets. During the same period, we recorded an additional $4,694 of interest expense and an increase to our derivative liabilities related to the recognition of the BCF applicable to the $5,121 of interest payable. During the year ended December 31, 2015, we recognized $82,500 of BCF debt discount amortization and recorded this as an increase to our convertible notes payable, net of debt discount on our consolidated balance sheets. 2014 Typenex Note On August 13, 2014, we entered into a Securities Purchase Agreement with Typenex Co-Investment, LLC ("Typenex"), for the sale of a 10% convertible promissory note (the Typenex Note) in the principal amount of $1,657,500 (the Closing Amount) convertible into shares of our common stock. The Typenex Note had an original issue discount (OID) of $150,000. Typenex retained $7,500 of the Closing Amount for due diligence and legal bills related to the transaction and paid $25,000 on our behalf to a third party for brokerage fees (together, the Fees). The financing closed on August 13, 2014 (the Closing Date). The Typenex Note was secured by all of our assets. On August 13, 2014, in conjunction with the $1,657,500 Typenex Note, we received five, unsecured, $250,000 Investor Notes bearing interest at 8% per annum, totaling $1,250,000 that were scheduled to mature with respect to principal and interest on September 13, 2016. On December 29, 2014, we settled the amounts owing under the Typenex Note and the amounts owed to us under the Investor Notes as more fully described in below. During the year ended December 31, 2014, we recognized $37,807 of interest income applicable to these Investor Notes. The Typenex Notes interest rate was 10% per annum. All interest and principal was required to be paid twenty-five months after the date of the first borrowing under the Typenex Note (the Maturity Date). The outstanding balance on the Typenex Note was convertible into our common stock, at Typenexs option, at $3.00 per share (the Optional Conversion). The Typenex Note also contained repayment requirements beginning six months after the first borrowing under the Typenex Note. The repayment requirements gave us the option of making periodic repayments in cash or with shares of our common stock at a price discounted to market in accordance with the terms of the Typenex Note. In addition, we issued to Typenex warrants (the Typenex Warrants) to purchase 997,692 shares of our common stock, subject to adjustment in the event of a cashless exercise, as defined in the Typenex Warrants. Warrant #1 to Purchase Shares of Common Stock (Typenex Warrant #1) for 170,044 shares was immediately exercisable with the remainder (Typenex Warrants #2 - #6) only becoming exercisable, in five tranches, if and when the Investor Notes were paid. The Typenex Warrants were exercisable at $3.00 per share (the Exercise Price) until August 31, 2017, on a cash or cashless basis. Under the terms of the Typenex Warrants, if we, at any time while the Typenex Warrants were outstanding, sell or issue our common stock or securities convertible into or exercisable for shares of our common stock, including common stock issued under the Typenex Note, at an effective price per share less than the Exercise Price, then, subject to a few exceptions set forth in the Typenex Warrants, the Exercise Price will be reduced to such lower price provided that the number of shares of common stock issuable under the Typenex Warrants could not exceed a number of shares equal to three times the number of shares of common stock issuable under the Typenex Warrants as of the Closing Date. On August 15, 2014, we received net cash proceeds from our initial borrowing under the Typenex Note of $225,000 as follows: total initial borrowing of $282,500 less the $32,500 of Fees and less $25,000 of OID applicable to the initial borrowing. We expensed the Fees immediately as interest expense as the initial borrowing and all subsequent tranches were immediately convertible into our common stock by the lender. With regards to our $282,500 initial borrowing, on August 15, 2014, we recorded the $25,000 of OID plus the $118,373 fair value of the Typenex Warrant #1, plus $139,127 of the $151,937 fair value of the initial borrowing BCF, or, in total, $282,500, as debt discount and recorded the excess, $12,810, as loss on origination of derivative liability in our consolidated statements of operations. We were amortizing the $282,500 debt discount associated with the initial borrowing on a straight line basis, which approximates the effective interest method, over the nine month repayment term of the initial borrowing. With regards to the remaining $1,375,000 liability owed under the Typenex Note, we recorded the remaining $125,000 of OID as debt discount. We were amortizing the $125,000 debt discount on a straight line basis, which approximates the effective interest method, over the twenty-five month term of the Typenex Note. We also recorded the $576,152 fair value of the Typenex Warrants #2 - #6 as debt discount. Debt discount amortization relating to these warrants would be recognized on a straight line basis over the term of each future borrowing under the Typenex Note. On December 29, 2014, we paid off the Typenex Note and accrued interest thereon and we repurchased and cancelled the Typenex Warrants #2 - #6 for the purchase of 827,648 of our shares of common stock held by Typenex. Principal and interest owed to us under the Investor Notes were offset against the principal and interest we owed to Typenex under the Typenex Note and, in addition, we paid Typenex $381,714 in cash. We removed the assets and liabilities, including the derivative liability related to the Typenex Note and interest payable conversion features, from our consolidated balance sheets and reduced our common stock balance by the amount previously assigned to the Typenex Warrants #2 - #6 and recorded a loss on extinguishment of debt and repurchase of warrants as follows: Convertible note payable $ 1,657,500 Less: unamortized discount (822,250 ) Accrued interest payable 63,326 Derivative liability 161,158 Typenex Warrants #2 - #6 repurchased 576,152 Less: investor notes receivable (1,250,000 ) Less: accrued interest receivable (37,807 ) Less: cash paid (381,714 ) Loss on extinguishment of debt $ 33,635 During the year ended December 31, 2014, we recognized $161,402 of debt discount amortization and interest expense totaling $63,326 applicable to the Typenex Note. During the year ended December 31, 2014, the fair value of the BCF applicable to Typenex Note accrued interest was $15,320 and this amount was recorded as interest expense and an increase to our derivative liability in our consolidated financial statements. |
NOTES PAYABLE, RELATED PARTIES
NOTES PAYABLE, RELATED PARTIES | 12 Months Ended |
Dec. 31, 2015 | |
NOTES PAYABLE, RELATED PARTIES [Abstract] | |
NOTES PAYABLE, RELATED PARTIES | NOTE 13 NOTES PAYABLE, RELATED PARTIES On September 30, 2013, we issued a Convertible Note (the "Convertible Note") for $50,000 to NYX Capital Advisors, Inc. (NYX), an entity owned by the husband of our former President and director, in connection with $50,000 cash paid by NYX. The Convertible Note bears no interest and was convertible at any time, at the option of the holder, into 10,000,000 shares of our common stock at $0.005 per share. The Convertible Note was converted into our common shares on February 24, 2014. |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Stockholders' Equity Note [Abstract] | ||
STOCKHOLDERS' DEFICIT | NOTE 13 STOCKHOLDERS DEFICIT Stock Options On January 9, 2015, we awarded 200,000 stock options to each of Messrs. Blackmon, Verzura and Ruby under our 2014 Stock Incentive Plan. The options were fully vested at the time of grant and give the option holder the right to purchase shares of our common stock at $0.70 per share during the ten year term of the option. We calculated the fair value of each option to be approximately $0.70 per option utilizing the Black Scholes option pricing model and the following assumptions on the date of valuation: Stock price $ 0.70 Exercise price $ 0.70 Risk free interest rate 1.98 % Expected term (years) 10.0 Expected volatility 173 % Expected dividends 0 % At December 31, 2015, the fair value of these 600,000 options totaling $417,664 was included in accrued expenses on our condensed consolidated balance sheets and on January 9, 2015, the option grant date, we increased common stock and decreased accrued expenses by this amount to account for the issuance of these options on that date. On January 12, 2016, we awarded 1,050,000 stock options to each of Messrs. Blackmon, Verzura and 980,000 stock potions to Mr. Ruby under our 2014 Stock Incentive Plan. The options were fully vested at the time of grant and give the option holder the right to purchase shares of our common stock at $0.20 per share during the ten year term of the option. We calculated the fair value of each option to be approximately $0.20 per option utilizing the Black Scholes option pricing model and the following assumptions on the date of valuation: Stock price $ 0.20 Exercise price $ 0.20 Risk free interest rate 1.98 % Expected term (years) 10.0 Expected volatility 173 % Expected dividends 0 % At December 31, 2015, the fair value of 3,080,000 options totaling $612,512, was included in accrued expenses on our condensed consolidated balance sheets, and on January 15, 2016, the option grant date, we increased common stock and decreased accrued expenses by this amount to account for the issuance of these options on that date. The following table summarizes our stock options outstanding, as of September 30, 2016: Nine Months Ended September 30, 2016 Number of Shares Weighted Average Remaining Life (years) Weighted Average Exercise Price Stock options outstanding, beginning of period 3,680,000 9.1 $ 0.26 Issued Exercised Expired Stock options outstanding, end of period 3,680,000 9.1 $ 0.26 Stock options exercisable, September 30, 2016 3,680,000 9.1 $ 0.26 Common Stock Issued In Exchange For Outstanding Warrant On February 10, 2015, we issued 621,000 shares of our common stock valued at $987,390 based on the previous days closing price, to Typenex Co-Investment, LLC ("Typenex") in exchange for the return of Warrant #1 to Purchase Shares of Common Stock (the Warrant) that we issued to Typenex on August 13, 2014, as part of a financing arrangement. We calculated the fair value of the Warrant to be $218,788, or approximately $1.29 per underlying share, utilizing the Black Scholes option pricing model and the following assumptions on the date of valuation: Stock price $ 1.59 Exercise price $ 3.00 Risk free interest rate 1.05 % Expected term (years) 2.6 Expected volatility 183 % Expected dividends 0 % The Warrant gave Typenex the right to purchase 170,044 shares of our common stock on the issuance date and provided for adjustments to the number of shares underlying the Warrant upon occurrence of certain events including subsequent sales of our common stock. Our repurchase of the Warrant resulted in Typenex forgoing its potential right to receive shares in excess of the original 170,044 shares underlying the Warrant on the original issuance date. On February 10, 2015, we recorded the $768,602 fair value of the common shares issued in excess of the $218,788 fair value of the Warrant reacquired as a loss on settlement of disputed terms of warrant in our condensed consolidated statements of operations and as an increase in common stock on our condensed consolidated balance sheets. Warrants: The following table summarizes our share warrants outstanding as of September 30, 2016 and December 31, 2015: Nine Months Ended September 30, 2016 Number of Shares Weighted Average Remaining Life (years) Weighted Average Exercise Price Warrants outstanding, December 31, 2015 3,000,000 1.00 $ 12.00 Issued 956,836 4.53 0.18 Shares issuable at the election of the noteholder in lieu of the payment of interest under the terms of the amended Slainte note 938,287 Exercised Expired (3,000,000 ) Warrants outstanding, end of period 1,895,122 4.53 $ 0.18 Warrants exercisable, September 30, 2016 1,895,122 4.53 $ 0.18 | NOTE 14 STOCKHOLDERS DEFICIT 2014 Change of Control On February 27, 2014, NYX and Mr. Paul Enright, our former President, entered into a Stock Purchase Agreement, pursuant to which NYX sold to Mr. Enright an aggregate of 40,000,000 shares of our common stock, representing approximately 87% of our issued and outstanding shares as of that date. On March 26, 2014, we cancelled 41,690,000 previously outstanding shares of our common stock and issued 38,690,000 shares to Messrs. Blackmon, Ruby and Verzura, representing approximately 89% of our issued and outstanding shares as of that date. 2014 Stock Split On March 21, 2014, we effected a four-for-one stock split of our common stock in the form of a stock dividend of three shares of common stock for each share of common stock outstanding to stockholders of record on March 19, 2014. 2014 Equity Offering On March 26, 2014, we sold 600,000 Units for a total amount of $900,000 to 45 accredited investors. Each Unit consisted of one share of our common stock, two A Warrants and three B Warrants. Each A Warrant entitles the holder to purchase one share of our common stock at a price of $7.50 per share during the two year period commencing April 1, 2014. The A Warrants are callable once our common stock has traded at a price of at least $15.00 for 20 consecutive trading days. Each B Warrant entitles the holder to purchase one share of our common stock at a price of $15.00 per share during the three year period commencing April 1, 2014. The B Warrants are callable once our common stock has traded at a price of at least $22.00 for 20 consecutive trading days. 2014 Change in Authorized Share Capital Effective May 2, 2014, we increased the authorized number of our preferred shares from five million to ten million and the authorized number of our common shares from 50 million to 100 million. At the same time we also changed the par value of both our preferred and common stock from $0.001 per share to no par value per share. Common Stock Issued For Warrant Outstanding On February 10, 2015, we issued 621,000 shares of our common stock, valued at $987,390 based on the previous days closing price, to Typenex in exchange for the return of Typenex Warrant #1 that we issued to Typenex on August 13, 2014, as part of a financing arrangement described in Note 12 above. On February 10, 2015, we calculated the fair value of Typenex Warrant #1 to be $218,788, or approximately $1.29 per underlying share, utilizing the Black Scholes option pricing model and the following assumptions on the date of valuation: Stock price $ 1.59 Exercise price $ 3.00 Risk free interest rate 1.05 % Expected term (years) 2.6 Expected volatility 183 % Expected dividends 0 % Typenex Warrant #1 gave Typenex the right to purchase 170,044 shares of our common stock on the issuance date and provided for adjustments to the number of shares underlying the warrant upon occurrence of certain events including subsequent sales of our common stock. Our repurchase of Typenex Warrant #1 resulted in Typenex forgoing its potential right to receive shares in excess of the original 170,044 shares underlying the warrant on the issuance date. On February 10, 2015, we recorded the $987,390 fair value of the common shares issued as an increase to common stock and the $218,788 fair value of Typenex Warrant #1 reacquired and cancelled as a decrease to common stock and the difference, $768,602, as a loss on extinguishment of debt and repurchase of warrants in our consolidated statements of operations. Common Stock Issued For Equity Method Investment On August 25, 2014, we issued 40,000 shares of common stock valued at $88,000, based on the previous trading days closing price, as consideration for a 50% ownership interest in CRD. The $88,000 is included in equity method investments on our consolidated balance sheets. Common Stock Issued For Services On August 14, 2014, we issued 10,000 shares of common stock valued at $9,200, based on the previous trading days closing price, as consideration for marketing services. The $9,200 was recorded as share-based compensation expense and is included in sales and marketing expense in our consolidated statements of operations. On August 15, 2014, we issued 20,000 shares of common stock valued at $24,800, based on the previous trading days closing price, as consideration for consulting services. The $24,800 was recorded as share-based compensation expense and is included in included in general and administrative expenses in our consolidated statements of operations. On September 17, 2014, we issued 150,000 shares of common stock valued at $162,000, based on the previous trading days closing price, as consideration for prepaid investor relations services. The $162,000 was amortized on a straight-line basis over the 12 month term of the investor relations service agreement. During the year ended December 31, 2015 and 2014, we recorded $121,500 and $40,500, respectively, of amortization as share-based compensation expense and included this in general and administrative expenses in our consolidated statements of operations. On October 17, 2014, we issued 100,000 shares of common stock valued at $40,000, based on the previous trading days closing price, as consideration for prepaid product distribution fees. The $40,000 is being amortized on a straight-line basis over the ten year term of the licensing and distribution agreement. During the year ended December 31, 2015 and 2014, we recorded $4,000 and $1,000, respectively, of amortization as share-based compensation expense and included this in cost of revenues in our consolidated statements of operations. The remaining $35,000 as at December 31, 2015, is included in prepaid expenses on our consolidated balance sheets. On October 22, 2014, we issued 50,000 shares of common stock valued at $24,000, based on the previous trading days closing price, as consideration for consulting services. The $24,000 was recorded as share-based compensation expense and is included in included in general and administrative expenses in our consolidated statements of operations. On October 24, 2014, we issued 20,000 shares of common stock valued at $11,800, based on the previous trading days closing price, as consideration for consulting services. The $11,800 was recorded as share-based compensation expense and is included in included in general and administrative expenses in our consolidated statements of operations. On December 1, 2014, we issued 30,000 shares of common stock valued at $19,500, based on the previous trading days closing price, as consideration for prepaid consulting services. The $19,500 was recognized as share-based compensation expense as services were rendered. During the year ended December 31, 2015 and 2014, we recorded $10,579 and $8,921, respectively, of share-based compensation expense and these amounts are included in general and administrative expenses in our consolidated statements of operations. On December 30, 2014, we issued 20,000 shares of common stock valued at $13,800, based on the previous trading days closing price, as consideration for consulting services. The $13,800 was recorded as share-based compensation expense and is included in included in general and administrative expenses in our consolidated statements of operations. On March 2, 2015, we issued 30,000 shares of common stock valued at $42,600, based on the previous trading days closing price, as consideration for consulting services from an independent contractor. The $42,600 of share-based compensation expense is included in included in general and administrative expenses in our consolidated statements of operations. On April 23, 2015 we issued 60,000 shares of common stock valued at $47,400, based on the previous trading days closing price, as consideration for prepaid consulting fees. The $47,400 was recognized as share-based compensation expense as services were rendered. During the year ended December 31, 2015, we recorded $47,400 of share-based compensation expense and included this amount in general and administrative expenses in our consolidated statements of operations. On April 23, 2015, we issued 126,500 shares of common stock valued at $99,935, based on the previous trading days closing price, as consideration for prepaid corporate finance fees. The $99,935 was recognized as share-based compensation expense as services were rendered. During the year ended December 31, 2015, we recorded $99,935 of share-based compensation expense and included this amount in general and administrative expenses in our consolidated statements of operations. On August 17, 2015 we issued 50,000 shares of common stock valued at $19,000, based on the previous trading days closing price, as consideration for prepaid consulting fees. The $19,000 was recognized as share-based compensation expense as services were rendered. During the year ended December 31, 2015, we recognized $19,000 of share-based compensation expense and included this amount in general and administrative expenses in our consolidated statements of operations. On August 24, 2015, we issued a total of 11,000 shares of common stock valued at $5,280, based on the previous trading days closing price, as consideration for consulting services from two independent contractors. The $5,280 of share-based compensation expense is included in included in general and administrative expense in our consolidated statements of operations. On October 19, 2015, we issued 30,000 shares of common stock valued at $12,000, based on the previous trading days closing price, as consideration for prepaid product distribution fees. The $12,000 is being amortized on a straight-line basis over the remaining nine year term of the related licensing and distribution agreement. During the year ended December 31, 2015, we recorded $375 of share-based compensation expense and included this in cost of revenues in our consolidated statements of operations. The remaining $11,625 as at December 31, 2015, is included in prepaid expenses on our consolidated balance sheets. Warrants: The following table summarizes our share warrants outstanding as of December 31, 2015 and 2014: Year Ended December 31, 2015 2014 Number of Shares Weighted Average Exercise Price Number of Shares Weighted Average Exercise Price Warrants outstanding, beginning of period 3,170,044 $ 11.52 $ Issued 3,997,692 9.75 Exercised Repurchased and cancelled (170,044 ) 3.00 (827,648 ) 3.00 Expired Warrants outstanding, end of period 3,000,000 $ 12.00 3,170,044 $ 11.52 Warrants exercisable, end of period 3,000,000 $ 12.00 3,170,044 $ 11.52 The weighted-average remaining contractual life for warrants outstanding and exercisable at December 31, 2015, is 0.25 years. The aggregate intrinsic value of warrants outstanding and exercisable at December 31, 2015 is $0. As described in Note 12 above, on August 13, 2014, we issued Typenex warrants to purchase 997,692 of our common shares and recorded the $694,525 fair value of these warrants as an increase to common stock on our consolidated balance sheets. On December 29, 2014, we repurchased 827,648 of these warrants, cancelled them and recorded a $576,152 decrease in common stock. The warrants were recorded at approximately $0.70 per warrant utilizing the Black Scholes option pricing model and the following assumptions on the date of valuation: Stock price $ 1.03 Exercise price $ 3.00 Risk free interest rate 0.88 % Expected term (years) 3.05 Expected volatility 146 % Expected dividends 0 % 2004 Equity Incentive Plan On November 20, 2014, our board of directors approved our 2014 Stock Incentive Plan (the Plan) and the Plan became effective on November 19, 2015. The Plan provides officers, directors, selected employees and outside consultants an opportunity to acquire or increase a direct ownership interest in our operations and future success. Our board of directors currently administers the Plan and makes all decisions concerning which officers, directors, employees and other persons are granted awards, how many to grant to each recipient, when awards are granted, the terms and conditions applicable to awards, how the Plan should be interpreted, whether to amend or terminate the Plan and whether to delegate administration of the Plan to a committee. A maximum of 4,000,000 common shares are subject to the Plan. The Plan provides for the grant of stock options, stock awards, restricted stock units and stock appreciation rights. Stock options may be non-qualified stock options or incentive stock options except that stock options granted to outside directors, consultants or advisers providing services to us shall in all cases be non-qualified stock options. The Plan will terminate on November 20, 2024, unless the administrator terminates the Plan earlier. As of December 31, 2015, 3,400,000 common shares were available for issue under the Plan. Stock Options On January 9, 2015, we awarded 200,000 stock options to each of Messrs. Blackmon, Verzura and Ruby under our 2014 Stock Incentive Plan. The options were fully vested at the time of grant and give the option holder the right to purchase shares of our common stock at $0.70 per share during the ten year term of the option. We calculated the fair value of each option to be approximately $0.70 per option utilizing the Black Scholes option pricing model and the following assumptions on the date of valuation: Stock price $ 0.70 Exercise price $ 0.70 Risk free interest rate 1.98 % Expected term (years) 10.0 Expected volatility 173 % Expected dividends 0 % At December 31, 2014, the fair value of these 600,000 options totaling $417,664 was included in accrued expenses on our consolidated balance sheets. On January 9, 2015, the option grant date, we increased common stock and decreased accrued expenses by this amount to account for the issuance of the 600,000 options on that date. The following table summarizes our stock options outstanding as of December 31, 2015: Year Ended December 31, 2015 Number of Shares Weighted Average Exercise Price Stock options outstanding, beginning of period $ Issued 600,000 0.70 Exercised Expired Stock options outstanding, end of period 600,000 $ 0.70 Stock options exercisable, end of period 600,000 $ 0.70 The weighted-average remaining contractual life for stock options outstanding and exercisable at December 31, 2015, is 9.0 years. The aggregate intrinsic value of options outstanding and exercisable at December 31, 2015 is $0. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
SHARE-BASED COMPENSATION | NOTE 14 SHARE-BASED COMPENSATION Share-based Compensation We recognize share-based compensation expense in cost of revenues and general and administrative expense based on the fair value of common shares issued for services. Share-based compensation expense for the nine months ended September 30, 2016 and 2015 is, as follows: Nine Months Ended September 30, 2016 2015 Share-based compensation expense consulting services $ 118,160 $ 47,880 Share-based compensation expense amortization of shares issued for prepaid services 279,229 Share-based compensation expense accrual of estimated share-based awards 315,000 $ 118,160 $ 642,109 | NOTE 15 SHARE-BASED COMPENSATION Share-based Compensation We recognize share-based compensation expense in cost of revenues, sales and marketing expenses, R&D expenses and general and administrative expenses based on the fair value of common shares issued for services. In addition, we accrue share-based compensation expense for estimated share-based awards earned during the years ended December 31, 2015 and 2014, under our 2014 Equity Incentive Plan. Share-based compensation expense for the years ended December 31, 2015 and 2014 is as follows: Year Ended December 31, 2015 2014 Share-based compensation expense shares issued for services $ 47,880 $ 83,600 Share-based compensation expense amortization of shares issued for prepaid services 302,789 50,421 Share-based compensation expense accrual of shares to be issued for services 67,500 Share-based compensation expense accrual of estimated share-based awards to officers 612,512 417,664 $ 1,030,681 $ 551,685 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | ||
COMMITMENTS AND CONTINGENCIES | NOTE 15 COMMITMENTS AND CONTINGENCIES Contractual Obligations and Commercial Commitments On February 20, 2016, we entered into a consulting agreement with a third party that has a twelve month term, and which can be extended by mutual agreement. The agreement provides for the issuance of a five (5) year warrant to the consultant, upon the execution of the agreement, to purchase 250,000 shares of our common stock at a price of $0.18 per share, plus the payment of $7,500 on the first day of each month, beginning March 1, 2016, coupled with the monthly issuance of five (5) year warrants to purchase our common stock in an amount of shares determined by dividing $7,500 by $0.18 per share. These warrants are exercisable at a price of $0.18 per share. During the nine months ended September 30, 2016, we recognized $118,160 of stock based compensation expense applicable to this consulting agreement. On May 6, 2014, we entered into a consulting agreement with two third party consultants that has a nine month term, which can be renewed and/or extended by mutual agreement. Currently, the renewal of the agreement is under negotiation. The agreement provides for a $50,000 payment to the consultants at signing, which has been paid, and for three more $50,000 payments (a total of $200,000) and the issuance of 100,000 shares of our common stock upon the achievement of certain goals as set forth in appendix II of the agreement. During the three and nine months ended September 30, 2016 and 2015, we recognized no expenses applicable to this agreement At September 30, 2016 and December 31, 2015 the project was approximately 80% complete and $110,000 is included in accrued expenses on our consolidated balance sheets. The value of the 100,000 shares will be recognized upon achievement of the goals. The project has been suspended and it is unknown when it will resume. Legal Proceedings We were not subject to any legal proceedings during the nine months ended September 30, 2016, and, to the best of our knowledge, no legal proceedings are pending or threatened. | NOTE 16 COMMITMENTS AND CONTINGENCIES Contractual Obligations and Commercial Commitments On May 6, 2014, we entered into a consultancy agreement with two third party consultants that has a nine month term which can be renewed and/or extended by mutual agreement; currently, the renewal of the agreement is under negotiations. The agreement provides for a $50,000 payment at signing, which has been paid, and for three more $50,000 payments (a total of $200,000) and the issuance of 100,000 shares of our common stock upon the achievement of certain goals as set forth in appendix II of the agreement. During the years ended December 31, 2015 and 2014, we recognized $0 and $160,000 of expense applicable to this agreement and this amount is included in R&D expenses in our consolidated statements of operations. At December 31, 2015 and 2014, the project was approximately 80% complete and $110,000 is included in accrued expenses on our consolidated balance sheets. The value of the 100,000 shares will be recognized upon achievement of the goals. The project has been suspended and it is unknown when it will resume. Legal Proceedings We are involved in disputes and legal actions arising in the normal course of our business. There have been no material developments in legal proceedings in which we are involved during the year ended December 31, 2015. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 17 INCOME TAXES The Internal Revenue Code (IRC) allows net operating losses (NOL's) to be carried forward and applied against future profits for a period of twenty years. The change of ownership following our merger with MySkin may limit our ability to utilize these NOLs under the terms of IRC Section 381. We did not provide any current or deferred federal income tax provision or benefit for any of the periods presented in our consolidated financial statements because we have experienced losses since our inception. When it is more likely than not, that a tax asset cannot be realized through future income, we must record an allowance against any potential future tax benefit. We provided a full valuation allowance against our net deferred tax assets, consisting of net operating loss carry forwards, because we determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax assets during the carry forward periods. We have not taken a tax position that, if challenged, would have a material effect on our consolidated financial statements for the years ended December 31, 2015 and 2014, as defined under ASC 740. We did not recognize any adjustment to our liability for uncertain tax positions and therefore did not record any adjustment to the beginning balance of our accumulated deficit on our consolidated balance sheets. Our provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences for the periods presented are as follows: Years Ended December 31, 2015 2014 Statutory U.S. federal tax rate 39% 39% Effect of increase in valuation allowance (39% ) (39% ) % % Changes in our cumulative net deferred tax assets consist of the following: December 31, 2015 2014 Net loss carry forward $ 1,124,511 $ 962,662 Valuation allowance (1,124,511 ) (962,662 ) $ $ A reconciliation of our income taxes computed at the statutory rate is as follows: Years Ended December 31, 2015 2014 Tax benefit at statutory rate $ 1,124,511 $ 962,662 Valuation allowance (1,124,511 ) (962,662 ) $ $ |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 18 RELATED PARTY TRANSACTIONS Affiliate Customer During 2010, Messrs. Blackmon and Verzura have made loans to, or equity investments in, one of our customers and, effective June 30, 2015, Messrs. Blackmon and Verzura had completely divested themselves of those interests. As Messrs. Blackmon and Verzura may have had significant influence on management or operating polices of the customer until June 30, 2015; we have classified sales to this customer as revenues, affiliate, in our consolidated statements of operations and accounts receivable from this customer as due from related parties on our consolidated balance sheets. Lone Mountain During the year ended December 31, 2014, we made certain payments on behalf of Lone Mountain during the organizational phase of this venture and we classified these payments as due from related parties on our consolidated balance sheets. As further described in Note 6 above, during the first half of 2015, we expensed our $40,900 advance to Lone Mountain and included this amount in equity in net loss of unconsolidated affiliate in our consolidated statements of operations. CRD On April 20, 2015, we advanced CRD $5,000 and included this amount in due from related parties. Blue River Inc. In February 2015, Messrs. Blackmon, Verzura and Ruby formed Blue River Inc. (Blue River), a Colorado corporation in the cannabis industry that plans to manufacture and wholesale medicinal and recreational cannabis products including our Prana medicinals products. During the year ended December 31, 2015, we advanced Blue River $3,284 and included this amount in due from related parties. Amounts due from related parties consist of: December 31, 2015 2014 Affiliated customer $ $ 3,112 Lone Mountain 40,900 Blue River 3,284 CRD 5,000 Total due from related parties $ 8,284 $ 44,012 |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended |
Dec. 31, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | NOTE 19 DISCONTINUED OPERATIONS On March 31, 2014, we sold all right, title and interest in the tangible and intangible assets, trademarks, customer lists, intellectual property and rights, which we owned and were related to the advanced skin care business. The assets were sold to MySkin Services, Inc. (MTA), a business partly owned by Ms. Stoppenhagen, our former President and director, in exchange for a $15,000 payable we owed to Ms. Stoppenhagen and/or MTA. In addition, MTA assumed all costs associated with these assets starting on March 31, 2014. See Note 1 for further detail on our change in operations. The following details our loss from discontinued operations: Years Ended December 31, 2015 2014 Revenues $ $ 20,684 Operating expenses: Selling, general and administrative 63,872 Depreciation Loss on disposal of assets 15,704 Total operating expenses 79,576 Loss from discontinued operations, before income taxes (58,892 Provision for income taxes Loss from discontinued operations, net of income taxes $ $ (58,892 ) |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 20 SUBSEQUENT EVENTS On January 15, 2016, we awarded 1,050,000 stock options to each of Messrs. Blackmon and Verzura and 980,000 stock options to Mr. Ruby under our 2014 Stock Incentive Plan. The options were fully vested at the time of grant and gave the option holder the right to purchase shares of our common stock at $0.20 per share during the ten year term of the option. We calculated the fair value of each option to be approximately $0.20 per option utilizing the Black Scholes option pricing model and the following assumptions on the date of valuation: Stock price $ 0.20 Exercise price $ 0.20 Risk free interest rate 2.03 % Expected term (years) 10.0 Expected volatility 173 % Expected dividends 0 % On March 18, 2016, we entered into an agreement with Slainte whereby we released Slainte from any and all claims relating to the Slainte Note and Slainte waived default, amended the terms and extended the maturity date of the Slainte Note until December 17, 2016, and agreed to accept a warrant in lieu of interest due on the loan. The warrant allows Slainte to purchase 416,667 shares of our common stock; plus that number of shares of our common stock equal in number to (i) the product of the then-applicable interest rate under the Slainte Note and the amount of principal outstanding on the Note, calculated on a daily basis and paid for actual days elapsed, during the period beginning on December 18, 2015, and ending on the date on which the Note is paid in full, divided by (ii) $0.18; plus that number of shares of our common stock equal in number to (i) the product of 0.02 and the sum of the amount of principal and interest outstanding on the Note on the first day of each calendar month, beginning with February 1, 2016, divided by (ii) $0.18. The warrant is exercisable at a price of $0.18 per share, subject to adjustment in the event of stock splits, the sale of our shares of common stock at a price below $0.18 per share or the sale of equity securities with a conversion price of less than $0.18 per share. The warrant can be exercised at any time during the five year period following the full repayment of the loan; the exercise price can be paid in cash or through a cashless exercise feature; and the warrant grants certain registration rights to Slainte applicable to all shares of our common stock owned or controlled by Slainte, including shares issued upon exercise of the warrant. In addition, Slainte granted us a put option, exercisable upon repayment of the loan prior to December 17, 2016, that requires Slainte to purchase from us, for $100,000, that number of shares of our common stock equal in number to (i) $100,000.00 divided by (ii) the product of 0.80% and the average price of our common stock for the 30 trading days immediately prior to the date the put option is exercised. On March 24, 2016, an unrelated third party agreed to assume all of our obligations pursuant to the $175,000 note payable to WeedMD dated July 7, 2014, in consideration for the transfer by us of 1,100,000 shares of the common stock of WeedMD to the unrelated third party. WeedMD consented to the assumption of the loan and released us from any further liability with respect to the loan. On March 30, 2016, we borrowed $81,978, from Slainte and used the proceeds to repay principal and accrued interest applicable to our $59,000 convertible promissory note dated October 6, 2015, to Vis Vires Group, Inc. The loan, together with interest at 12% per year, is payable on December 30, 2016. We can prepay the loan at any time. If the loan is repaid on or before September 30, 2016, the principal amount which is being repaid will increase by 10%. If the loan is repaid after September 30, 2016, the principal amount which is being repaid will increase by 15%. The amount of the principal increase may be paid with shares of our common stock. The number of shares to be issued for such purpose will be determined by dividing the average closing price of our common stock (which in no case can be greater than $0.45) for the ten trading days preceding the prepayment date. If the loan is not paid when due, then at any time on or before January 10, 2017, Slainte may convert the outstanding principal and interest on the loan into shares of our common stock. The number of shares to be issued on conversion will be determined by dividing the average closing price of our common stock (which in no case can be greater than $0.45) for the ten trading days preceding the conversion date by the outstanding principal and interest on the loan on the conversion date. On April 6, 2016, we borrowed $75,000, from Slainte and used the proceeds to repay principal and accrued interest applicable to our $102,000 convertible promissory note dated October 12, 2015, to JSJ Investments Inc. The loan, together with interest at 12% per year, is payable on December 30, 2016. We may prepay the loan at any time. If the loan is repaid on or before September 30, 2016 the principal amount which is being repaid will increase by 10%. If the loan is repaid after September 30, 2016 the principal amount which is being repaid will increase by 15%. The amount of the principal increase may be paid with shares of our common stock. The number of shares to be issued for such purpose will be determined by dividing the average closing price of our common stock (which in no case can be greater than $0.45) for the ten trading days preceding the prepayment date. If the loan is not paid when due, then at any time on or before January 10, 2017, Slainte may convert the outstanding principal and interest on the loan into shares of our common stock. The number of shares to be issued on conversion will be determined by dividing the average closing price of our common stock (which in no case can be greater than $0.45) for the ten trading days preceding the conversion date by the outstanding principal and interest on the loan on the conversion date. On April 6, 2016, we borrowed $25,000 from Ernest Blackmon and $25,000 from Tony Verzura and used the proceeds to repay principal and interest applicable used to our $102,000 convertible promissory note dated October 12, 2015, to JSJ Investments Inc. The loans, together with interest at 12% per year, are payable on December 30, 2016. We may prepay the loans at any time. If the loans are repaid on or before September 30, 2016, the principal amount which is being repaid will increase by 10%. If the loans are repaid after September 30, 2016, the principal amount which is being repaid will increase by 15%. In accordance with ASC 855-10 we have analyzed its operations subsequent to December 31, 2015, to the date these consolidated financial statements were issued, and has determined that, other that as disclosed above, we do not have any material subsequent events to disclose in these consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN28
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
Principles of Consolidation | Principles of Consolidation | Principles of Consolidation |
Basis of Presentation | Basis of Presentation | |
Use of Estimates | Use of Estimates We make our estimate of the ultimate outcome for these items based on historical trends and other information available when our condensed consolidated financial statements are prepared. We recognize changes in estimates in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available. We believe that our significant estimates, assumptions and judgments are reasonable, based upon information available at the time they were made. Our actual results could differ from these estimates, making it possible that a change in these estimates could occur in the near term. | Use of Estimates We make our estimate of the ultimate outcome for these items based on historical trends and other information available when our consolidated financial statements are prepared. We recognize changes in estimates in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available. We believe that our significant estimates, assumptions and judgments are reasonable, based upon information available at the time they were made. Our actual results could differ from these estimates, making it possible that a change in these estimates could occur in the near term. |
Fair Value of Financial Instruments | Financial Instruments Financial Instruments The carrying amounts of our short-term financial instruments, including accounts receivable, , accounts payable, accrued expenses and deferred revenue approximates fair value due to the relatively short period to maturity for these instruments. Investments in non-marketable equity securities are carried at cost. The carrying amount of our notes payable at September 30, 2016 and December 31, 2015, approximates their fair values based on our incremental borrowing rates. | Fair Value of Financial Instruments Level 1 Level 2 Level 3 The carrying amount of our cash and cash equivalents, accounts receivable, accounts payable, and other current assets and liabilities in our consolidated financial statements approximates fair value because of the short-term nature of the instruments. Investments in non-marketable equity securities are carried at cost less other-than-temporary impairments. The carrying amount of our notes payable and convertible debt at December 31, 2015, approximates their fair values based on our incremental borrowing rates. |
Cash and Cash Equivalents | Cash and Cash Equivalents | Cash and Cash Equivalents |
Accounts Receivable | Accounts Receivable We determine our allowance for doubtful accounts by regularly evaluating individual customer receivables and considering the customers financial condition and credit history, and current economic conditions. Our allowance for doubtful accounts was $30,000 and $4,340 as of September 30, 2016 and December 31, 2015, respectively. | Accounts Receivable Our allowance for doubtful accounts was $4,340 and $0 as of December 31, 2015 and 2014, respectively. We recorded bad debt expense, included in general and administrative expenses, of $24,185 and $0 during the years ended December 31, 2015 and 2014, respectively. |
Prepaid Expenses | Prepaid Expenses - | |
Property and Equipment | Property and Equipment | |
Intangible Assets | Intangible Assets | Intangible Assets |
Investments in Non-Marketable Equity Securities | Investments in Non-Marketable Equity Securities | Investments in Non-Marketable Equity Securities |
Long-Lived Assets | Long-Lived Assets | Long-Lived Assets We have not recorded any impairment charges related to long-lived assets as of December 31, 2015 or December 31, 2014. |
Equity Method Investments | Equity Method Investments | Equity Method Investments |
Deferred Revenue | Deferred Revenue | Deferred Revenue |
Revenue Recognition | Revenue Recognition - Revenue Recognition Revenue for services with a payment in form of stock, warrants or other financial assets is recognized when the services are performed. The value of revenue is measured using the Black-Scholes model for warrants. | Revenue Recognition - Revenue Recognition Revenue for services with a payment in the form of stock, warrants or other financial assets is recognized when the services are performed. The value of revenue paid for with warrants is measured using the Black-Scholes-Merton pricing model. Revenue from product sales, including delivery fees, is recognized when an order has been obtained, the price is fixed and determinable, the product is shipped, title has transferred and collectability is reasonably assured. Generally, our suppliers drop-ship orders to our clients with origin terms. For any shipments with destination terms, we defer revenue until delivery is made to the customer. During the years ended December 31, 2015 and 2014, sales returns were not significant and as such, no sales return allowance had been recorded as of December 31, 2015 or December 31, 2014. Reimbursable expenses, including those relating to travel, other out-of-pocket expenses and any third-party costs, are included as a component of revenues. Typically, an equivalent amount of reimbursable expenses are included in cost of revenues. Reimbursable expenses related to time and materials and fixed-fee engagements are recognized as revenue in the period in which the expense is incurred and collectability is reasonably assured. Taxes collected from customers and remitted to governmental authorities are presented in our consolidated statement of operations on a net basis. |
Cost of Revenues | Cost of Revenues | Cost of Revenues |
Shipping and Handling Costs | Shipping and Handling Costs - | |
Advertising Costs | Advertising Costs - | |
Research and Development Expenses | Research and Development Expenses - | Research and Development Expenses - |
Sales and Marketing Expenses | Sales and Marketing Expenses | |
General and Administrative Expenses | General and Administrative Expenses - | General and Administrative Expenses - |
Share-Based Compensation | Stock-Based Compensation Equity We account for stock option grants issued and vesting to employees based on ASC 718, Compensation Stock Compensation | Share-Based Compensation Equity We account for stock option grants issued and vesting to employees based on ASC 718, Compensation Stock Compensation |
Income Taxes | Income Taxes Income Taxes | Income Taxes We follow the provisions of ASC 740, Income Taxes When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in our consolidated financial statements in the period during which, based on all available evidence, we believe it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits, if any, are classified as interest expense and penalties and are included in selling, general and administrative expenses in our consolidated statements of operations. |
Commitments and Contingencies | Commitments and Contingencies If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our condensed consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. | Commitments and Contingencies If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. |
Net Loss Per Share | Net Income Loss Per Share Earnings per Share Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share, because the effect of their inclusion would have been anti-dilutive. Nine Months Ended September 30, Three Months Ended September 30, 2016 2015 2016 2015 Warrants to purchase common stock 1,895,122 3,000,000 1,895,122 3,000,000 Stock options 3,680,000 600,000 3,680,000 600,000 Total potentially dilutive securities 5,575,122 3,600,000 5,575,122 3,600,000 | Net Loss Per Share Earnings per Share Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share, because the effect of their inclusion would have been anti-dilutive. Years Ended December 31, 2015 2014 Warrants to purchase common stock 3,000,000 3,997,692 Stock options 600,000 Total potentially dilutive securities 3,600,000 3,997,692 |
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) |
Segment Reporting | Segment Reporting | Segment Reporting |
Concentration of Credit Risk | Concentration of Credit Risk The following tables show significant concentrations in our revenues and accounts receivable for the periods indicated: Percentage of Revenues: Nine Months Ended Three Months Ended 2016 2015 2016 2015 Customer A 88 % 9 % 80 % 35 % Customer B 12 % 25 % 20 % 34 % Customer C 19 % 31 % Customer D 37 % 0 % Percentage of Accounts Receivable: September 30, 2016 December 31, 2015 Customer A 57 % 56 % Customer B 43 % 41 % Customer C 1 % | Concentration of Credit Risk The following tables show significant concentrations in our revenues and accounts receivable for the periods indicated: Percentage of Revenue: Years Ended December 31, 2015 2014 Customer A 36 % % Customer B 32 % 80 % Customer C 18 % 4 % Percentage of Accounts Receivable: Years Ended December 31, 2015 2014 Customer D 56 % % Customer E 41 % % Customer F % 46 % Customer G % 33 % Customer H 1 % 21 % |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014 the FASB issued guidance on revenue from contracts with customers, which implements a five step process of how an entity should recognize revenue in order to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance will be effective at the beginning of fiscal year 2017, and early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. We are currently evaluating the impact that the adoption will have on our condensed consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing reporting. | Recently Issued Accounting Pronouncements In May 2014, the FASB issued guidance on revenue from contracts with customers, which implements a five step process of how an entity should recognize revenue in order to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance will be effective for us at the beginning of fiscal year 2018, and early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. We are currently evaluating the impact that the adoption will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing reporting. In August 2014, the FASB issued guidance on disclosure of uncertainties about an entity's ability to continue as a going concern. This guidance requires management to perform interim and annual assessments of an entity's ability to continue as a going concern within one year of the date the financial statements are issued and provides guidance on determining when and how to disclose going concern uncertainties in the financial statements. Certain disclosures will be required if conditions give rise to substantial doubt about an entity's ability to continue as a going concern. The guidance is effective for us at the beginning of fiscal year 2017, with early adoption permitted. We do not expect that the adoption of this standard will have a material effect on our consolidated financial statements. In April 2015, the FASB issued guidance requiring us to present debt issuance costs in the balance sheet as a reduction from the related debt liability rather than as an asset. Amortization of these costs will continue to be reported as interest expense. This guidance is effective for us at the beginning of fiscal year 2016, and early adoption is allowed. Retrospective application is required. Upon adoption, the deferred financing costs associated with our notes payable will be reclassified from Deferred financing costs to Notes payable, net. In November 2015, the FASB issued guidance requiring entities to present deferred tax assets and liabilities as noncurrent in a classified balance sheet instead of separating into current and noncurrent amounts. This guidance is effective for us at the beginning of fiscal year 2017, on a prospective or retrospective basis. Early adoption is permitted for all companies in any interim or annual period. We have not determined in what period it will adopt or what adoption method we will use and we are currently assessing the impact that this guidance may have on our consolidated financial statements. In February 2016, the FASB issued guidance on leases which requires entities to recognize right-of-use assets and lease liabilities on the balance sheet for the rights and obligations created by all leases, including operating leases, with terms of more than 12 months. The new guidance also requires additional disclosures on the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative information. The new guidance will be effective for us at the beginning of fiscal year 2019. Early adoption is permitted. We are in the process of evaluating the impact the adoption of this guidance will have on our consolidated financial statements and related disclosures. |
SUMMARY OF SIGNIFICANT ACCOUN29
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
Schedule of potentially dilutive securities that have been excluded from the computation of diluted net loss per share, because the effect of their inclusion would have been anti-dilutive | Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share, because the effect of their inclusion would have been anti-dilutive. Nine Months Ended September 30, Three Months Ended September 30, 2016 2015 2016 2015 Warrants to purchase common stock 1,895,122 3,000,000 1,895,122 3,000,000 Stock options 3,680,000 600,000 3,680,000 600,000 Total potentially dilutive securities 5,575,122 3,600,000 5,575,122 3,600,000 | Years Ended December 31, 2015 2014 Warrants to purchase common stock 3,000,000 3,997,692 Stock options 600,000 Total potentially dilutive securities 3,600,000 3,997,692 |
Schedule of significant concentrations in revenues and accounts receivable | The following tables show significant concentrations in our revenues and accounts receivable for the periods indicated: Percentage of Revenues: Nine Months Ended Three Months Ended 2016 2015 2016 2015 Customer A 88 % 9 % 80 % 35 % Customer B 12 % 25 % 20 % 34 % Customer C 19 % 31 % Customer D 37 % 0 % Percentage of Accounts Receivable: September 30, 2016 December 31, 2015 Customer A 57 % 56 % Customer B 43 % 41 % Customer C 1 % | Percentage of Revenue: Years Ended December 31, 2015 2014 Customer A 36 % % Customer B 32 % 80 % Customer C 18 % 4 % Percentage of Accounts Receivable: Years Ended December 31, 2015 2014 Customer D 56 % % Customer E 41 % % Customer F % 46 % Customer G % 33 % Customer H 1 % 21 % |
INVESTMENTS IN NON-MARKETABLE30
INVESTMENTS IN NON-MARKETABLE EQUITY SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Investments, All Other Investments [Abstract] | |
Schedule of Fair Value Assumptions Used to Value Warrants | Risk free interest rate 0.60 % Expected term (years) 0.5 Expected volatility 70 % Expected dividends 0 % |
PREPAID EXPENSES (Tables)
PREPAID EXPENSES (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Prepaid Expense, Current [Abstract] | ||
Schedule of prepaid expenses | Prepaid expenses and other assets consist of: September 30, December 31, Prepaid investor relations services $ $ 1,667 Prepaid licensing fees 35,000 Other prepaid services and fees 19,674 $ $ 56,341 | December 31, 2015 2014 Prepaid investor relations services $ 1,667 $ 121,500 Prepaid licensing fees 35,000 39,000 Other prepaid services and fees 19,674 16,900 $ 56,341 $ 177,400 |
EQUITY METHOD INVESTMENTS (Tabl
EQUITY METHOD INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of equity method investments | December 31, 2015 2014 Lone Mountain Partners, LLC 25% interest $ $ 50,000 Cannabinoid Research & Development Company Limited 50% interest 88,000 88,000 Total equity method investments $ 88,000 $ 138,000 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Accrued Liabilities, Current [Abstract] | ||
Schedule of accrued expenses | Our accrued expenses consist of: September 30, 2016 December 31, 2015 Accrued consulting fees $ 152,500 $ 110,000 Accrued wages and related expenses $ 629,780 Accrued interest expense 142,446 $ 101,185 Accrued other expenses 67,500 $ 87,568 $ 362,446 $ 928,533 | December 31, 2015 2014 Accrued consulting fees $ 110,000 $ 110,000 Accrued wages and related 629,780 433,963 Accrued interest expense 101,185 6,832 Accrued other expenses 87,568 Total accrued expenses $ 928,533 $ 550,795 |
FAIR VALUE MEASUREMENTS AND D34
FAIR VALUE MEASUREMENTS AND DERIVATIVE LIABILITIES (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | ||
Schedule of liabilities carried at fair value measured on a recurring basis | The following table provides the liabilities carried at fair value measured on a recurring basis as of September 30, 2016. Level 1 Level 2 Level 3 Total Derivative liabilities - convertible notes $ $ $ $ Derivative liabilities - warrants 547,200 547,200 Total $ $ 547,200 $ $ 547,200 | Level 1 Level 2 Level 3 Total Derivative liabilities $ $ $ 383,581 $ 383,581 |
Schedule of reconciliation of beginning and ending balances for financial instruments carried at fair value measured on a recurring basis | The following table reconciles the beginning and ending balances for our financial instruments that are carried at fair value measured on a recurring basis: Derivative liabilities as of December 31. 2015 $ 383,581 Loss on revaluation of derivative liabilities during the period 370,805 Loss on modification and cure of default of note payable to Slainte Ventures 237,027 Effect of payoff of JSJ and Vis Vires convertible notes (178,484 ) Conversion of note payable to Tangiers Investment Group (265,729 ) Derivative liabilities as of September 30, 2016 $ 547,200 | Derivative liabilities as of December 31, 2014 $ Additions to derivative liabilities for convertible debt conversion features recorded as debt discount 355,293 Additions to derivative liabilities for interest payable conversion features recorded as interest expense 4,695 Loss on revaluation of derivative liabilities during the year 23,593 Derivative liabilities as of December 31, 2015 $ 383,581 Derivative liability as of December 31, 2013 $ Additions to derivative liability for convertible debt conversion feature recorded as debt discount 151,937 Additions to derivative liability for interest payable conversion feature recorded as interest expense 15,320 Gain on revaluation of derivative liability during the year (6,099 ) Settlement of derivative liability on December 29, 2014 (161,158 ) Derivative liability as of December 31, 2014 $ |
Schedule of key inputs in valuation of embedded conversion features | These warrants are accounted for as a liability under ASC 815. The Company assesses the fair value of the warrants quarterly based on the Black-Scholes pricing model. See below for variables used in assessing the fair value. September 30, December 31, Expected life (years) 5.0 4.96 Risk-free interest rate 1.41 % 1.21 % Expected volatility 226 % 227 % | Risk-free interest rate 0.43% 0.72% Dividend yield Volatility 146% 172% Expected life in years 1.72 2.09 Exercise price $3.00 |
DEFERRED REVENUE (Tables)
DEFERRED REVENUE (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Deferred Revenue Disclosure [Abstract] | ||
Schedule of deferred revenue | Our deferred revenue consists of: September 30, December 31, Deferred revenue - WeedMD $ 428,750 $ 563,750 Deferred revenue - FoxBarry 200,000 428,750 763,750 Less - current portion (180,000 ) (380,000 ) Deferred revenue, net of current portion $ 248,750 $ 383,750 | December 31, 2015 2014 Deferred revenue WeedMD $ 563,750 $ 743,750 Deferred revenue - FoxBarry 200,000 200,000 763,750 943,750 Less current portion (380,000 ) (500,000 Deferred revenue, net of current portion $ 383,750 $ 443,750 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Notes Payable [Abstract] | ||
Schedule of notes payable | Our notes payable consisted of the following: September 30, December 31, Note payable - WeedMD $ $ 175,000 Note payable - Slainte Ventures, LLC 600,000 600,000 Total notes payable $ 600,000 $ 775,000 | December 31, 2015 2014 Note payable - WeedMD $ 175,000 $ 175,000 Note payable Slainte 600,000 600,000 Total notes payable $ 775,000 $ 775,000 |
Schedule of variables used in assessing fair value | These warrants are accounted for as a liability under ASC 815. The Company assesses the fair value of the warrants quarterly based on the Black-Scholes pricing model. See below for variables used in assessing the fair value. September 30, December 31, Expected life (years) 5.0 4.96 Risk-free interest rate 1.41 % 1.21 % Expected volatility 226 % 227 % | Risk-free interest rate 0.43% 0.72% Dividend yield Volatility 146% 172% Expected life in years 1.72 2.09 Exercise price $3.00 |
CONVERTIBLE NOTE PAYABLE (Table
CONVERTIBLE NOTE PAYABLE (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
CONVERTIBLE NOTE PAYABLE [Abstract] | ||
Schedule of convertible promissory notes | The following table summarizes our convertible promissory notes as of September 30, 2016: Issue Issued To Security Maturity Interest Base Principal 3/30/2016 Slainte Unsecured 12/30/16 12 % N/A $ 81,978 4/06/16 Slainte Unsecured 12/30/16 12 % N/A 75,000 7/5/2016 Slainte Unsecured 12/30/16 12 % N/A 50,000 8/10/16 JSJ Unsecured 5/10/17 12 % $0.20 per 125,000 $ 331,978 | Issue Date Issued to Maturity Date Interest Rate Default Interest Rate Base Conversion Rate VCR Look VCR Calculated Principal 10/6/2015 Vis Viers Group, Inc. Unsecured 6/30/2016 8% 22% 58% 10 days 3 lowest closing bids $ 59,000.00 10/12/15 JSJ Investments Inc. Unsecured 7/8/2016 12% 18% 55% 10 days 5 lowest trades 102,000.00 12/9/15 Tangiers Investment Group, LLC Secured by Certain Assets 12/8/2016 10% 20% 55% 10 days 3 lowest closing bids 220,000.00 Total principal outstanding at December 31, 2015 $ 381,000.00 |
Schedule of recorded loss on extinguishment of debt | Convertible note payable $ 1,657,500 Less: unamortized discount (822,250 ) Accrued interest payable 63,326 Derivative liability 161,158 Typenex Warrants #2 - #6 repurchased 576,152 Less: investor notes receivable (1,250,000 ) Less: accrued interest receivable (37,807 ) Less: cash paid (381,714 ) Loss on extinguishment of debt $ 33,635 |
STOCKHOLDERS' DEFICIT (Tables)
STOCKHOLDERS' DEFICIT (Tables) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Summary of share warrants outstanding | The following table summarizes our share warrants outstanding as of September 30, 2016 and December 31, 2015: Nine Months Ended September 30, 2016 Number of Shares Weighted Average Remaining Life (years) Weighted Average Exercise Price Warrants outstanding, December 31, 2015 3,000,000 1.00 $ 12.00 Issued 956,836 4.53 0.18 Shares issuable at the election of the noteholder in lieu of the payment of interest under the terms of the amended Slainte note 938,287 Exercised Expired (3,000,000 ) Warrants outstanding, end of period 1,895,122 4.53 $ 0.18 Warrants exercisable, September 30, 2016 1,895,122 4.53 $ 0.18 | Year Ended December 31, 2015 2014 Number of Shares Weighted Average Exercise Price Number of Shares Weighted Average Exercise Price Warrants outstanding, beginning of period 3,170,044 $ 11.52 $ Issued 3,997,692 9.75 Exercised Repurchased and cancelled (170,044 ) 3.00 (827,648 ) 3.00 Expired Warrants outstanding, end of period 3,000,000 $ 12.00 3,170,044 $ 11.52 Warrants exercisable, end of period 3,000,000 $ 12.00 3,170,044 $ 11.52 | |
Summary of stock options outstanding | The following table summarizes our stock options outstanding, as of September 30, 2016: Nine Months Ended September 30, 2016 Number of Shares Weighted Average Remaining Life (years) Weighted Average Exercise Price Stock options outstanding, beginning of period 3,680,000 9.1 $ 0.26 Issued Exercised Expired Stock options outstanding, end of period 3,680,000 9.1 $ 0.26 Stock options exercisable, September 30, 2016 3,680,000 9.1 $ 0.26 | Year Ended December 31, 2015 Number of Shares Weighted Average Exercise Price Stock options outstanding, beginning of period $ Issued 600,000 0.70 Exercised Expired Stock options outstanding, end of period 600,000 $ 0.70 Stock options exercisable, end of period 600,000 $ 0.70 | |
Stock Options [Member] | |||
Schedule of assumptions used for valuation utilizing the Black Scholes option pricing model for fair value | We calculated the fair value of each option to be approximately $0.70 per option utilizing the Black Scholes option pricing model and the following assumptions on the date of valuation: Stock price $ 0.70 Exercise price $ 0.70 Risk free interest rate 1.98 % Expected term (years) 10.0 Expected volatility 173 % Expected dividends 0 % | Stock price $ 0.70 Exercise price $ 0.70 Risk free interest rate 1.98 % Expected term (years) 10.0 Expected volatility 173 % Expected dividends 0 % | |
Common Stock Issued for Warrant Outstanding [Member] | |||
Schedule of assumptions used for valuation utilizing the Black Scholes option pricing model for fair value | Stock price $ 1.59 Exercise price $ 3.00 Risk free interest rate 1.05 % Expected term (years) 2.6 Expected volatility 183 % Expected dividends 0 % | Stock price $ 1.59 Exercise price $ 3.00 Risk free interest rate 1.05 % Expected term (years) 2.6 Expected volatility 183 % Expected dividends 0 % | |
Warrant [Member] | |||
Schedule of assumptions used for valuation utilizing the Black Scholes option pricing model for fair value | We calculated the fair value of each option to be approximately $0.20 per option utilizing the Black Scholes option pricing model and the following assumptions on the date of valuation: Stock price $ 0.20 Exercise price $ 0.20 Risk free interest rate 1.98 % Expected term (years) 10.0 Expected volatility 173 % Expected dividends 0 % | Stock price $ 1.03 Exercise price $ 3.00 Risk free interest rate 0.88 % Expected term (years) 3.05 Expected volatility 146 % Expected dividends 0 % |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of share-based compensation expense | Year Ended December 31, 2015 2014 Share-based compensation expense shares issued for services $ 47,880 $ 83,600 Share-based compensation expense amortization of shares issued for prepaid services 302,789 50,421 Share-based compensation expense accrual of shares to be issued for services 67,500 Share-based compensation expense accrual of estimated share-based awards to officers 612,512 417,664 $ 1,030,681 $ 551,685 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of sources and tax effects of the differences for the periods | Years Ended December 31, 2015 2014 Statutory U.S. federal tax rate 39% 39% Effect of increase in valuation allowance (39% ) (39% ) % % |
Schedule of changes in cumulative net deferred tax assets | December 31, 2015 2014 Net loss carry forward $ 1,124,511 $ 962,662 Valuation allowance (1,124,511 ) (962,662 ) $ $ |
Schedule of reconciliation of income taxes computed at the statutory rate | Years Ended December 31, 2015 2014 Tax benefit at statutory rate $ 1,124,511 $ 962,662 Valuation allowance (1,124,511 ) (962,662 ) $ $ |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Schedule of amounts due from related parties | December 31, 2015 2014 Affiliated customer $ $ 3,112 Lone Mountain 40,900 Blue River 3,284 CRD 5,000 Total due from related parties $ 8,284 $ 44,012 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Loss from Discontinued Operations | Years Ended December 31, 2015 2014 Revenues $ $ 20,684 Operating expenses: Selling, general and administrative 63,872 Depreciation Loss on disposal of assets 15,704 Total operating expenses 79,576 Loss from discontinued operations, before income taxes (58,892 Provision for income taxes Loss from discontinued operations, net of income taxes $ $ (58,892 ) |
SUBSEQUENT EVENTS (Tables)
SUBSEQUENT EVENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
Schedule of assumptions on the date of valuation utilizing the Black Scholes option pricing model for fair value of each option | Stock price $ 0.20 Exercise price $ 0.20 Risk free interest rate 2.03 % Expected term (years) 10.0 Expected volatility 173 % Expected dividends 0 % |
BUSINESS ORGANIZATION AND NAT44
BUSINESS ORGANIZATION AND NATURE OF OPERATIONS (Details) - USD ($) | 1 Months Ended | ||||
Mar. 31, 2014 | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Mar. 26, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Amount of payable owed to former officer and director, exchanged for assets sold | $ 1,500,000 | ||||
Number of common shares issued in exchange for certain intellectual property | 38,690,000 | ||||
Total number of common shares previously outstanding, cancelled during period | 41,690,000 | ||||
Common stock, shares outstanding | 47,832,198 | 44,988,500 | 44,060,000 | 43,620,000 |
SUMMARY OF SIGNIFICANT ACCOUN45
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016USD ($)Item | Dec. 31, 2015USD ($)Item | Dec. 31, 2014USD ($) | |
Property, Plant and Equipment [Line Items] | |||
Cash equivalents | |||
Number of operating segment | Item | 1 | 1 | |
Allowance for doubtful accounts | $ 30,000 | $ 4,340 | |
Bad debt expense | 24,185 | ||
Shipping and handling costs | 1,013 | ||
Advertising Costs | $ 16,500 | $ 304 | |
Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 10 years | 3 years | |
Estimated useful life | 10 years | ||
Equity Method Investments, Percentage | 20.00% | 20.00% | |
Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 20 years | 5 years | |
Estimated useful life | 20 years | ||
Equity Method Investments, Percentage | 50.00% | 50.00% |
SUMMARY OF SIGNIFICANT ACCOUN46
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of anti-dilutive securities) (Details) - shares | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Antidilutive securities excluded from computation of diluted net loss per share | 5,575,122 | 3,600,000 | 5,575,122 | 3,600,000 | 3,600,000 | 3,997,692 |
Warrant [Member] | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Antidilutive securities excluded from computation of diluted net loss per share | 1,895,122 | 3,000,000 | 1,895,122 | 3,000,000 | 3,000,000 | 3,997,692 |
Stock Options [Member] | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Antidilutive securities excluded from computation of diluted net loss per share | 3,680,000 | 600,000 | 3,680,000 | 600,000 | 600,000 |
SUMMARY OF SIGNIFICANT ACCOUN47
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of concentration of credit risk) (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue [Member] | Customer A [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk percentage | 80.00% | 35.00% | 88.00% | 9.00% | 36.00% | 0.00% |
Revenue [Member] | Customer B [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk percentage | 20.00% | 34.00% | 12.00% | 25.00% | 32.00% | 80.00% |
Revenue [Member] | Customer C [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk percentage | 31.00% | 19.00% | 18.00% | 4.00% | ||
Revenue [Member] | Customer D [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk percentage | 0.00% | 37.00% | ||||
Accounts Receivable [Member] | Customer A [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk percentage | 57.00% | 56.00% | ||||
Accounts Receivable [Member] | Customer B [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk percentage | 43.00% | 41.00% | ||||
Accounts Receivable [Member] | Customer C [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk percentage | 1.00% | |||||
Accounts Receivable [Member] | Customer D [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk percentage | 56.00% | 0.00% | ||||
Accounts Receivable [Member] | Customer E [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk percentage | 41.00% | 0.00% | ||||
Accounts Receivable [Member] | Customer F [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk percentage | 0.00% | 46.00% | ||||
Accounts Receivable [Member] | Customer G [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk percentage | 0.00% | 33.00% | ||||
Accounts Receivable [Member] | Customer H [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk percentage | 1.00% | 21.00% |
GOING CONCERN (Details)
GOING CONCERN (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
GOING CONCERN [Abstract] | ||||||
Net loss (income) | $ 296,575 | $ 318,055 | $ 962,953 | $ 1,974,906 | $ 2,883,362 | $ 2,468,364 |
Net cash used in operating activities | 258,607 | $ 304,297 | 525,148 | 1,189,057 | ||
Working capital deficit | 2,132,349 | 2,132,349 | 2,410,679 | |||
Accumulated deficit | $ 6,471,282 | $ 6,471,282 | $ 5,508,329 | $ 2,624,967 |
INVESTMENTS IN NON-MARKETABLE49
INVESTMENTS IN NON-MARKETABLE EQUITY SECURITIES (Schedule of Assumptions) (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Risk free interest rate | 1.41% | 1.21% | |
Expected term | 5 years | 4 years 11 months 16 days | |
Expected volatility | 226.00% | 227.00% | |
Cost-method Investments [Member] | Warrant [Member] | WeedMD RX Inc. (''WMD'') [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Pricing model | Black Scholes | ||
Risk free interest rate | 0.60% | ||
Expected term | 6 months | ||
Expected volatility | 70.00% | ||
Expected dividends | 0.00% |
INVESTMENTS IN NON-MARKETABLE50
INVESTMENTS IN NON-MARKETABLE EQUITY SECURITIES (Narrative) (Details) - USD ($) | Dec. 09, 2014 | Jun. 09, 2014 | Jun. 09, 2014 | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Mar. 24, 2016 | Jun. 30, 2014 |
Schedule of Cost-method Investments [Line Items] | ||||||||
Common shares, price per share | $ 0.17 | |||||||
Investments in non-marketable equity securities | $ 15,125 | $ 205,275 | $ 593,750 | |||||
Loss on investment in non-marketable equity securities | 388,475 | 300,000 | ||||||
Notes payable | 600,000 | $ 775,000 | $ 775,000 | |||||
WeedMD RX Inc. (''WMD'') [Member] | ||||||||
Schedule of Cost-method Investments [Line Items] | ||||||||
Common shares received in exchange for future consulting services and use of our intellectual property | 1,187,500 | 1,187,500 | ||||||
Warrants received in exchange for future consulting services and use of our intellectual property | 3,000,000 | 3,000,000 | ||||||
Equity Method Investments, Percentage | 4.29% | 4.29% | ||||||
Exercise price of warrants received to purchase shares | $ 0.50 | |||||||
Common shares, price per share | $ 0.50 | |||||||
Investments in non-marketable equity securities | $ 593,750 | $ 593,750 | $ 15,125 | |||||
Warrants, price per warrant | $ 0.10 | |||||||
Warrants expired | 3,000,000 | |||||||
Loss on investment in non-marketable equity securities | $ 300,000 | |||||||
Sale of common stock | 1,100,000 | 1,100,000 | ||||||
Notes payable | $ 175,000 | |||||||
Shares of investment owned | 87,500 | |||||||
CAD [Member] | ||||||||
Schedule of Cost-method Investments [Line Items] | ||||||||
Warrants, price per warrant | $ 0.50 |
PREPAID EXPENSES (Details)
PREPAID EXPENSES (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Prepaid investor relations services | $ 1,667 | $ 121,500 | |
Prepaid licensing fees | 35,000 | 39,000 | |
Other prepaid services and fees | 19,674 | 16,900 | |
Total prepaid expenses | $ 56,341 | $ 177,400 |
INTANGIBLES (Details)
INTANGIBLES (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Design Marks and Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 20 years | 10 years |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 10 years | 20 years |
EQUITY METHOD INVESTMENTS (Sche
EQUITY METHOD INVESTMENTS (Schedule of equity method investments) (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Aug. 25, 2014 | Aug. 15, 2014 | Aug. 14, 2014 | Dec. 31, 2013 |
Schedule of Equity Method Investments [Line Items] | |||||||
Equity method investments | $ 88,000 | $ 88,000 | $ 138,000 | ||||
Lone Mountain [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Interest owned (as a percentage) | 25.00% | 25.00% | 25.00% | 25.00% | |||
Equity method investments | $ 50,000 | $ 50,000 | $ 50,000 | ||||
CRD [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Interest owned (as a percentage) | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% | ||
Equity method investments | $ 88,000 | $ 88,000 | $ 88,000 | $ 88,000 | $ 88,000 |
EQUITY METHOD INVESTMENTS (Narr
EQUITY METHOD INVESTMENTS (Narrative) (Details) - USD ($) | Aug. 15, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Jul. 16, 2015 | Aug. 25, 2014 | Aug. 14, 2014 | Dec. 31, 2013 |
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Equity method investments | $ 88,000 | $ 138,000 | $ 88,000 | $ 88,000 | $ 138,000 | ||||||||
Due from related parties | 8,284 | $ 44,012 | 8,284 | 8,284 | 44,012 | ||||||||
Equity in net loss of unconsolidated affiliate | $ (90,900) | $ (90,900) | |||||||||||
CRD [Member] | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Interest acquired (as a percentage) | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% | |||||||
Equity method investments | $ 88,000 | $ 88,000 | $ 88,000 | $ 88,000 | $ 88,000 | $ 88,000 | |||||||
Shares of common stock issuable for acquisition of interest | 40,000 | ||||||||||||
Lone Mountain [Member] | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Interest acquired (as a percentage) | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | ||||||||
Equity method investments | $ 50,000 | $ 50,000 | $ 50,000 | $ 50,000 | |||||||||
Operating Losses | $ 400,000 | ||||||||||||
Advances to affiliate | 40,900 | ||||||||||||
Due from related parties | $ 40,900 | $ 40,900 | |||||||||||
Equity in net loss of unconsolidated affiliate | $ 90,900 | ||||||||||||
Ownership interest transferred (as a percent) | 25.00% |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Accrued Liabilities, Current [Abstract] | |||
Accrued consulting fees | $ 152,500 | $ 110,000 | $ 110,000 |
Accrued wages and related | 629,780 | 433,963 | |
Accrued interest expense | 142,446 | 101,185 | 6,832 |
Accrued other expenses | 67,500 | 87,568 | |
Total accrued expenses | $ 362,446 | $ 928,533 | $ 550,795 |
FAIR VALUE MEASUREMENTS AND D56
FAIR VALUE MEASUREMENTS AND DERIVATIVE LIABILITIES (Schedule of Convertible Notes Payable) (Details) | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Reconciliation of beginning and ending balances for financial instruments carried at fair value measured on a recurring basis | |
Derivative liability at the beginning of the period | $ 383,581 |
Derivative liability at the end of the period | 547,200 |
Convertible Notes Payable [Member] | |
Reconciliation of beginning and ending balances for financial instruments carried at fair value measured on a recurring basis | |
Derivative liability at the beginning of the period | 383,581 |
Loss on revaluation of derivative liabilities during the period | 370,805 |
Loss on modification and cure of default of note payable to Slainte Ventures | 237,027 |
Effect of payoff of JSJ and Vis Vires convertible notes | (178,484) |
Conversion of a portion of the convertible note payable to Tangiers Investment Group | (265,729) |
Derivative liability at the end of the period | $ 547,200 |
FAIR VALUE MEASUREMENTS AND D57
FAIR VALUE MEASUREMENTS AND DERIVATIVE LIABILITIES (Schedule of fair value measured on a recurring basis) (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | $ 547,200 | $ 383,581 |
Warrant [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | 547,200 | |
Convertible Note [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | ||
Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | ||
Level 1 [Member] | Warrant [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | ||
Level 1 [Member] | Convertible Note [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | ||
Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | 547,200 | |
Level 2 [Member] | Warrant [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | 547,200 | |
Level 2 [Member] | Convertible Note [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | ||
Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | $ 383,581 | |
Level 3 [Member] | Warrant [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | ||
Level 3 [Member] | Convertible Note [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities |
FAIR VALUE MEASUREMENTS AND D58
FAIR VALUE MEASUREMENTS AND DERIVATIVE LIABILITIES (Schedule of reconciliation of beginning and ending balances) (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of beginning and ending balances for financial instruments carried at fair value measured on a recurring basis | |||
Derivative liability at the beginning of the period | $ 383,581 | ||
Derivative liability at the end of the period | 547,200 | $ 383,581 | |
Derivative Financial Instruments, Liabilities [Member] | |||
Reconciliation of beginning and ending balances for financial instruments carried at fair value measured on a recurring basis | |||
Derivative liability at the beginning of the period | $ 383,581 | ||
Settlement of derivative liability on December 29, 2014 | $ (161,158) | ||
Derivative liability at the end of the period | 383,581 | ||
Derivative Financial Instruments, Liabilities [Member] | Interest Expense [Member] | |||
Reconciliation of beginning and ending balances for financial instruments carried at fair value measured on a recurring basis | |||
Additions to derivative liability recorded in statements of operations | 4,695 | 15,320 | |
Derivative Financial Instruments, Liabilities [Member] | Gain (Loss) on Derivative Instruments [Member] | |||
Reconciliation of beginning and ending balances for financial instruments carried at fair value measured on a recurring basis | |||
Additions to derivative liability recorded in statements of operations | 23,593 | (6,099) | |
Derivative Financial Instruments, Liabilities [Member] | Amortization of Debt Discount [Member] | |||
Reconciliation of beginning and ending balances for financial instruments carried at fair value measured on a recurring basis | |||
Additions to derivative liability recorded in statements of operations | $ 355,293 | $ 151,937 |
FAIR VALUE MEASUREMENTS AND D59
FAIR VALUE MEASUREMENTS AND DERIVATIVE LIABILITIES (Schedule of key inputs in valuation) (Details) - $ / shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Risk-free interest rate (as a percent) | 1.41% | 1.21% | |
Volatility (as a percent) | 226.00% | 227.00% | |
Expected life in years | 5 years | 4 years 11 months 16 days | |
Derivative Financial Instruments, Liabilities [Member] | Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Dividend yield | |||
Exercise price (in dollars per share) | $ 3 | ||
Derivative Financial Instruments, Liabilities [Member] | Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Maximum [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Risk-free interest rate (as a percent) | 0.72% | ||
Volatility (as a percent) | 172.00% | ||
Expected life in years | 2 years 1 month 2 days | ||
Derivative Financial Instruments, Liabilities [Member] | Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Minimum [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Risk-free interest rate (as a percent) | 0.43% | ||
Volatility (as a percent) | 146.00% | ||
Expected life in years | 1 year 8 months 19 days |
FAIR VALUE MEASUREMENTS AND D60
FAIR VALUE MEASUREMENTS AND DERIVATIVE LIABILITIES (Narrative) (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Accrued interest payable | $ 63,326 | ||
Convertible Note [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt instrument initial borrowing | $ 322,000 | ||
Accrued interest payable | $ 28,724 | ||
Typenex Co Investment Llc [Member] | Convertible Note [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt instrument initial borrowing | $ 381,000 | 282,500 | |
Accrued interest payable | $ 5,121 | $ 28,473 |
DEFERRED REVENUE (Narrative) (D
DEFERRED REVENUE (Narrative) (Details) - USD ($) | Jun. 09, 2014 | Jun. 09, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 28, 2014 |
Deferred Revenue Arrangement [Line Items] | ||||||||||
Deferred revenue | $ 428,750 | $ 943,750 | $ 428,750 | $ 763,750 | $ 943,750 | |||||
WeedMD RX Inc. (''WMD'') [Member] | ||||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||||
Common shares received in exchange for future consulting services and use of our intellectual property | 1,187,500 | 1,187,500 | ||||||||
Warrants received in exchange for future consulting services and use of our intellectual property | 3,000,000 | 3,000,000 | ||||||||
Fair value of securities recorded as deferred revenue | $ 893,750 | |||||||||
Deferred revenue recognized per month | 15,000 | 15,000 | ||||||||
Total deferred revenue recognized | 45,000 | $ 45,000 | $ 150,000 | 135,000 | $ 135,000 | 180,000 | 150,000 | |||
Initial revenue recognized period | 3 years | |||||||||
Deferred revenue | 428,500 | $ 743,750 | 428,500 | 563,750 | 743,750 | |||||
Fox Barry Farms Llc [Member] | ||||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||||
Prepaid royalty payment | $ 200,000 | |||||||||
Deferred revenue | $ 200,000 | $ 200,000 | $ 200,000 | $ 200,000 | $ 200,000 |
DEFERRED REVENUE (Schedule of d
DEFERRED REVENUE (Schedule of deferred revenue) (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Deferred Revenue Arrangement [Line Items] | ||||
Deferred revenue | $ 428,750 | $ 763,750 | $ 943,750 | |
Less - current portion | (180,000) | (380,000) | (500,000) | |
Deferred revenue, net of current portion | 248,750 | 383,750 | 443,750 | |
WeedMD RX Inc. (''WMD'') [Member] | ||||
Deferred Revenue Arrangement [Line Items] | ||||
Deferred revenue | 428,500 | 563,750 | 743,750 | |
Less - current portion | (180,000) | |||
Fox Barry Farms Llc [Member] | ||||
Deferred Revenue Arrangement [Line Items] | ||||
Deferred revenue | $ 200,000 | 200,000 | $ 200,000 | |
Less - current portion | $ (200,000) |
NOTES PAYABLE (Narrative) (Deta
NOTES PAYABLE (Narrative) (Details) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
Dec. 30, 2016 | Dec. 17, 2016 | Jul. 31, 2014 | Mar. 31, 2014 | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jul. 02, 2016 | Apr. 06, 2016 | Mar. 30, 2016 | Mar. 16, 2016 | Dec. 18, 2015 | Dec. 18, 2014 | Jul. 07, 2014 | |
Short-term Debt [Line Items] | ||||||||||||||
Debt instrument, interest rate | 12.00% | |||||||||||||
Number of shares of common stock issued | 38,690,000 | |||||||||||||
Number of trading days | 10 days | |||||||||||||
Loss on the change in fair value of warrant liability | $ 310,173 | |||||||||||||
Recognition of an extinguishment loss | 133,077 | |||||||||||||
Accrued interest payable | $ 142,446 | $ 101,185 | $ 6,832 | |||||||||||
SlainteVentures, LLC [Member] | ||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||
Debt instrument, interest rate | 12.00% | 12.00% | 12.00% | 18.00% | ||||||||||
Number of shares called by warrants | 416,667 | |||||||||||||
Warrant exercise price | $ 0.18 | |||||||||||||
Warrant Term | 5 years | |||||||||||||
Default rate of interest under the note | 80.00% | |||||||||||||
SlainteVentures, LLC [Member] | Forecast [Member] | ||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||
Value of shares of common stock issued | $ 100,000 | |||||||||||||
Number of trading days | 30 days | |||||||||||||
Notes Payable [Member] | Unrelated Third Party [Member] | ||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||
Debt instrument, face amount | $ 600,000 | |||||||||||||
Debt instrument, interest rate | 12.00% | |||||||||||||
Default rate of interest under the note | 18.00% | |||||||||||||
Debt issuance costs | $ 13,500 | |||||||||||||
Interest expense | 80,482 | 2,565 | ||||||||||||
Accrued interest payable | 83,047 | 2,565 | ||||||||||||
Notes Payable [Member] | WeedMD RX Inc. (''WMD'') [Member] | ||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||
Debt instrument, face amount | $ 175,000 | |||||||||||||
Debt instrument, interest rate | 5.00% | |||||||||||||
Number of shares of common stock issued | 1,100,000 | |||||||||||||
Interest expense | 8,750 | 4,267 | ||||||||||||
Accrued interest payable | $ 13,017 | $ 4,267 |
NOTES PAYABLE (Schedule of Note
NOTES PAYABLE (Schedule of Notes Payable) (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Short-term Debt [Line Items] | |||
Notes payable | $ 600,000 | $ 775,000 | $ 775,000 |
Unrelated Third Party [Member] | Notes Payable [Member] | |||
Short-term Debt [Line Items] | |||
Notes payable | 600,000 | 600,000 | |
WeedMD RX Inc. (''WMD'') [Member] | |||
Short-term Debt [Line Items] | |||
Notes payable | 175,000 | ||
WeedMD RX Inc. (''WMD'') [Member] | Notes Payable [Member] | |||
Short-term Debt [Line Items] | |||
Notes payable | 175,000 | $ 175,000 | |
SlainteVentures, LLC [Member] | Notes Payable [Member] | |||
Short-term Debt [Line Items] | |||
Notes payable | 600,000 | 600,000 | |
Donaldson Consulting [Member] | Notes Payable [Member] | |||
Short-term Debt [Line Items] | |||
Notes payable |
NOTES PAYABLE (Schedule of key
NOTES PAYABLE (Schedule of key inputs in valuation) (Details) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Notes Payable [Abstract] | ||
Expected life (years) | 5 years | 4 years 11 months 16 days |
Risk-free interest rate | 1.41% | 1.21% |
Expected volatility | 226.00% | 227.00% |
CONVERTIBLE NOTES PAYABLE (Summ
CONVERTIBLE NOTES PAYABLE (Summary of Convertible Promissory Notes Issued) (Details) - USD ($) | 9 Months Ended | ||||
Sep. 30, 2016 | Dec. 30, 2016 | Aug. 10, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Interest Rate | 12.00% | ||||
Total principal outstanding | $ 331,978 | $ 381,000 | $ 1,657,500 | ||
Slainte Ventures Issued 3/30/2016 [Member] | 2016 Convertible Notes [Member] | |||||
Issue Date | Mar. 30, 2016 | ||||
Maturity Date | Dec. 30, 2016 | ||||
Interest Rate | 12.00% | ||||
Total principal outstanding | $ 81,978 | ||||
Slainte Ventures Issued 4/6/2016 [Member] | 2016 Convertible Notes [Member] | |||||
Issue Date | Apr. 6, 2016 | ||||
Maturity Date | Dec. 30, 2016 | ||||
Interest Rate | 12.00% | ||||
Total principal outstanding | $ 75,000 | ||||
Slainte Ventures Issued 7/5/16 [Member] | 2016 Convertible Notes [Member] | |||||
Issue Date | Jul. 5, 2016 | ||||
Maturity Date | Dec. 30, 2016 | ||||
Interest Rate | 12.00% | ||||
Total principal outstanding | $ 50,000 | ||||
JSJ Investments [Member] | |||||
Interest Rate | 12.00% | ||||
JSJ Investments [Member] | 2016 Convertible Notes [Member] | |||||
Issue Date | Aug. 10, 2016 | ||||
Maturity Date | May 10, 2017 | ||||
Interest Rate | 12.00% | ||||
Base Conversion Rate | $0.20 PER SHARE DURING FIRST 180 DAYS; 45% DISCOUNT THEREAFTER | ||||
Total principal outstanding | $ 125,000 |
CONVERTIBLE NOTES PAYABLE (Sche
CONVERTIBLE NOTES PAYABLE (Schedule of summarizes our convertible promissory notes issued) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2014 | |
Interest Rate | 12.00% | |||
Total principal outstanding | $ 381,000 | $ 331,978 | $ 1,657,500 | |
Vis Viers Group, Inc. [Member] | 2015 Convertible Notes [Member] | ||||
Issue Date | Oct. 6, 2015 | |||
Maturity Date | Jun. 30, 2016 | |||
Interest Rate | 8.00% | |||
Default Interest Rate | 22.00% | |||
Base Conversion Rate | 58.00% | |||
VCR Look back Period | 10 days | |||
VCR Calculated Using | 3 lowest closing bids | |||
Total principal outstanding | $ 59,000 | |||
JSJ Investments Inc. [Member] | 2015 Convertible Notes [Member] | ||||
Issue Date | Oct. 12, 2015 | |||
Maturity Date | Jul. 8, 2016 | |||
Interest Rate | 12.00% | |||
Default Interest Rate | 18.00% | |||
Base Conversion Rate | 55.00% | |||
VCR Look back Period | 10 days | |||
VCR Calculated Using | 5 lowest trades | |||
Total principal outstanding | $ 102,000 | |||
Tangiers Investment Group, LLC [Member] | 2015 Convertible Notes [Member] | ||||
Issue Date | Dec. 9, 2015 | |||
Maturity Date | Dec. 8, 2016 | |||
Interest Rate | 10.00% | |||
Default Interest Rate | 20.00% | |||
Base Conversion Rate | 55.00% | |||
VCR Look back Period | 10 days | |||
VCR Calculated Using | 3 lowest closing bids | |||
Total principal outstanding | $ 220,000 |
CONVERTIBLE NOTE PAYABLE (Sched
CONVERTIBLE NOTE PAYABLE (Schedule of Recorded a Loss on Extinguishment of Debt) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2014 | Sep. 30, 2016 | Dec. 31, 2015 | |
CONVERTIBLE NOTE PAYABLE [Abstract] | |||
Convertible note payable | $ 1,657,500 | $ 331,978 | $ 381,000 |
Less: unamortized discount | (822,250) | ||
Accrued interest payable | 63,326 | ||
Derivative liability | 161,158 | ||
Warrants repurchased | 576,152 | ||
Less: investor notes receivable | (1,250,000) | ||
Less: accrued interest receivable | (37,807) | ||
Less: cash paid | (381,714) | ||
Loss on extinguishment of debt | $ 33,635 |
CONVERTIBLE NOTE PAYABLE (Narra
CONVERTIBLE NOTE PAYABLE (Narrative) (Details) | Aug. 10, 2016USD ($)$ / shares | Jul. 05, 2016USD ($)$ / shares | Apr. 06, 2016USD ($)$ / shares | Mar. 31, 2016$ / shares | Aug. 15, 2014USD ($) | Aug. 13, 2014USD ($)Item$ / sharesshares | Dec. 30, 2016$ / shares | Mar. 31, 2016USD ($) | Mar. 30, 2016USD ($) | Sep. 30, 2016USD ($)shares | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)shares | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2013USD ($) | Jul. 02, 2016 | Dec. 18, 2015 | Feb. 10, 2015$ / sharesshares | Sep. 30, 2013USD ($)$ / shares |
Debt Instrument [Line Items] | ||||||||||||||||||||
Convertible note payable | $ 331,978 | $ 331,978 | $ 381,000 | $ 1,657,500 | ||||||||||||||||
Less - unamortized discount | 0 | 0 | (272,793) | |||||||||||||||||
Convertible notes payable-current portion, net | 331,978 | 331,978 | 108,207 | |||||||||||||||||
Debt instrument, interest rate | 12.00% | |||||||||||||||||||
Original issue discount | 822,250 | |||||||||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 1.59 | |||||||||||||||||||
Net cash proceeds received from initial borrowing | 316,478 | $ 50,000 | ||||||||||||||||||
Loss on origination of derivative liability | (331,618) | (332,456) | (23,593) | 6,099 | ||||||||||||||||
Unamortized debt discount applicable to initial borrowing [Abstract] | ||||||||||||||||||||
Less: loss on origination of derivative | (12,810) | |||||||||||||||||||
Fair value of the Warrant issued recorded as debt discount under remaining borrowing | 576,152 | |||||||||||||||||||
Components of convertible debt, net | ||||||||||||||||||||
Debt discount - conversion feature expensed as loss on origination of derivative | (12,810) | |||||||||||||||||||
Debt discount amortization and interest expense | 266,711 | $ 82,500 | $ 161,402 | |||||||||||||||||
Repurchased and cancelled (shares) | shares | (170,044) | (827,648) | ||||||||||||||||||
Deferred financing costs, net | $ 32,400 | |||||||||||||||||||
Amortization of deferred financing costs | 8,700 | |||||||||||||||||||
Accrued interest payable | 63,326 | |||||||||||||||||||
Interest income recognized | 37,807 | |||||||||||||||||||
Proceeds from debt, net | $ 761,500 | |||||||||||||||||||
Average closing price of common stock | $ / shares | $ 0.45 | |||||||||||||||||||
Warrant [Member] | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 0.70 | $ 0.70 | ||||||||||||||||||
Typenex Co Investment Llc [Member] | Five Unsecured Investor Notes [Member] | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Convertible note payable | $ 1,657,500 | |||||||||||||||||||
Typenex Co Investment Llc [Member] | Warrant [Member] | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Number of warrants issued to purchase shares of common stock | shares | 997,692 | 170,044 | ||||||||||||||||||
Number of shares for which warrant became exercisable | shares | 170,044 | |||||||||||||||||||
Number of tranches in which remaining warrants are exercisable into number of shares | Item | 5 | |||||||||||||||||||
Frequency of number of shares of common stock issuable under the Warrants | Item | 3 | |||||||||||||||||||
Expiration date | Aug. 31, 2017 | |||||||||||||||||||
Convertible Note [Member] | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Debt instrument, face amount | $ 50,000 | |||||||||||||||||||
Debt instrument, term | 25 months | |||||||||||||||||||
Debt conversion, price per share | $ / shares | $ 3 | $ 0.005 | ||||||||||||||||||
Debt instrument initial borrowing | 322,000 | 322,000 | ||||||||||||||||||
Components of convertible debt, net | ||||||||||||||||||||
Note | $ 50,000 | |||||||||||||||||||
Accrued interest payable | $ 28,724 | $ 28,724 | ||||||||||||||||||
Convertible Note [Member] | Warrant [Member] | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 3 | |||||||||||||||||||
Convertible Note [Member] | Typenex Co Investment Llc [Member] | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Debt instrument, interest rate | 10.00% | |||||||||||||||||||
Debt instrument, face amount | $ 1,657,500 | |||||||||||||||||||
Original issue discount | $ 225,000 | 150,000 | ||||||||||||||||||
Legal expenses | 32,500 | 7,500 | ||||||||||||||||||
Payment of brokerage fees | 25,000 | |||||||||||||||||||
Net cash proceeds received from initial borrowing | 25,000 | |||||||||||||||||||
Debt instrument initial borrowing | $ 381,000 | $ 282,500 | ||||||||||||||||||
Loss on origination of derivative liability | 12,810 | |||||||||||||||||||
Portion of fair value of initial borrowing conversion feature recorded as debt discount under initial borrowing | 139,127 | |||||||||||||||||||
Unamortized debt discount applicable to initial borrowing [Abstract] | ||||||||||||||||||||
Debt discount - Warrant #1 | 118,373 | |||||||||||||||||||
Debt discount - conversion feature | 151,937 | |||||||||||||||||||
Unamortized debt discount - end of period | 282,500 | |||||||||||||||||||
Debt Instrument Initial Borrowing Unamortized, Discount | 25,000 | |||||||||||||||||||
Debt instrument remaining borrowing | 1,375,000 | |||||||||||||||||||
Original issue discount under remaining borrowing | 125,000 | |||||||||||||||||||
Fair value of the Warrant issued recorded as debt discount under remaining borrowing | 576,152 | |||||||||||||||||||
Total debt discount under remaining borrowing | 125,000 | |||||||||||||||||||
Components of convertible debt, net | ||||||||||||||||||||
Note | $ 1,657,500 | |||||||||||||||||||
Debt discount - conversion feature | $ 151,937 | |||||||||||||||||||
Debt discount amortization and interest expense | 161,402 | |||||||||||||||||||
Interest expense | 63,326 | |||||||||||||||||||
Fair value of the conversion feature applicable to accrued interest | $ 15,320 | |||||||||||||||||||
Repurchased and cancelled (shares) | shares | 827,648 | |||||||||||||||||||
Accrued interest payable | $ 5,121 | $ 28,473 | ||||||||||||||||||
2016 Convertible Notes [Member] | ||||||||||||||||||||
Components of convertible debt, net | ||||||||||||||||||||
Authorized but unissued common stock | shares | 10,200,000 | 10,200,000 | ||||||||||||||||||
2016 Convertible Notes [Member] | Minimum [Member] | ||||||||||||||||||||
Components of convertible debt, net | ||||||||||||||||||||
Prepayment premiums | 10.00% | |||||||||||||||||||
2016 Convertible Notes [Member] | Maximum [Member] | ||||||||||||||||||||
Components of convertible debt, net | ||||||||||||||||||||
Prepayment premiums | 40.00% | |||||||||||||||||||
2015 Convertible Notes [Member] | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Number of trading days immediately preceding the applicable conversion | 180 days | |||||||||||||||||||
Components of convertible debt, net | ||||||||||||||||||||
Debt discount amortization and interest expense | $ 82,500 | |||||||||||||||||||
Holding rate of issued and outstanding common stock | 9.99% | |||||||||||||||||||
Authorized but unissued common stock | shares | 10,200,000 | |||||||||||||||||||
Deferred financing costs, net | $ 41,100 | |||||||||||||||||||
Amortization of deferred financing costs | 8,700 | |||||||||||||||||||
Aggregate fair value of the derivative liabilities | 355,293 | |||||||||||||||||||
Accrued interest payable | 5,121 | |||||||||||||||||||
Additional Interest payable | $ 4,694 | |||||||||||||||||||
2015 Convertible Notes [Member] | Minimum [Member] | ||||||||||||||||||||
Components of convertible debt, net | ||||||||||||||||||||
Prepayment premiums | 10.00% | |||||||||||||||||||
Minimum default penalty amount, rate | 25.00% | |||||||||||||||||||
2015 Convertible Notes [Member] | Maximum [Member] | ||||||||||||||||||||
Components of convertible debt, net | ||||||||||||||||||||
Prepayment premiums | 40.00% | |||||||||||||||||||
Minimum default penalty amount, rate | 50.00% | |||||||||||||||||||
JSJ Investments [Member] | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Debt instrument, interest rate | 12.00% | |||||||||||||||||||
Components of convertible debt, net | ||||||||||||||||||||
Minimum default penalty amount, rate | 15.00% | |||||||||||||||||||
Proceeds from debt, net | $ 125,000 | |||||||||||||||||||
Average closing price of common stock | $ / shares | $ 0.45 | |||||||||||||||||||
Conversions rate on issue and outstandng common stock | 4.99% | |||||||||||||||||||
JSJ Investments [Member] | 2016 Convertible Notes [Member] | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Convertible note payable | $ 125,000 | $ 125,000 | ||||||||||||||||||
Debt instrument, interest rate | 12.00% | 12.00% | ||||||||||||||||||
SlainteVentures, LLC [Member] | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Debt instrument, interest rate | 12.00% | 12.00% | 12.00% | 18.00% | ||||||||||||||||
Number of trading days immediately preceding the applicable conversion | 10 days | |||||||||||||||||||
Components of convertible debt, net | ||||||||||||||||||||
Minimum default penalty amount, rate | 15.00% | |||||||||||||||||||
Accrued interest payable | $ 102,000 | |||||||||||||||||||
Proceeds from debt, net | $ 50,000 | $ 75,000 | $ 81,978 | |||||||||||||||||
Average closing price of common stock | $ / shares | $ 0.45 | $ 0.45 | $ 0.45 | |||||||||||||||||
Advances from officers and directors | $ 52,500 | |||||||||||||||||||
SlainteVentures, LLC [Member] | Vis Vires Group, Inc. [Member] | ||||||||||||||||||||
Components of convertible debt, net | ||||||||||||||||||||
Repayment of principal and accrued interest | $ 59,000 |
NOTES PAYABLE, RELATED PARTIES
NOTES PAYABLE, RELATED PARTIES (Details) | 1 Months Ended | 12 Months Ended | ||||
Sep. 30, 2013USD ($)Item$ / shares | Dec. 31, 2011 | Dec. 31, 2014 | Dec. 30, 2016 | Aug. 13, 2014$ / shares | Dec. 31, 2013USD ($) | |
Related Party Transaction [Line Items] | ||||||
Debt instrument, interest rate | 12.00% | |||||
Convertible note payable, related party | $ 50,000 | |||||
Former President [Member] | Notes Payable, Other Payables [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Debt instrument, maturity date | Dec. 31, 2013 | |||||
Convertible Note [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Debt instrument, face amount | $ 50,000 | |||||
Number of common stock shares debt instrument can be converted to | Item | 10,000,000 | |||||
Debt conversion, price per share | $ / shares | $ 0.005 | $ 3 | ||||
Debt instrument, conversion date | Feb. 24, 2014 |
STOCKHOLDERS' DEFICIT (Stock Op
STOCKHOLDERS' DEFICIT (Stock Option Activity) (Narrative) (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2016 | Dec. 31, 2015 | Jan. 12, 2016 | Jan. 12, 2015 | Jan. 09, 2015 | Dec. 31, 2014 | May 01, 2014 | |
Common stock, per share value | $ 0.001 | ||||||
2014 Stock Incentive Plan [Member] | |||||||
Awarded stock options | $ 200,000 | ||||||
Common stock, per share value | $ 0.70 | ||||||
2014 Stock Incentive Plan [Member] | Mr. Ruby [Member] | |||||||
Awarded stock options | $ 980,000 | ||||||
Common stock, per share value | $ 0.20 | ||||||
Stock Options [Member] | |||||||
Awarded stock options | $ 1,050,000 | ||||||
Stock options | 3,680,000 | 600,000 | 600,000 | ||||
Fair value of options | 417,664 | 612,512 | |||||
Weighted-average remaining contractual life for stock options outstanding and exercisable | 9 years 1 month 6 days | 9 years | |||||
Aggregate intrinsic value of options outstanding and exercisable | $ 0 |
STOCKHOLDERS' DEFICIT (Change o
STOCKHOLDERS' DEFICIT (Change of control, Stock split, Equity offering, and Change in Authorized Capital) (Details) - USD ($) | 1 Months Ended | |||||||
Aug. 28, 2014 | Mar. 31, 2014 | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | May 02, 2014 | May 01, 2014 | Dec. 31, 2013 | |
Stockholders' Equity Note [Abstract] | ||||||||
Common stock sold under stock purchase agreement, representing approximately 87% of the issued and outstanding shares of the Company | 40,000,000 | |||||||
Shares cancelled | 41,690,000 | |||||||
Shares issued to Messrs. Blackmon, Ruby and Verzura, representing approximately 89% of issued and outstanding shares | 38,690,000 | |||||||
Number of units sold through equity offering | 600,000 | |||||||
Proceeds from sale of units | $ 900,000 | |||||||
Per share price A Warrant holders can purchase each share of the Company's common stock during the two year period commencing April 1, 2014 | $ 7.50 | |||||||
Per share price B Warrant holders can purchase each share of the Company's common stock during the three year period commencing April 1, 2014 | $ 15 | |||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | 5,000,000 | 10,000,000 | ||
Preferred stock, par value per share | $ 0.001 | |||||||
Preferred stock, no par value | ||||||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | 100,000,000 | 50,000,000 | 100,000,000 | ||
Common stock, par value per share | $ 0.001 | |||||||
Common stock, no par value | $ 0 |
STOCKHOLDERS' DEFICIT (Schedule
STOCKHOLDERS' DEFICIT (Schedule of Assumptions on Date of Valuation Utilizing for Fair Value of Warrants) (Details) - $ / shares | Jan. 12, 2016 | Feb. 10, 2015 | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Warrants price (on dollars per shares) | $ 1.59 | ||||
Stock price (in dollars per share) | 1.59 | ||||
Exercise price (in dollars per share) | $ 3 | ||||
Risk free interest rate (as a percent) | 1.05% | ||||
Expected term (years) | 2 years 7 months 6 days | ||||
Expected volatility (as a percent) | 183.00% | ||||
Expected dividends (as a percent) | 0.00% | ||||
Warrant [Member] | |||||
Warrants price (on dollars per shares) | $ 0.70 | $ 0.70 | |||
Stock price (in dollars per share) | 1.03 | ||||
Exercise price (in dollars per share) | $ 3 | ||||
Risk free interest rate (as a percent) | 0.88% | ||||
Expected term (years) | 3 years 18 days | ||||
Expected volatility (as a percent) | 146.00% | ||||
Expected dividends (as a percent) | 0.00% | ||||
Stock Options [Member] | |||||
Warrants price (on dollars per shares) | $ 0.20 | $ 0.70 | $ 0.70 | ||
Stock price (in dollars per share) | 0.20 | 0.70 | 0.70 | ||
Exercise price (in dollars per share) | $ 0.20 | $ 0.70 | $ 0.70 | ||
Risk free interest rate (as a percent) | 1.98% | 1.98% | 1.98% | ||
Expected term (years) | 10 years | 10 years | 10 years | ||
Expected volatility (as a percent) | 173.00% | 173.00% | 173.00% | ||
Expected dividends (as a percent) | 0.00% | 0.00% | 0.00% |
STOCKHOLDERS' DEFICIT (Common S
STOCKHOLDERS' DEFICIT (Common Stock Issued For Services, Warrants and 2004 Equity Incentive Plan) (Details) - USD ($) | Oct. 19, 2015 | Aug. 24, 2015 | Aug. 17, 2015 | Apr. 23, 2015 | Mar. 02, 2015 | Feb. 10, 2015 | Dec. 30, 2014 | Dec. 29, 2014 | Dec. 01, 2014 | Oct. 24, 2014 | Oct. 17, 2014 | Sep. 17, 2014 | Aug. 25, 2014 | Aug. 15, 2014 | Aug. 14, 2014 | Aug. 13, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Nov. 20, 2014 | Jun. 09, 2014 | Dec. 31, 2013 |
Number of shares of common stock issued for services | 20,000 | 20,000 | 20,000 | 10,000 | |||||||||||||||||||||
Value of shares of common stock issued for services | $ 13,800 | $ 24,000 | $ 24,800 | $ 9,200 | $ 226,215 | $ 305,100 | |||||||||||||||||||
Number of shares of common stock committed to be issued for services | 40,000 | ||||||||||||||||||||||||
Value of shares of common stock committed to be issued for services | $ 88,000 | ||||||||||||||||||||||||
Equity method investments | $ 88,000 | $ 88,000 | 88,000 | 138,000 | |||||||||||||||||||||
Warrants issued with convertible debt | 694,525 | ||||||||||||||||||||||||
Purchase and cancellation of warrants | (576,152) | ||||||||||||||||||||||||
Loss on extinguishment of debt and repurchase of warrants | $ (768,602) | (768,602) | (33,635) | ||||||||||||||||||||||
Issuance of Stock and Warrants for Services or Claims | $ 118,160 | $ 47,880 | 47,880 | $ 83,600 | |||||||||||||||||||||
Independent Contractor [Member] | |||||||||||||||||||||||||
Number of shares of common stock issued for services | 11,000 | 30,000 | |||||||||||||||||||||||
Value of shares of common stock issued for services | $ 5,280 | $ 42,600 | |||||||||||||||||||||||
Issuance of Stock and Warrants for Services or Claims | $ 42,600 | ||||||||||||||||||||||||
Accounting Service Provider Two [Member] | |||||||||||||||||||||||||
Number of shares of common stock issued for services | 50,000 | ||||||||||||||||||||||||
Value of shares of common stock issued for services | $ 19,000 | ||||||||||||||||||||||||
Issuance of Stock and Warrants for Services or Claims | 19,000 | ||||||||||||||||||||||||
Accounting Service Provider [Member] | |||||||||||||||||||||||||
Number of shares of common stock issued for services | 30,000 | 60,000 | |||||||||||||||||||||||
Value of shares of common stock issued for services | $ 12,000 | $ 47,400 | |||||||||||||||||||||||
Issuance of Stock and Warrants for Services or Claims | $ 12,000 | 47,400 | |||||||||||||||||||||||
Investment Banking Service Provider [Member] | |||||||||||||||||||||||||
Number of shares of common stock issued for services | 126,500 | ||||||||||||||||||||||||
Value of shares of common stock issued for services | $ 99,935 | ||||||||||||||||||||||||
Issuance of Stock and Warrants for Services or Claims | 49,967 | ||||||||||||||||||||||||
Accounting Service Provider Three [Member] | |||||||||||||||||||||||||
Issuance of Stock and Warrants for Services or Claims | $ 375 | ||||||||||||||||||||||||
CRD [Member] | |||||||||||||||||||||||||
Equity Method Investments, Percentage | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% | ||||||||||||||||||||
Equity method investments | $ 88,000 | $ 88,000 | $ 88,000 | $ 88,000 | $ 88,000 | ||||||||||||||||||||
Lone Mountain [Member] | |||||||||||||||||||||||||
Equity Method Investments, Percentage | 25.00% | 25.00% | 25.00% | 25.00% | |||||||||||||||||||||
Equity method investments | $ 50,000 | $ 50,000 | $ 50,000 | ||||||||||||||||||||||
WeedMD RX Inc. (''WMD'') [Member] | |||||||||||||||||||||||||
Equity Method Investments, Percentage | 4.29% | ||||||||||||||||||||||||
Stock Incentive Plan2014 [Member] | |||||||||||||||||||||||||
Maximum number of shares to be issued | 4,000,000 | ||||||||||||||||||||||||
Number of shares available for issue | 4,000,000 | ||||||||||||||||||||||||
General and Administrative Expense [Member] | |||||||||||||||||||||||||
Value of shares of common stock issued for services | $ 13,800 | $ 24,000 | $ 24,800 | ||||||||||||||||||||||
Selling and Marketing Expense [Member] | |||||||||||||||||||||||||
Value of shares of common stock issued for services | $ 9,200 | ||||||||||||||||||||||||
Prepaid Expenses and Other Current Assets [Member] | |||||||||||||||||||||||||
Issuance of Stock and Warrants for Services or Claims | 11,625 | ||||||||||||||||||||||||
Shares issued on December 1, 2014 [Member] | |||||||||||||||||||||||||
Number of shares of common stock issued for services | 30,000 | ||||||||||||||||||||||||
Value of shares of common stock issued for services | $ 19,500 | $ 19,500 | |||||||||||||||||||||||
Shares issued on December 1, 2014 [Member] | General and Administrative Expense [Member] | |||||||||||||||||||||||||
Value of shares of common stock issued for services | 8,921 | ||||||||||||||||||||||||
Shares issued on December 1, 2014 [Member] | Prepaid Expenses and Other Current Assets [Member] | |||||||||||||||||||||||||
Value of shares of common stock issued for services | 10,579 | ||||||||||||||||||||||||
Shares issued on October 17, 2014 [Member] | |||||||||||||||||||||||||
Number of shares of common stock issued for services | 100,000 | ||||||||||||||||||||||||
Value of shares of common stock issued for services | $ 40,000 | $ 40,000 | |||||||||||||||||||||||
Amortization term | 10 years | ||||||||||||||||||||||||
Shares issued on October 17, 2014 [Member] | General and Administrative Expense [Member] | |||||||||||||||||||||||||
Value of shares of common stock issued for services | 4,000 | $ 1,000 | |||||||||||||||||||||||
Shares issued on October 17, 2014 [Member] | Prepaid Expenses and Other Current Assets [Member] | |||||||||||||||||||||||||
Value of shares of common stock issued for services | 35,000 | ||||||||||||||||||||||||
Shares issued on September 17, 2014 [Member] | |||||||||||||||||||||||||
Number of shares of common stock issued for services | 150,000 | ||||||||||||||||||||||||
Value of shares of common stock issued for services | $ 162,000 | $ 162,000 | |||||||||||||||||||||||
Amortization term | 12 months | ||||||||||||||||||||||||
Shares issued on September 17, 2014 [Member] | General and Administrative Expense [Member] | |||||||||||||||||||||||||
Value of shares of common stock issued for services | $ 121,500 | $ 40,500 | |||||||||||||||||||||||
Typenex Co Investment Llc [Member] | Warrant [Member] | |||||||||||||||||||||||||
Number of shares of common stock issued for services | 621,000 | ||||||||||||||||||||||||
Value of shares of common stock issued for services | $ 987,390 | ||||||||||||||||||||||||
Number of warrants issued to purchase shares of common stock | 170,044 | 997,692 | |||||||||||||||||||||||
Warrants issued with convertible debt | $ 694,525 | ||||||||||||||||||||||||
Purchase and cancellation of warrants | $ (576,152) | ||||||||||||||||||||||||
Fair value of Warrant | $ 218,788 | ||||||||||||||||||||||||
Loss on extinguishment of debt and repurchase of warrants | $ 768,602 |
STOCKHOLDERS' DEFICIT (Common75
STOCKHOLDERS' DEFICIT (Common Stock Issued For Services, Warrants) (Details) - $ / shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Number of Shares | |||
Warrants outstanding, beginning of period (in shares) | 3,000,000 | 3,170,044 | |
Issued (in shares) | 956,836 | 3,997,692 | |
Exercised (in shares) | |||
Repurchased and cancelled (shares) | (170,044) | (827,648) | |
Expired (in shares) | (3,000,000) | ||
Warrants outstanding, end of period (in shares) | 1,895,122 | 3,000,000 | 3,170,044 |
Warrants exercisable at the end of the period (in shares) | 1,895,122 | 3,000,000 | 3,170,044 |
Weighted Average Remaining Life (years) | |||
Warrants outstanding, beginning of period | 1 year | ||
Issued | 4 years 6 months 11 days | ||
Warrants exercisable at the end of the period | 4 years 6 months 11 days | ||
Warrants outstanding, end of period | 1 year | ||
Weighted Average Exercise Price | |||
Warrants outstanding, beginning of period (in dollars per share) | $ 12 | $ 11.52 | |
Issued (in dollars per share) | 0.18 | 9.75 | |
Exercised (in dollars per share) | |||
Repurchased and cancelled (in dollars per share) | |||
Expired (in dollars per share) | |||
Warrants outstanding, end of period (in dollars per share) | 0.18 | 12 | 11.52 |
Warrants exercisable at the end of the period (in dollars per share) | $ 0.18 | $ 11.52 |
STOCKHOLDERS' DEFICIT (Schedu76
STOCKHOLDERS' DEFICIT (Schedule of stock option activity) (Details) - Stock Options [Member] - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Number of Shares | ||
Stock options outstanding, beginning of period | 600,000 | |
Issued | 600,000 | |
Exercised | ||
Expired | ||
Stock options outstanding, end of period | 3,680,000 | 600,000 |
Stock options exercisable, end of period | 3,680,000 | 600,000 |
Weighted Average Remaining Life (years) | ||
Stock options outstanding, beginning of period | 9 years 1 month 6 days | |
Stock options outstanding, end of period | 9 years 1 month 6 days | |
Stock options exercisable, end of period | 9 years 1 month 6 days | 9 years |
Weighted Average Exercise Price | ||
Stock options outstanding, beginning of period | $ 0.70 | |
Issued | 0.70 | |
Exercised | 0.70 | |
Expired | ||
Stock options outstanding, end of period | 0.26 | 0.70 |
Stock options exercisable, end of period | $ 0.26 | $ 0.70 |
STOCKHOLDERS' DEFICIT (Schedu77
STOCKHOLDERS' DEFICIT (Schedule of Warrants activity) (Details) - $ / shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Number of Shares | |||
Warrants outstanding, beginning of period (in shares) | 3,000,000 | 3,170,044 | |
Issued (in shares) | 956,836 | 3,997,692 | |
Shares issuable at the election of the noteholder in lieu of the payment of interest under the terms of the amended Slainte note. | 938,287 | ||
Exercised (in shares) | |||
Repurchased and cancelled (shares) | (170,044) | (827,648) | |
Expired (in shares) | (3,000,000) | ||
Warrants outstanding, end of period (in shares) | 1,895,122 | 3,000,000 | 3,170,044 |
Warrants exercisable at the end of the period (in shares) | 1,895,122 | 3,000,000 | 3,170,044 |
Weighted Average Remaining Life (years) | |||
Warrants outstanding, beginning of period | 1 year | ||
Issued | 4 years 6 months 11 days | ||
Warrants outstanding, end of period | 4 years 6 months 11 days | ||
Warrants exercisable at the end of the period | 4 years 6 months 11 days | ||
Weighted Average Exercise Price | |||
Warrants outstanding, beginning of period (in dollars per share) | $ 12 | $ 11.52 | |
Issued (in dollars per share) | 0.18 | 9.75 | |
Exercised (in dollars per share) | |||
Repurchased and cancelled (in dollars per share) | |||
Expired (in dollars per share) | |||
Warrants outstanding, end of period (in dollars per share) | 0.18 | 12 | 11.52 |
Warrants exercisable at the end of the period (in dollars per share) | $ 0.18 | $ 11.52 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Share-based compensation expense - shares issued for services | $ 118,160 | $ 47,880 | $ 47,880 | $ 83,600 |
Share-based compensation expense - amortization of shares issued for prepaid services | 279,229 | 302,789 | 50,421 | |
Share-based compensation expense - accrual of shares to be issued for services | 67,500 | |||
Share-based compensation expense - accrual of estimated share-based awards | 315,000 | 612,512 | 417,664 | |
Share-based compensation | $ 118,160 | $ 642,109 | $ 1,030,681 | $ 551,685 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | May 06, 2014 | Feb. 20, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | May 01, 2014 |
Long-term Purchase Commitment [Line Items] | |||||||||
Common stock, price per share | $ 0.001 | ||||||||
Research and development | $ 329 | $ 182,606 | |||||||
Consultancy Agreement [Member] | |||||||||
Long-term Purchase Commitment [Line Items] | |||||||||
Agreement, term | 9 months | ||||||||
Total payments | $ 200,000 | ||||||||
Initial payment | 50,000 | ||||||||
Additional payment | $ 50,000 | ||||||||
Shares issued for agreement | 100,000 | 100,000 | 100,000 | ||||||
Research and development | $ 150,000 | ||||||||
Accrued expenses | $ 110,000 | $ 110,000 | $ 110,000 | $ 110,000 | |||||
Expenses recognized | $ 118,160 | ||||||||
Percentage of completion | 80.00% | 80.00% | 80.00% | 80.00% | |||||
Costs recognized | $ 0 | $ 160,000 | |||||||
Consulting Agreement [Member] | |||||||||
Long-term Purchase Commitment [Line Items] | |||||||||
Agreement, term | 12 months | ||||||||
Warrant term | 5 years | ||||||||
Initial payment | $ 7,500 | ||||||||
Shares issued for agreement | 250,000 | ||||||||
Common stock, price per share | $ 0.18 | ||||||||
Research and development |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Expiration term | 20 years |
INCOME TAXES (Schedule of Sourc
INCOME TAXES (Schedule of Sources and Tax Effects of Differences for Periods) (Details) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Sources and tax effects of the differences | ||
Statutory U.S. federal tax rate | 39.00% | 39.00% |
EEffect of increase in valuation allowance | (39.00%) | (39.00%) |
Effective income tax rate (as a percent) |
INCOME TAXES (Schedule of Chang
INCOME TAXES (Schedule of Changes in Cumulative Net Deferred Tax Assets) (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Net deferred tax assets | ||
Net loss carry forward | $ 1,124,511 | $ 962,662 |
Valuation allowance | (1,124,511) | (962,662) |
Net deferred tax assets |
INCOME TAXES (Schedule of Recon
INCOME TAXES (Schedule of Reconciliation of Income Taxes Computed at Statutory Rate) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of income taxes computed at statutory rate | ||||||
Tax benefit at statutory rate | $ 1,124,511 | $ 962,662 | ||||
Valuation allowance | (1,124,511) | (962,662) | ||||
Income tax expense (benefit) |
RELATED PARTY TRANSACTIONS (Sch
RELATED PARTY TRANSACTIONS (Schedule of Amounts Due from Related Parties) (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Related Party Transaction [Line Items] | |||
Total due from related parties | $ 8,284 | $ 8,284 | $ 44,012 |
Affiliated customer [Member] | |||
Related Party Transaction [Line Items] | |||
Total due from related parties | 3,112 | ||
Lone Mountain [Member] | |||
Related Party Transaction [Line Items] | |||
Total due from related parties | 40,900 | ||
Blue River [Member] | |||
Related Party Transaction [Line Items] | |||
Total due from related parties | 3,284 | ||
CRD [Member] | |||
Related Party Transaction [Line Items] | |||
Total due from related parties | $ 5,000 |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | |
Discontinued Operations and Disposal Groups [Abstract] | |||
Amount of payable owed to former officer and director, exchanged for assets sold | $ 1,500,000 | ||
Revenues | $ 20,684 | ||
Operating expenses: | |||
Selling, general and administrative | 63,872 | ||
Depreciation | |||
Loss on disposal of assets | 15,704 | ||
Total operating expenses | 79,576 | ||
Loss from discontinued operations, before income taxes | (58,892) | ||
Provision for income taxes | |||
Loss from discontinued operations, net of income taxes | $ (58,892) |
SUBSEQUENT EVENTS (Schedule of
SUBSEQUENT EVENTS (Schedule of Assumptions on Date of Valuation Utilizing Black Scholes Option Pricing Model for Fair Value of Each Stock Options) (Details) - $ / shares | Jan. 15, 2016 | Feb. 10, 2015 |
Subsequent Event [Line Items] | ||
Stock price (in dollars per share) | $ 1.59 | |
Exercise price (in dollars per share) | $ 3 | |
Risk free interest rate (as a percent) | 1.05% | |
Expected term (years) | 2 years 7 months 6 days | |
Expected volatility (as a percent) | 183.00% | |
Expected dividends (as a percent) | 0.00% | |
Stock Options [Member] | ||
Subsequent Event [Line Items] | ||
Stock price (in dollars per share) | $ 0.20 | |
Exercise price (in dollars per share) | $ 0.20 | |
Risk free interest rate (as a percent) | 2.03% | |
Expected term (years) | 10 years | |
Expected volatility (as a percent) | 173.00% | |
Expected dividends (as a percent) | 0.00% |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | Apr. 06, 2016 | Jan. 15, 2016 | Dec. 30, 2016 | Dec. 17, 2016 | Apr. 30, 2016 | Mar. 30, 2016 | Mar. 24, 2016 | Mar. 18, 2016 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 |
Subsequent Event [Line Items] | |||||||||||
Interest rate (as a percent) | 12.00% | ||||||||||
Number of trading days | 10 days | ||||||||||
Average closing price of common stock | $ 0.45 | ||||||||||
Proceeds from debt, net | $ 761,500 | ||||||||||
Number of shares of common stock issued | 38,690,000 | ||||||||||
JSJ Investments Inc. [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Repayment of principal and accrued interest | $ 102,000 | ||||||||||
Slainte [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Number of trading days | 30 days | ||||||||||
Proceeds from debt, net | $ 75,000 | $ 81,978 | |||||||||
Number of shares of common stock issued | 416,667 | ||||||||||
Warrant exercise price | $ 0.18 | ||||||||||
Value of shares of common stock issued | $ 100,000 | ||||||||||
Repayment of principal and accrued interest | $ 102,000 | $ 59,000 | |||||||||
Unrelated Third Party [Member] | WeedMD [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Debt covenant amount | $ 175,000 | ||||||||||
Number of shares of common stock issued | 1,100,000 | ||||||||||
Ernest Blackmon [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Proceeds from debt, net | 25,000 | ||||||||||
Tony Verzura [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Proceeds from debt, net | $ 25,000 | ||||||||||
2014 Stock Incentive Plan [Member] | Mr. Ruby [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Minimum term to be hold for conversion | 10 days | ||||||||||
Number of shares of common stock issued | 980,000 | ||||||||||
Warrant exercise price | $ 0.20 | ||||||||||
Fair value of option (in dollars per share) | $ 0.20 | ||||||||||
2014 Stock Incentive Plan [Member] | Blackmon and Verzura [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Minimum term to be hold for conversion | 10 days | ||||||||||
Number of shares of common stock issued | 1,050,000 | ||||||||||
Warrant exercise price | $ 0.20 | ||||||||||
Fair value of option (in dollars per share) | $ 0.20 |