Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 14, 2016 | |
Document and Entity Information: | ||
Entity Registrant Name | NORTHSIGHT CAPITAL, INC. | |
Entity Trading Symbol | ncap | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Entity Central Index Key | 1,439,397 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 112,761,581 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 |
BALANCE SHEETS (unaudited)
BALANCE SHEETS (unaudited) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Current Assets | ||
Cash | $ 1,407 | $ 22,951 |
Accounts receivable | 0 | 400 |
Advances - related party | 25,268 | 0 |
Advances to employees | 1,577 | 0 |
Available for sale securities | 104,084 | 0 |
Total Current Assets | 132,336 | 23,351 |
Deposits | 0 | 131,000 |
Property and equipment, net $8,726 and $5,616 depreciation | 3,711 | 6,821 |
Web Development Costs, net $128,107 and $73,833 amortization | 195,055 | 249,329 |
Investment in joint venture | 78,912 | 0 |
Total Assets | 410,014 | 410,501 |
Current Liabilities | ||
Accounts payable and accrued expenses | 719,355 | 384,631 |
Accounts payable and accrued expenses - related party | 583,781 | 173,942 |
Notes payable - related party | 1,357,707 | 949,307 |
Notes payable | 79,900 | 79,900 |
Convertible notes payable | 100,000 | 0 |
Total Current Liabilities | 2,840,743 | 1,587,780 |
Noncurrent Liabilities | ||
Notes payable - related party | 400,000 | 400,000 |
Total Liabilities | 3,240,743 | 1,987,780 |
Commitments and Contingencies | ||
Stockholders' Deficit | ||
Common stock - 200,000,000 shares authorized having a par value of $.001 per share; 112,761,581 shares issued and outstanding as of September 30, 2016 and December 31, 2015, respectively | 112,762 | 112,762 |
Subscription payable | 62,000 | 62,000 |
Additional paid-in capital | 17,544,633 | 16,966,288 |
Accumulated deficit | (20,479,164) | (18,718,329) |
Accumulated other comprehensive loss | (70,960) | 0 |
Total Stockholders' Deficit | (2,830,729) | (1,577,279) |
Total Liabilities and Stockholders' Deficit | $ 410,014 | $ 410,501 |
BALANCE SHEETS PARENTHETICALS
BALANCE SHEETS PARENTHETICALS - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Parentheticals | ||
Net Depreciation of property and equipment | $ 8,726 | $ 5,616 |
Net amortization of web development cost | $ 128,107 | $ 73,833 |
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 200,000,000 | 200,000,000 |
Common Stock, shares issued | 112,761,581 | 112,761,581 |
Common Stock, shares outstanding | 112,761,581 | 112,761,581 |
STATEMENTS OF OPERATIONS (unaud
STATEMENTS OF OPERATIONS (unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenue: | ||||
Revenues | $ 3,238 | $ 3,816 | $ 12,117 | $ 8,229 |
Operating Expenses: | ||||
General administrative | 99,838 | 566,682 | 355,188 | 1,085,842 |
Settlement expense | 0 | 62,000 | 0 | 62,000 |
Consulting expense - related party | 45,000 | 73,500 | 135,000 | 249,000 |
Executive compensation | 184,638 | 932,000 | 537,594 | 1,723,500 |
Professional fees | 36,857 | 100,759 | 150,581 | 265,660 |
Rent - related party | 30,900 | 13,500 | 99,900 | 40,500 |
Travel | 0 | 6,395 | 2,327 | 14,997 |
Total operating (income) expenses | 397,233 | 1,754,836 | 1,280,590 | 3,441,499 |
Loss From Operations | (393,995) | (1,751,020) | (1,268,473) | (3,433,270) |
Other Income (Expense) | ||||
Loss on investments | (13,141) | 0 | 313,848 | 0 |
Interest expense | (15,410) | (1,831,701) | (47,514) | (3,310,278) |
Loss on deposit | 0 | 0 | (131,000) | 0 |
Total other income (expense) | (28,551) | (1,831,701) | (492,362) | (3,310,278) |
Net Loss | (422,546) | (3,582,721) | (1,760,835) | (6,743,548) |
Other Comprehensive Loss | ||||
Unrealized loss on marketable securities | (182,817) | 0 | (70,960) | 0 |
Total Comprehensive Loss | $ (605,363) | $ (3,582,721) | $ (1,831,795) | $ (6,743,548) |
Weighted Average Number of Common Shares Outstanding - Basic and Diluted | 112,761,581 | 108,569,253 | 112,761,581 | 106,412,405 |
Loss per Common Share - Basic and Diluted | $ 0 | $ (0.03) | $ (0.02) | $ (0.06) |
STATEMENTS OF CASH FLOWS (Unaud
STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash Flows From Operating Activities | ||
Net loss | $ (1,760,835) | $ (6,743,548) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation of property and equipment | 3,110 | 3,109 |
Amortization of web development costs | 54,273 | 44,492 |
Amortization of debt discount | 0 | 49,778 |
Stock issued for debt issue costs | 0 | 3,259,504 |
Stock issued for executive compensation | 0 | 1,282,500 |
Stock issued for release | 0 | 62,000 |
Stock issued pursuant to contracts | 0 | 380,950 |
Stock issued for advertising incentive | 0 | 750 |
Loss on deposit | 131,000 | 0 |
Warrants issued for executive compensation | 102,594 | 0 |
Loss on investments | 313,848 | 0 |
Changes in operating assets and liabilities: | ||
Prepaid expenses | 0 | 31,500 |
Accounts receivable | 400 | 0 |
Advances - related party | (25,268) | 0 |
Advances to employees | (1,577) | 0 |
Accounts payable and accrued expenses | 334,725 | 393,716 |
Accounts payable - related party | 409,839 | 159,800 |
Net Cash Used In Operating Activities | (437,891) | (1,075,449) |
Cash Flows From by Investing Activities | ||
Investment in joint venture | (92,053) | 0 |
Net Cash Used In Investing Activities | (92,053) | 0 |
Cash Flows From Financing Activities | ||
Proceeds from sale of common stock, net of offering costs | 0 | 415,500 |
Proceeds from notes payable | 0 | 79,900 |
Proceeds from convertible notes payable | 100,000 | 0 |
Proceeds from notes payable - related party | 471,400 | 761,407 |
Payments on notes payable - related party | (63,000) | (157,000) |
Net Cash Provided by Financing Activities | 508,400 | 1,099,807 |
Net Change In Cash | (21,544) | 24,358 |
Cash, Beginning of Period | 22,951 | 20,690 |
Cash, End of Period | 1,407 | 45,048 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid for interest | 158 | 0 |
Cash paid for income taxes | 0 | 0 |
Non-Cash Activities | ||
Issuance of common stock as settlement of obligations | 0 | 208,000 |
Issuance of common stock for contracts | 0 | 131,000 |
Issuance of common stock in conjunction with debt agreements | 0 | 64,934 |
Finders fees settled with stock | 0 | 16,449 |
Warrants issued in conjunction with debt agreements | 0 | 3,435,460 |
Warrants issued in conjunction with joint venture | 475,751 | 0 |
Warrants received in conjunction with joint venture | $ 175,044 | $ 0 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2016 | |
ORGANIZATION AND BASIS OF PRESENTATION | |
ORGANIZATION AND BASIS OF PRESENTATION | NOTE 1 ORGANIZATION AND BASIS OF PRESENTATION Northsight Capital Inc. (Northsight or the Company) is an early stage company incorporated in the State of Nevada on May 21, 2008. In May, 2011, Safe Communications, Inc. (n/k/a Kuboo, Inc.) acquired 80% of the Companys issued and outstanding common stock, and, as a result, became its parent company. On June 25, 2014, the Company completed the acquisition of approximately 7,500 cannabis related Internet domain names, in exchange for which the Company issued 78.5 million shares of its common stock and a promissory note in the principal amount of $500,000. As a result of this transaction, the seller of the domain names became an 81% stockholder of the Company. Kuboo, Inc. continues to be a significant stockholder of the Company. John Venners, a director of Kuboo, Inc., is our EVP, Operations and also sits on our board of directors. See Note 14 - Related Party Transactions. The Companys principal business is to provide a wide variety of online directories for a broad range of businesses engaged in the lawful sale and distribution of cannabis and hemp related products. The following constitute the Companys major product categories: a monthly listing in one or more of the Companys online directories, paid advertising in one or more of the Companys online directories and leasing to customers one or more Internet domain names for the customers exclusive use. At this juncture, the Company has not been able to generate any meaningful revenue. On February 29, 2016, the Company entered into a joint venture agreement with Tumbleweed Holdings, Inc. (TW), pursuant to which a newly formed joint venture company is developing an online dating service around the URL, www.jointlovers.com. Under the Joint Venture Agreement, the Company and TW own 60% and 40%, respectively, of equity and future earnings of the joint venture company with both partys consent being required on all major changes and decisions. The Company is currently in litigation with TW because TW has not complied with its funding obligations under the Joint Venture Agreement. See Note 4 - Investment in Joint Venture. We have analyzed our investment in this joint venture and have concluded that our interest gives us joint influence over business actions, board of directors, and its management, and have therefore accounted for our investment using the equity method in accordance with ASC 323. The accompanying financial statements have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the SEC). The interim financial statements reflect all adjustments, consisting of normal recurring adjustments which, in the opinion of management, are necessary to present a fair statement of the results for the period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Companys Annual Report on Form 10-K for the year ended December 31, 2015. The results of operations for the three and nine month periods ended September 30, 2016, are not necessarily indicative of the operating results for the full year. |
LIQUIDITY_GOING CONCERN
LIQUIDITY/GOING CONCERN | 9 Months Ended |
Sep. 30, 2016 | |
LIQUIDITY/GOING CONCERN | |
LIQUIDITY/GOING CONCERN | NOTE 2 LIQUIDITY/GOING CONCERN The Company is an early stage enterprise, has accumulated losses of $20,479,164, has had consistent negative cash flows from operating activities since inception (May 2008), and has limited cash on hand. These factors raise substantial doubt about the Companys ability to continue as a going concern. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. During the nine months ended September 30, 2016 the Company (i) raised $100,000 in capital through the sale of convertible notes and (ii) received a net $408,400 in loans from its significant shareholder and her spouse. The significant shareholder and her spouse are no longer able to provide funding to the Company. The Company does not currently have sufficient cash to fund operating expenses. Management plans to (i) raise additional capital as soon as possible, to fund continued operations of the Company and (ii) continue its efforts to generate revenues and income from operations. The Company has experienced great difficulty in raising capital from third parties. In the event the Company does not generate sufficient funds from revenues or financing through the issuance of its common stock or from debt financing, the Company will be unable to fully implement its business plan and pay its obligations as they become due, any of which circumstances would have a material adverse effect on its business prospects, financial condition, and results of operations. The accompanying financial statements do not include any adjustments that might be required should the Company be unable to recover the value of its assets or satisfy its liabilities. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2016 | |
RECENT ACCOUNTING PRONOUNCEMENTS | |
RECENT ACCOUNTING PRONOUNCEMENTS | NOTE 3 RECENT ACCOUNTING PRONOUNCEMENTS Management believes the impact of recently issued standards and updates, which are not yet effective, will not have a material impact on the Companys financial position, results of operations or cash flows upon adoption. |
INVESTMENT IN JOINT VENTURE
INVESTMENT IN JOINT VENTURE | 9 Months Ended |
Sep. 30, 2016 | |
INVESTMENT IN JOINT VENTURE: | |
INVESTMENT IN JOINT VENTURE | NOTE 4 INVESTMENT IN JOINT VENTURE On February 29, 2016, the Company entered into a joint venture agreement with Tumbleweed Holdings, Inc. (TW), pursuant to which a newly formed joint venture company is developing an online dating service around the URL, www.jointlovers.com. Per the Joint Venture Agreement, the Company and TW own 60% and 40% respectively of equity of the joint venture company. Under the joint venture agreement, the Company and TW agreed as follows: · The Company contributed the URL www.jointlovers.com to the joint venture entity, in exchange for 60% of the joint venture company. · TW contributed $30,000 and agreed to contribute an additional $70,000 towards the development of the online web portal, in exchange for 40% of the joint venture company. With any additional funds required for development to be contributed 60% by the Company and 40% by TW. · Revenue from the joint venture company will be shared proportionally with a portion of operating income to be used to repay principal and income due under the convertible notes referenced below (up to $500,000 in principal amount of notes). · TW agreed to purchase an aggregate of $150,000 in principal amount of convertible notes, convertible into shares of the Companys common stock at a conversion price of $.20 per share. In addition to repayment of principal, if the joint venture company has revenues, the notes are entitled to receive a portion of the joint venture companys operating income until they have received an amount equal to 50% of the face value of the notes. During the nine months ended September 30, 2016, Tumbleweed contributed a total of $85,000 to the joint venture company. Additionally, both parties agreed to issue the other a warrant to purchase 4.9% of their outstanding common stock. Pursuant to this agreement, TW agreed to issue a warrant to the Company to purchase 9,770,878 shares of its common stock at an exercise price of $0.02 per share, valued at $175,044 and the Company agreed to issue a warrant to TW to purchase 5,525,318 shares of the Companys common stock at an exercise price of $0.08 per share, valued at $475,751. The warrants have a three-year term and a cashless exercise right (see Note 6 Securities and Note 12 Stock Warrants for details). The Companys ownership of the joint venture company is accounted for under the equity method of accounting, in accordance with ASC 323. Under the equity method of accounting, an Investee Companys accounts are not reflected within the Companys Balance Sheets and Statements of Operations; however, the Companys share of the earnings or losses of the Investee Company is reflected as a gain or loss on the Companys investment. Additionally, under the equity method of accounting, the Companys initial investment in the joint venture company was recorded at the historic cost basis of the contributed domain of $0. Accordingly, the Company expensed $300,707 related to the excess value of warrants the Company issued as compared to those received from TW and is included as a component of loss on investments in the Companys Statements of Operations. When the Companys carrying value in an equity method investee company is reduced to zero, no further losses are recorded in the Companys financial statements unless the Company guaranteed obligations of the Investee Company or has committed additional funding. When the investee company subsequently reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously recognized. During the three and nine months ended September 30, 2016, the joint venture company experienced a net loss attributable to the Companys 60% ownership of $10,200 and $13,141, respectively. Because the Companys investment in the joint venture was zero until the third quarter, all net losses have been recognized in the current quarter. As of September 30, 2016, Tumbleweed was in default under the terms of the joint venture agreement and owed the joint venture company the remaining $15,000 in development funding and the Company $50,000 for the final note purchase, both of which were due by April 29, 2016. Additionally, Tumbleweed owes the joint venture company $61,369, representing its 40% share of costs in excess of the first $100,000. The Company is currently in litigation with TW, seeking to compel TW to comply with its funding obligations under the Joint Venture Agreement. Summary revenue information on the joint venture for the nine months ended September 30, 2016 and 2015 is as follows: For the Nine Months Ended September 30, 2016 September, 2015 (Unaudited) (Unaudited) Revenues $ - $ - Operating Expenses: General administrative 14,025 - Rent - related party 3,600 - Total operating expenses 17,625 - Loss from operations (17,625) - Net Loss $ (17,625) $ - Company Share of Net Loss $ (13,141) $ - |
ADVANCES - RELATED PARTY
ADVANCES - RELATED PARTY | 9 Months Ended |
Sep. 30, 2016 | |
ADVANCES - RELATED PARTY | |
ADVANCES - RELATED PARTY | NOTE 5 ADVANCES RELATED PARTY With the formation of the Companys joint venture (see Note 4 Investment in Joint Venture), Tumbleweed Holdings agreed to fund one hundred percent of the first $100,000 of web development costs related to the web site www.jointlovers.com. During the nine months ended September 30, 2016, the Joint Venture Company incurred costs totaling $235,796 related to the development of jointlovers.com as well as $17,625 general and administrative costs. Per the Joint Venture Agreement, the Company is responsible for 60% of all costs after the initial $100,000, representing a total share of $92,053 in the joint ventures costs. During this same period, the company paid costs totaling $117,321 on behalf of the Joint Venture Company satisfying the Companys share of $92,053 while the excess $25,268 is due from Tumbleweed Holdings, and is included in advances related party. |
SECURITIES
SECURITIES | 9 Months Ended |
Sep. 30, 2016 | |
SECURITIES | |
SECURITIES | NOTE 6 SECURITIES In conjunction with the formation of the joint venture discussed in Note 4, Tumbleweed Holdings agreed to issue the Company a warrant to purchase up to 9,770,878 shares of Tumbleweed Holdings, Inc. at an exercise price of $0.02 with an expiration date three years from the date of issuance. The initial value of the warrant was $175,044 and was recorded as available for sale securities. The Company has classified the warrant as having Level 2 inputs, and has used the Black-Scholes option-pricing model to value the warrant. The fair value at the commitment and re-measurement dates for the above warrant was based upon the following management assumptions: Commitment Date Re-measurement Dates Expected dividends 0% 0% Expected volatility 328% 289 - 291% Expected term: 3 years 2.41 - 2.67 years Risk free interest rate 0.91% 0.71 - 0.88% The following table summarizes the securities activity for the nine months ended September 30, 2016: Balance December 31, 2015 $ - Warrants received 175,0744 Exercised - Realized gain (loss) - Unrealized gain (loss) (70,960) Balance September 30, 2016 $ 104,084 |
WEB DEVELOPMENT COSTS AND DOMAI
WEB DEVELOPMENT COSTS AND DOMAIN NAMES ASSETS | 9 Months Ended |
Sep. 30, 2016 | |
WEB DEVELOPMENT COSTS AND DOMAIN NAMES ASSETS | |
WEB DEVELOPMENT COSTS AND DOMAIN NAMES ASSETS | NOTE 7 WEB DEVELOPMENT COSTS AND DOMAIN NAMES ASSETS In accordance with ASC 350.50, during the three and nine months ended September 30, 2016 and the year ended December 31, 2015, the Company did not capitalize any expenses towards the development of multiple websites on which third parties can advertise the sale and distribution of cannabis related products and services: an online yellow pages. The Company does not intend to engage in the sale or distribution of marijuana or related products. During the nine months ended September 30, 2016 and 2015 the Company recorded website development expenses of $10,470 and $40,232, respectively, which is included in general and administrative expenses on the Companys consolidated statements of operations. The Company amortizes these assets over their related useful lives (approximately 1 to 5 years), using a straight-line basis. Assets are reviewed for impairment whenever events or changes in circumstances exist that indicate the carrying amount of an asset may not be recoverable, or at least annually. Measurement of the amount of impairment, if any, is based upon the difference between the asset's carrying value and estimated fair value. Fair value is determined through various valuation techniques, including market and income approaches as considered necessary. During the nine months ended September 30, 2016 and 2015 the Company recorded amortization expense of $54,273 and $44,492, respectively, related to websites previously launched. As of September 30, 2016 As of December 31, 2015 Amortization Period Web development costs $ 323,162 $ 339,162 5 years Capitalized costs - - Less: reallocation of cost to invoices - (16,000) Less: accumulated depreciation (128,107) (73,833) $ 195,055 $ 249,329 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2016 | |
PROPERTY AND EQUIPMENT: | |
PROPERTY AND EQUIPMENT | NOTE 8 PROPERTY AND EQUIPMENT Property and equipment consisted of the following at September 30, 2016 and December 31, 2015: As of September 30, 2016 As of December 31, 2015 Estimated Useful Life Furniture and equipment $ 12,437 $ 12,437 3 years Total 12,437 12,437 Less: Accumulated depreciation (8,726) (5,616) $ 3,711 $ 6,821 The Company records depreciation expense on a straight-line basis over the estimated life of the related asset (approximately 3 years). The Company recorded depreciation expense of $3,110 and $3,109 during the nine months ended September 30, 2016 and 2015, respectively. |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES RELATED PARTY | 9 Months Ended |
Sep. 30, 2016 | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES RELATED PARTY | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES RELATED PARTY | NOTE 9 ACCOUNTS PAYABLE AND ACCRUED EXPENSES RELATED PARTY At September 30, 2016, the Company had a balance in related party accounts payable and accrued expenses of $583,781 which consisted of the following: Party Name: Relationship: Amount Howard Baer Spouse of majority shareholder Consulting fees 225,500 Howard Baer Spouse of majority shareholder Accrued interest 42,339 John Venners Director/EVP, President and CEO of Kuboo, Inc. Consulting fees/salaries 188,466 John Venners Director/EVP, President and CEO of Kuboo, Inc. Advances 3,000 Kuboo, Inc. Former parent company, significant shareholder Rent 124,476 $ 583,781 |
NOTES PAYABLE RELATED PARTY
NOTES PAYABLE RELATED PARTY | 9 Months Ended |
Sep. 30, 2016 | |
NOTES PAYABLE RELATED PARTY: | |
NOTES PAYABLE RELATED PARTY | NOTE 10 NOTES PAYABLE RELATED PARTY On May 19, 2015, the Company issued Kae Yong Park and her spouse Howard Baer (together, Park) a non-interest bearing, unsecured demand promissory note to evidence all unpaid advances received by the Company to that point and to cover all additional advances received afterward. Unpaid principal under the note is due and payable upon the earlier of (i) an event of default (as defined), (ii) written demand and (iii) the Companys receipt of capital (to the extent of net proceeds received) from any capital raising transaction after May 15, 2015, whether in the form of debt, equity or otherwise. On September 30, 2015, the Company amended and restated its promissory note to Park to include all advances to date and provide certain assets, including all internet domain names, websites and related assets as collateral. Repayment terms remain the same, and Park has to date not enforced the provision requiring repayment upon receipt of net proceeds from capital raising transactions. During the nine months ended September 30, 2016, Park advanced an aggregate of $471,400 to the Company for short-term capital needs. During this period the Company repaid $63,000 of its secured debt to Park. Additionally, Park assigned $65,000 of debt owed to her by the Company to another investor who received a note from the Company to evidence the debt. At September 30, 2016, the Company had a note payable to Park for these advances of $1,292,707 which is secured by the assets of the Company. Because this debt is payable on demand,, the company has classified it as a current liability. On May 11, 2016, Kae Park, a significant shareholder, assigned $65,000 of debt owed to her by the Company to an investor for which the Company agreed to issue a one-year note. Interest on the note is payable quarterly in an amount equal to fifty percent of the original face value, based on a percentage of the joint venture companys net revenues. This interest will be payable only in the event that the joint venture company generates net revenues. The following table summarizes the Companys balance for these advances for the nine months ended September 30, 2016: Amount due - December 31, 2015 $ 949,307 Advances received from Park 471,400 Debt assigned to investor (65,000) Repayments made to Park (63,000) Balance dueSeptember 30, 2016 $ 1,292,707 On June 23, 2014, the Company issued a $500,000 promissory note in conjunction with the purchase of approximately 7,500 cannabis-related internet domain names. The note originally bore interest at the rate of 3.25% per annum and the first $100,000 of which was payable upon the Companys receipt of an aggregate of $1,000,000 in funding (whether debt or equity). The remaining $400,000 is payable in thirty-six equal monthly installments, commencing on the fifteenth day following the first month the Company realizes at least $150,000 in gross revenue (see Note 12 - Commitments and Contingencies). On July 25, 2014, the Company amended and restated its promissory note in the principal amount of $500,000 owing to Kae Yong Park (the Companys then majority shareholder) to provide that it would make the first $100,000 installment payment due under the Note on July 25, 2014 (earlier than required), in exchange for which Kae Yong Park agreed to waive all interest due over the term of the note. Thereafter, Kae Yong Park waived the requirement that the Company pay the $100,000 due under the Amended and Restated Note until August 25, 2014, at which time it was paid. The Company subsequently recaptured all previously recorded interest expense related to the note. |
NOTES PAYABLE
NOTES PAYABLE | 9 Months Ended |
Sep. 30, 2016 | |
NOTES PAYABLE | |
NOTES PAYABLE | NOTE 11 NOTES PAYABLE Notes On July 1, 2015, the Company entered into a seven (7) day loan agreement with two parties for aggregate proceeds of $34,900. The note bears interest at the rate of six percent (6%) annually. In addition to the loans, the Company issued an aggregate 349,000 shares of common stock valued at $26,016 and warrants to purchase an aggregate 100,000 shares of the Companys common stock at an exercise price of $0.25 per share valued at $6,898. The relative fair value of the shares and warrants associated with these notes have been recorded as debt discount to be amortized over the life of the loans. As of September 30, 2016, these notes have not yet been repaid and principal and interest totaling $37,505 is in default. On August 10, 2015, the Company entered into a one hundred twenty (120) day loan agreement with an existing investor for aggregate proceeds of $45,000 (two installments of $22,500 each). The note bears interest at the rate of six percent (6%) annually. As additional consideration for these loans, the Company issued an aggregate 1,200,000 shares of common stock valued at $38,918. The relative fair value of the shares associated with these notes have been recorded as debt discount to be amortized over the life of the loans). As of September 30, 2016, these notes have not yet been repaid and principal and interest totaling $47,645 is in default. Convertible Notes On February 29, 2016, in conjunction with its joint venture agreement (see Note 4 Investment in Joint Venture), the Company entered an agreement to issue three $50,000, one year convertible notes. These notes are convertible into shares of the Companys stock at a price of $0.20 per share or a total of 250,000 shares each. Interest on these notes is payable quarterly in an amount equal to fifty percent of the original face value, based on a percentage of the joint venture companys net revenues. This interest will be payable only in the event that the joint venture company generates net revenues. Concurrent with this agreement, the Company issued the first of these convertible notes. On April 8, 2016, the Company issued the second of these convertible notes. As of September 30, 2016, the proceeds from the third note investment of $50,000 had not been received. Dilutive shares associated with convertible notes outstanding at September 30, 2016 is as follows: Principal Shares Note dated February 29, 2016, convertible at $0.20 per share $ 50,000 250,000 Note dated April 8, 2016, convertible at $0.20 per share 50,000 250,000 Total Dilutive shares September 30, 2016 $ 100,000 500,000 The following table summarizes the Companys notes and convertible notes payable for the nine months ended September 30, 2016: Notes Convertible Notes Balance December 31, 2015 $ 79,900 $ - Note proceeds received - 100,000 Repayments on notes - - Balance September 30, 2016 $ 79,900 $ 100,000 |
STOCK WARRANTS
STOCK WARRANTS | 9 Months Ended |
Sep. 30, 2016 | |
STOCK WARRANTS: | |
STOCK WARRANTS | NOTE 12 STOCK WARRANTS On February 29, 2016, in conjunction with the Companys joint venture agreement (see Note 4 Investment in Joint Venture), the company agreed to issue a warrant to purchase 5,525,318 shares of the Companys common stock at an exercise price of $0.08 per share. These warrants were valued at $475,751 using the Black-Scholes pricing model, were fully vested upon issuance and have a cashless exercise provision. On March 31, 2016, the Company issued two year warrants to John Hollister, Interim CEO, to purchase 375,000 shares of the Companys common stock at an exercise price of $0.09 per share in conjunction with his employment contract. These warrants were valued at $33,236 using the Black-Scholes pricing model and were fully vested upon issuance. On June 30, 2016, the Company issued two year warrants to John Hollister, Interim CEO, to purchase 375,000 shares of the Companys common stock at an exercise price of $0.09 per share in conjunction with his employment contract. These warrants were valued at $29,720 using the Black-Scholes pricing model and were fully vested upon issuance. On September 30, 2016, the Company issued two year warrants to John Hollister, Interim CEO, to purchase 375,000 shares of the Companys common stock at an exercise price of $0.09 per share in conjunction with his employment contract. These warrants were valued at $39,638 using the Black-Scholes pricing model and were fully vested upon issuance. The Company has applied fair value accounting for all warrants issued. The fair value of each warrant granted is estimated on the date of grant using the Black-Scholes option-pricing model. The fair value at the commitment date for the above warrants were based upon the following management assumptions: Commitment Date Expected dividends 0% Expected volatility 163% - 177% Expected term: 2 - 3 years Risk free interest rate 0.58% 0.91% A summary of the Companys warrant activity for the nine months ended September 30, 2016 is as follows: Number of Warrants Weighted Average Exercise Price Outstanding December 31, 2015 11,105,285 $ 0.08 Granted 6,650,318 0.08 Exercised/settled - - Balance as September 30, 2016 17,755,603 $ 0.08 The Companys outstanding warrants at September 30, 2016 are as follows: Warrants Outstanding Warrants Exercisable Exercise Price Range NumberOutstanding Weighted AverageRemainingContractual Life (inyears) Weighted AverageExercise Price NumberExercisable WeightedAverageExercise Price Intrinsic Value $0.05 - $0.25 17,755,603 1.45 $ 0.08 17,755,603 $ 0.08 1,043,215 The weighted average fair value per warrant issued during the nine months ended September 30, 2016 was $0.09. |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 9 Months Ended |
Sep. 30, 2016 | |
EARNINGS (LOSS) PER SHARE | |
EARNINGS (LOSS) PER SHARE | NOTE 13 EARNINGS (LOSS) PER SHARE Net earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. Since the Company reflected a net loss for the three and nine months September 30, 2016 and 2015, respectively, the effect of considering any common stock equivalents, if exercisable, would have been anti-dilutive. Therefore, a separate computation of diluted earnings (loss) per share is not presented. The Company has the following common stock equivalents at September 30, 2016 and 2015, respectively: As of September 30, 2016 As of September 30, 2015 Warrants (exercise price $0.05 - $0.25/share) 17,755,603 5,516,000 Convertible debt (exercise price $0.20/share) 500,000 - 18,255,603 5,516,000 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2016 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 14 RELATED PARTY TRANSACTIONS Effective May 2, 2014, the Company entered into an asset purchase agreement with Kae Park (the Seller), who became a related party upon the closing of the acquisition, which occurred on June 23, 2014. Under this agreement, the Company agreed to acquire approximately 7,500 cannabis related Internet domain names, in exchange for which, the Company: (a) Issued to the Seller on the closing date 78.5 million shares of the Companys restricted common stock which represented approximately 81% of the Companys issued and outstanding common stock upon the closing; (b) Issued to the Seller a promissory note in the principal amount of $500,000. The note originally bore interest at the rate of 3.25% per annum and was payable as follows: upon the Companys receipt of an aggregate of $1,000,000 in funding (whether debt or equity), $100,000 was to be paid, and the Company was required to pay the remaining balance of $400,000 in thirty-six equal monthly installments, commencing on the fifteenth day following the first month the Company realizes at least $150,000 in gross revenue; and (c) Is obligated to pay a monthly royalty to the Seller equal to the product of (i) six percent (6%) and (ii) the excess of the Companys gross monthly revenue over $150,000 (Royalty Payment). The Royalty Payment is payable for a period of thirty-six months from and after the first month in which the Company has gross revenues in excess of $150,000. On July 25, 2014, the Company amended and restated the promissory note to provide that it would make the first $100,000 installment payment due under the Note on July 25, 2014 (earlier than required), in exchange for which Kae Yong Park agreed to waive all interest due over the term of the note. Thereafter, Kae Yong Park waived the requirement that the Company pay the $100,000 due under the Amended and Restated Note, until August 25, 2014, at which point such $100,000 was paid. In addition, the Seller was required to provide such consulting services as the Company may require during the twelve-month period following the closing of the acquisition. In consideration for these services, the Company was required to pay the Seller $9,500 per month, for a period of twelve months, commencing on the closing date and, on the first of each month thereafter. We are headquartered in Scottsdale, Arizona where we rent space from Kuboo Inc. our former parent company and a significant shareholder. Currently, the Company is renting approximately 6,100 square feet of space on a month-to-month basis. The monthly rent for this facility is $11,500. During the nine months ended September 30, 2016 the company incurred expenses payable to Kuboo, Inc. of $99,900 for rent and allocated rent expenses of $3,600 to the Joint Venture Company. During the nine months ended September 30, 2016, Kae Yong Park, a significant shareholder, and her spouse, Howard Baer, advanced an aggregate of $471,400 to the Company for short-term capital needs. During this period the Company also repaid $63,000 of its secured debt to Park. Additionally, on May 11, 2016, Park assigned $65,000 of debt owed to her by the Company to another investor for which the Company issued the investor a one year note for $65,000. At September 30, 2016, the Company had a note payable to Park for these advances of $1,292,707 which is secured by the assets of the Company. During the nine months ended September 30, 2016, the Company incurred expenses of $135,000 related to its consulting contract with Howard Baer, the spouse of Kae Yong Park, a significant shareholder. During the nine months ended September 30, 2016, the Company received funds related to its joint venture of $85,000 and spent cash on behalf of its joint venture totaling $202,321. During this period, the Companys 60% share of the joint ventures expenses were $92,053. The remaining $25,268 is due from the Joint Venture Company, and is included in advances related party. On April 13, 2016, the Company agreed to amend the promissory note with Kae Yong Park and Howard R. Baer so as to make $564,000 in principal amount due under said Note interest bearing at the rate of 10% per annum, effective January 1, 2016. The remaining principal is non-interest bearing. At September 30, 2016, the Company has accrued interest owed under this agreement of $42,339. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2016 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 15 COMMITMENTS AND CONTINGENCIES In May 2014, The Company entered into an asset purchase agreement that requires the Company to pay a monthly royalty equal to six percent of gross monthly revenues over $150,000. The royalty payment is payable for a period of thirty-six months from and after the first month in which the Companys gross revenues are in excess of $150,000 (see Note 16 - Related Party Transactions). On June 23, 2014, the Company issued a $500,000 promissory note in conjunction with the purchase of approximately 7,500 cannabis-related internet domain names. The original note bore interest at the rate of 3.25% per annum and was payable as follows: upon the Companys receipt of an aggregate of $1,000,000 in funding (whether debt or equity), $100,000 was required to be paid. The remaining $400,000 is payable in thirty-six equal monthly installments, commencing on the fifteenth day following the first month the Company realizes at least $150,000 in gross revenue. On July 25, 2014, the Company amended and restated its promissory note in the principal amount of $500,000 owing to Kae Yong Park (the Companys then majority shareholder) to provide that it would make the first $100,000 installment payment due under the Note on July 25, 2014 (earlier than required), in exchange for which Kae Yong Park agreed to waive all interest due over the term of the note. Thereafter, Kae Yong Park waived the requirement that the Company pay the $100,000 due under the Amended and Restated Note until August 25, 2014, at which time it was paid. On August 7, 2015, Lee Ori ("Plaintiff") instituted a legal action in Missouri against us, Wealthcorp, LLC, Winterwalk Capital, LLC, Christopher S. Walkup ("Walkup"), Marshall P. Winters and Paradigm Healthcare Solutions, LLC. The complaint alleged that (i) Walkup represented to the Plaintiff that he had the right to subscribe to shares of our common stock at a per share price of $.25 and (ii) that Walkup was the Companys agent and individually and in such alleged agency capacity offered to sell Plaintiff an aggregate of 1,075,000 shares of company common stock for a total purchase price of $425,000. The Complaint alleges that we are liable to the Plaintiff for the acts and omissions of Walkup, based on the allegation that he was our agent. The complaint seeks from us and Walkup (1) 1,075,000 shares of our common stock and (2) money damages in the amount of $425,000. Without admitting any responsibility, the Company and the Plaintiff have settled the matter. Under the settlement agreement, the Company agreed to issue 400,000 restricted shares of common stock valued at $62,000 to the Plaintiff as consideration for the settlement. These shares are being issued after the date of these financial statements. In addition, the Company has agreed to issue an additional 275,000 shares as liquidated damages if it breaches a certain material representation to be included in the settlement agreement. On August 15, 2016, the Company instituted a legal action in Arizona against, Tumbleweed Holdings Inc., ("TW"). The complaint alleged that (i) TW breached the joint venture agreement by failing to fund the remaining $15,000 due to the joint venture company by April 29, 2016, (ii) TW breached the joint venture agreement by failing to fund the last $50,000 convertible note due to the Company by April 29, 2016, and (iii) TW breached the joint venture agreement by failing to fund their respective 40% of development expense in excess of the initial $100,000. The Company seeks damages in the amount of $128,000 plus interest. On September 22, 2016, Tumbleweed Holdings Inc., instituted a counterclaim in Arizona in response to the above legal action. The complaint alleged that (i) The Company breached the joint venture agreement by failing to leverage relationships and failing to provide budgeting and accounting records, (ii) the Company breached implied covenant of good faith and fair dealing by enticing TW into making significant contributions and then failing to perform under the agreement, (iii) the Company was unjustly enriched by having use of funds contributed by TW, (iv) the Company converted funds contributed by TW into its own assets, and (v) the Company has not provided accounting for all funds received by TW. TW seeks damages in the amount to be determined at trial. The Company believes these claims are without merit and intends to vigorously defend itself against them. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2016 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 16 SUBSEQUENT EVENTS Loan Advances Since September 30, 2016, Kae Yong Park, a significant shareholder, and her spouse, Howard R. Baer, made additional unsecured advances to the Company of $30,450, leaving a balance due of $1,323,157 at November 14, 2016. Changes in Management On November 13, 2016, John Hollister tendered his resignation as Interim CEO. His resignation was not the result of any dispute with the Company. |
INVESTMENT IN JOINT VENTURE (Ta
INVESTMENT IN JOINT VENTURE (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
INVESTMENT IN JOINT VENTURE (Tables): | |
INVESTMENT IN JOINT VENTURE (Tables) | Summary revenue information on the joint venture for the nine months ended September 30, 2016 and 2015 is as follows: For the Nine Months Ended September 30, 2016 September, 2015 (Unaudited) (Unaudited) Revenues $ - $ - Operating Expenses: General administrative 14,025 - Rent - related party 3,600 - Total operating expenses 17,625 - Loss from operations (17,625) - Net Loss $ (17,625) $ - Company Share of Net Loss $ (13,141) $ - |
SECURITIES (Tables)
SECURITIES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Securities | |
Summarizes fair value at the commitment and re-measurement | The Company has classified the warrant as having Level 2 inputs, and has used the Black-Scholes option-pricing model to value the warrant. The fair value at the commitment and re-measurement dates for the above warrant was based upon the following management assumptions: Commitment Date Re-measurement Dates Expected dividends 0% 0% Expected volatility 328% 289 - 291% Expected term: 3 years 2.41 - 2.67 years Risk free interest rate 0.91% 0.71 - 0.88% |
Summarizes the securities activity for the three months | The following table summarizes the securities activity for the nine months ended September 30, 2016: Balance December 31, 2015 $ - Warrants received 175,0744 Exercised - Realized gain (loss) - Unrealized gain (loss) (70,960) Balance September 30, 2016 $ 104,084 |
WEB DEVELOPMENT COSTS AND DOM24
WEB DEVELOPMENT COSTS AND DOMAIN NAMES ASSETS (TABLE) | 9 Months Ended |
Sep. 30, 2016 | |
WEB DEVELOPMENT COSTS AND DOMAIN NAMES ASSETS (TABLE): | |
WEB DEVELOPMENT COSTS AND DOMAIN NAMES ASSETS (TABLE) | Fair value is determined through various valuation techniques, including market and income approaches as considered necessary. During the nine months ended September 30, 2016 and 2015 the Company recorded amortization expense of $54,273 and $44,492, respectively, related to websites previously launched. As of September 30, 2016 As of December 31, 2015 Amortization Period Web development costs $ 323,162 $ 339,162 5 years Capitalized costs - - Less: reallocation of cost to invoices - (16,000) Less: accumulated depreciation (128,107) (73,833) $ 195,055 $ 249,329 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
PROPERTY AND EQUIPMENT {1} | |
PROPERTY AND EQUIPMENT (Tables) | Property and equipment consisted of the following at September 30, 2016 and December 31, 2015: As of September 30, 2016 As of December 31, 2015 Estimated Useful Life Furniture and equipment $ 12,437 $ 12,437 3 years Total 12,437 12,437 Less: Accumulated depreciation (8,726) (5,616) $ 3,711 $ 6,821 |
ACCOUNTS PAYABLE AND ACCRUED 26
ACCOUNTS PAYABLE AND ACCRUED EXPENSES RELATED PARTY (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES RELATED PARTY (Tables): | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES RELATED PARTY (Tables) | At September 30, 2016, the Company had a balance in related party accounts payable and accrued expenses of $583,781 which consisted of the following: Party Name: Relationship: Amount Howard Baer Spouse of majority shareholder Consulting fees 225,500 Howard Baer Spouse of majority shareholder Accrued interest 42,339 John Venners Director/EVP, President and CEO of Kuboo, Inc. Consulting fees/salaries 188,466 John Venners Director/EVP, President and CEO of Kuboo, Inc. Advances 3,000 Kuboo, Inc. Former parent company, significant shareholder Rent 124,476 $ 583,781 |
NOTES PAYABLE RELATED PARTY (Ta
NOTES PAYABLE RELATED PARTY (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
NOTES PAYABLE RELATED PARTY {1} | |
NOTES PAYABLE RELATED PARTY (Tables) | The following table summarizes the Companys balance for these advances for the nine months ended September 30, 2016: Amount due - December 31, 2015 $ 949,307 Advances received from Park 471,400 Debt assigned to investor (65,000) Repayments made to Park (63,000) Balance dueSeptember 30, 2016 $ 1,292,707 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
NOTES PAYABLE (Tables) | |
Dilutive shares associated with convertible notes outstanding | Dilutive shares associated with convertible notes outstanding at September 30, 2016 is as follows: Principal Shares Note dated February 29, 2016, convertible at $0.20 per share $ 50,000 250,000 Note dated April 8, 2016, convertible at $0.20 per share 50,000 250,000 Total Dilutive shares September 30, 2016 $ 100,000 500,000 |
Summarizes the Company's notes payable | The following table summarizes the Companys notes and convertible notes payable for the nine months ended September 30, 2016: Notes Convertible Notes Balance December 31, 2015 $ 79,900 $ - Note proceeds received - 100,000 Repayments on notes - - Balance September 30, 2016 $ 79,900 $ 100,000 |
STOCK WARRANTS (Tables)
STOCK WARRANTS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Company's outstanding stock warrants | |
Schedule of Assumptions Used | The Company has applied fair value accounting for all warrants issued. The fair value of each warrant granted is estimated on the date of grant using the Black-Scholes option-pricing model. The fair value at the commitment date for the above warrants were based upon the following management assumptions: Commitment Date Expected dividends 0% Expected volatility 163% - 177% Expected term: 2 - 3 years Risk free interest rate 0.58% 0.91% |
Company's warrant activity | A summary of the Companys warrant activity for the nine months ended September 30, 2016 is as follows: Number of Warrants Weighted Average Exercise Price Outstanding December 31, 2015 11,105,285 $ 0.08 Granted 6,650,318 0.08 Exercised/settled - - Balance as September 30, 2016 17,755,603 $ 0.08 |
Company's outstanding stock warrants | The Companys outstanding warrants at September 30, 2016 are as follows: Warrants Outstanding Warrants Exercisable Exercise Price Range NumberOutstanding Weighted AverageRemainingContractual Life (inyears) Weighted AverageExercise Price NumberExercisable WeightedAverageExercise Price Intrinsic Value $0.05 - $0.25 17,755,603 1.45 $ 0.08 17,755,603 $ 0.08 1,043,215 |
ORGANIZATION AND BASIS OF PRE30
ORGANIZATION AND BASIS OF PRESENTATION (Details) | Feb. 29, 2016 | Jun. 25, 2014USD ($)shares | May 31, 2011 |
Organization and basis of presentation Details | |||
Safe Communications, Inc acquired Company's issued and outstanding common stock | 80.00% | ||
Company completed the acquisition of approximately cannabis related Internet domain names | 7,500 | ||
Company issued shares of its common stock | shares | 78,500,000 | ||
Company issued a promissory note in the principal amount | $ | $ 500,000 | ||
The seller of the domain names became an stockholder of the Company. | 81.00% | ||
The Company own equity and future earnings of the joint venture company | 60.00% | ||
Tumbleweed Holdings, Inc. ("TW"), equity and future earnings of the joint venture company | 40.00% |
LIQUIDITY_GOING CONCERN (Detail
LIQUIDITY/GOING CONCERN (Details) - USD ($) | 9 Months Ended | 101 Months Ended |
Sep. 30, 2016 | Sep. 30, 2016 | |
Going concern details | ||
Accumulated losses | $ 20,479,164 | |
Raised capital through the sale of convertible notes | $ 100,000 | |
Received a net in loans from its significant shareholder | $ 408,400 |
INVESTMENT IN JOINT VENTURE (De
INVESTMENT IN JOINT VENTURE (Details) - USD ($) | Sep. 30, 2016 | Feb. 29, 2016 |
Investment in Joint Venture Details | ||
Company owns percent of equity of the joint venture company | 60.00% | |
Tumbleweed Holdings (TW) owns percent of equity of the joint venture company | 40.00% | |
The Company contributed the URL to the joint venture entity, in exchange for the joint venture | 60.00% | |
TW contributed towards the development of the online web portal, | $ 30,000 | |
TW Contributed additional towards the development of the online web portal | 70,000 | |
Principal amounts of notes | 500,000 | |
TW agreed to purchase an aggregate in principal amount of convertible notes | $ 150,000 | |
Company's common stock at a conversion price per share | $ 0.20 | |
Receive an amount equal to percent of face value of the notes | 50.00% | |
Additionally, both parties issued the other a warrant to purchase their outstanding common stock | 4.90% | |
TW issued a warrant to the Company to purchase shares of common stock | 9,770,878 | |
TW Issued shares of common stock exercise price per share | $ 0.02 | |
Purchased shares valued at | $ 175,044 | |
Company issued a warrant to TW to purchase shares | 5,525,318 | |
Company's common stock at an exercise price. | $ 0.08 | |
TW Purchased shares valued at | $ 475,751 | |
Company's initial investment in the joint venture company was recorded at the historic cost basis . | 0 | |
Expenses related to the excess value of warrants | $ 300,707 | |
Tumbleweed owed the joint venture company the remaining in development and funded the Company | $ 15,000 | |
Company paid for final note purchase | $ 50,000 |
INVESTMENT IN JOINT VENTURE - D
INVESTMENT IN JOINT VENTURE - DURING THE PERIOD (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2016 | Sep. 30, 2016 | |
Investment in Joint Venture During the period Details | ||
Tumbleweed contributed an additional amount to joint venture company | $ 85,000 | |
The joint venture company experienced a net loss attributable to the Company's 60% ownership | $ 10,200 | $ 13,141 |
SUMMARY OF REVENUE INFORMATION
SUMMARY OF REVENUE INFORMATION ON THE JOINT VENTURE (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Summary of revenue information on the joint venture Details | ||
Revenues | $ 0 | $ 0 |
Operating Expenses: | ||
General administrative | 14,025 | 0 |
Rent - related party | 3,600 | 0 |
Total operating expenses | 17,625 | 0 |
Loss from operations | (17,625) | 0 |
Net Loss | (17,625) | 0 |
Company Share of Net Loss | $ (13,141) | $ 0 |
ADVANCES - RELATED PARTY (Detai
ADVANCES - RELATED PARTY (Details) | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Advances - related party Details | |
Tumbleweed Holdings agreed to fund one hundred percent for web development | $ 100,000 |
Company received funds related to its joint venture | 235,796 |
Spent cash on behalf of its joint venture totaling | 117,231 |
Company's share of costs | 92,053 |
Due from Tumbleweed Holdings | $ 25,268 |
SECURITIES (Narrative) (Details
SECURITIES (Narrative) (Details) | Sep. 30, 2016USD ($)$ / sharesshares |
SECURITIES Details | |
Received a warrant to purchase up to shares of Tumbleweed Holdings, Inc | shares | 9,770,878 |
Exercise price of the warrant | $ / shares | $ 0.02 |
Initial value of the warrant | $ | $ 175,044 |
Commitment Date: | |
Expected dividends | 0.00% |
Expected volatility | 328.00% |
Expected term: (years) | 3 |
Risk free interest rate | 0.91% |
Re-measurement Date | |
Expected dividends | 0.00% |
Expected volatility minimum | 289.00% |
Expected volatility maximum | 291.00% |
Expected term: (years) minimum | 2.41 |
Expected term: (years) maximum | 2.67 |
Risk free interest rate minimum | 0.71% |
Risk free interest rate maximum | 0.88% |
SUMMARY OF THE SECURITIES ACTIV
SUMMARY OF THE SECURITIES ACTIVITY (Details) | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Summary of the securities activity Details | |
Balance - December 31, 2015 | $ 0 |
Warrants received | 1,750,744 |
Exercised | 0 |
Realized gain (loss) | 0 |
Unrealized gain (loss) | (70,960) |
Balance - September 30, 2016 | $ 104,084 |
WEB DEVELOPMENT COSTS AND DOM38
WEB DEVELOPMENT COSTS AND DOMAIN NAMES ASSETS (Narrative) (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Web development costs and domain name assets Narrative Details | ||
Website development expenses | $ 10,470 | $ 40,232 |
Amortization expense | $ 54,273 | $ 44,492 |
WEB DEVELOPMENT COSTS (Details)
WEB DEVELOPMENT COSTS (Details) | Sep. 30, 2016USD ($) | Dec. 31, 2015USD ($) |
Web development costs Details | ||
Web development costs | $ 323,162 | $ 339,162 |
Capitalized costs | 0 | 0 |
Less: reallocation of cost to invoices | 0 | (16,000) |
Less: accumulated depreciation | (128,107) | (73,833) |
Total web development costs | $ 195,055 | $ 249,329 |
Amortization Period (in years) | 5 | 5 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) | Sep. 30, 2016USD ($) | Dec. 31, 2015USD ($) |
Furniture and equipment Details | ||
Furniture and equipment | $ 12,437 | $ 12,437 |
Total furniture and equipment net | 12,437 | 12,437 |
Less: Accumulated depreciation. | (8,726) | (5,616) |
Net total of Furniture and euqipment | $ 3,711 | $ 6,821 |
Estimated useful life in years | 3 | 3 |
PROPERTY AND EQUIPMENT - DEPREC
PROPERTY AND EQUIPMENT - DEPRECIATION (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Property and Equipment Depreciation Details | ||
Depreciation of property and equipment | $ 3,110 | $ 3,109 |
ACCOUNTS PAYABLE AND ACCRUED 42
ACCOUNTS PAYABLE AND ACCRUED EXPENSES RELATED PARTY (Details) | Sep. 30, 2016USD ($) |
Accounts payable and accrued expenses related party Details | |
Howard Baer, Spouse of majority shareholder Consulting fees | $ 225,500 |
Howard Baer, Spouse of majority shareholder Accured interest | 42,339 |
John Venners Director, President and CEO of Kuboo, Inc Consulting fees/salaries | 188,466 |
John Venners Director, President and CEO of Kuboo, Inc Advances | 3,000 |
Kuboo, Inc, Former parent company, significant shareholder Rent | 124,476 |
Total Accounts payable and accrued expenses | $ 583,781 |
NOTES PAYABLE RELATED PARTY (Na
NOTES PAYABLE RELATED PARTY (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Notes payable related party Narrative Details | |
Park advanced an aggregate amount on an unsecured basis to the Company for short-term capital needs | $ 471,400 |
Company also repaid its secured debt to Park | 63,000 |
Company had a note payable to Park for these advances | $ 1,292,707 |
NOTES PAYABLE RELATED PARTY (De
NOTES PAYABLE RELATED PARTY (Details) | Sep. 30, 2016USD ($) | May 11, 2016USD ($) | Jul. 25, 2014USD ($) | Jun. 23, 2014USD ($) |
Notes payable related Party Details | ||||
Additionally, Park assigned debt owned by the company to another investor | $ 65,000 | |||
Company issued a promissory note | $ 500,000 | |||
Purchase of approx cannabis-related internet domain names | 7,500 | |||
Interest at the rate per annum | 3.25% | |||
Receipt of an aggregate in funding | $ 1,000,000 | |||
Company paid to the note holder | 100,000 | |||
Remaining debt is payable in thirty six equal monthly installment | $ 400,000 | |||
Company realizes at least in gross revenue | $ 150,000 | |||
Amended and restated the promissory note, principal | $ 500,000 | |||
First instalment payment due | 100,000 | |||
Amount due under the Amended and Restated Note waived by Kae Yong Park | $ 100,000 |
SUMMARY OF THE COMPANY'S BALANC
SUMMARY OF THE COMPANY'S BALANCE FOR THE ADVANCES (Details) | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Summary of the Company's balance for the advances Details | |
Amount due - December 31, 2015 | $ 949,307 |
Advances received from Park | 471,400 |
Debt assigned to investor | (65,000) |
Repayments made to Park | (63,000) |
Balance due-September 30, 2016 | $ 1,292,707 |
NOTES PAYABLE - NOTES (Details)
NOTES PAYABLE - NOTES (Details) - USD ($) | Sep. 30, 2016 | Aug. 10, 2015 | Jul. 01, 2015 |
Notes Details | |||
Seven (7) day loan agreement with two parties for aggregate proceeds | $ 34,900 | ||
One hundred twenty (120) day loan agreement with an existing investor for aggregate proceeds | $ 45,000 | ||
Interest rate per annum | 6.00% | 6.00% | |
Aggregate shares of common stock issued | 1,200,000 | 349,000 | |
Aggregate shares of common stock, value | $ 38,918 | $ 26,016 | |
Warrants issued to purchase aggregate shares of the company | 100,000 | ||
Exercise price of the warrants | $ 0.25 | ||
Value of aggregate shares issued under warrants | $ 6,898 | ||
Note-1 have not yet been repaid and principal and interest totaling is in default | $ 37,505 | ||
Note-2 have not yet been repaid and principal and interest totaling is in default | $ 47,645 |
NOTES PAYABLE - CONVERTIBLE NOT
NOTES PAYABLE - CONVERTIBLE NOTES (Narrative) (Details) - USD ($) | Sep. 30, 2016 | Feb. 29, 2016 |
Convertible Notes Narrative Details | ||
Issued three convertible notes, each value | $ 50,000 | |
Notes convertible into shares at price per share | $ 0.20 | |
Notes convertible into shares each | 250,000 | |
Proceeds from third note had not been received | $ 50,000 |
DILUTIVE SHARES ASSOCIATED WITH
DILUTIVE SHARES ASSOCIATED WITH CONVERTIBLE NOTES OUTSTANDING (Details) - USD ($) | Sep. 30, 2016 | Apr. 08, 2016 | Feb. 29, 2016 |
Dilutive shares associated with convertible notes outstanding Details | |||
Note convertible at $0.20 per share, principal | $ 50,000 | $ 50,000 | |
Note convertible at $0.20 per share, shares | 250,000 | 250,000 | |
Total Principal | $ 100,000 | ||
Total Dilutive Shares | 500,000 |
SUMMARY OF THE COMPANY'S NOTES
SUMMARY OF THE COMPANY'S NOTES AND CONVERTIBLE NOTES PAYABLE (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Summary of the Company's notes and convertible notes payable Details | ||
Balance of notes | $ 79,900 | $ 0 |
Note proceeds received -convertible notes | 0 | 100,000 |
Repayments on notes | 0 | 0 |
Balance of notes and convertible notes | $ 79,900 | $ 100,000 |
STOCK WARRANTS (Details)
STOCK WARRANTS (Details) - USD ($) | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Feb. 29, 2016 |
Stock Warrants Details | ||||
Company agreed to issue a warrant to purchase shares | 5,525,318 | |||
Exercise price per share | $ 0.09 | $ 0.09 | $ 0.09 | $ 0.08 |
Warrants were valued | $ 39,638 | $ 29,720 | $ 33,236 | $ 475,751 |
Issued two year warrants to John Hollister, Interim CEO, to purchase shares | 375,000 | 375,000 | 375,000 |
WARRANTS GRANTED - MANAGEMENT A
WARRANTS GRANTED - MANAGEMENT ASSUMPTIONS (Details) | Sep. 30, 2016 |
Management Assumptions | |
Expected dividends | 0.00% |
Expected volatility Minimum | 163.00% |
Expected volatility Maximum | 177.00% |
Expected term minimum (years) | 2 |
Expected term maximum (years) | 3 |
Risk free interest rate minimum | 0.58% |
Risk free interest rate maximum | 0.91% |
SUMMARY OF WARRANT ACTIVITY (De
SUMMARY OF WARRANT ACTIVITY (Details) - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 |
Number of Warrants | ||
Outstanding | 11,105,285 | |
Granted | 650,318 | |
Exercised/settled | 0 | |
Balance | 17,755,603 | |
Weighted Average Exercise Price | ||
Outstanding | $ 0.08 | |
Granted | 0.08 | |
Exercised/settled | $ 0 | |
Balance | $ 0.08 |
WARRANTS OUTSTANDING AND EXERCI
WARRANTS OUTSTANDING AND EXERCISABLE (Details) | Sep. 30, 2016USD ($)$ / sharesshares |
Warrants Outstanding and Exercisable Details | |
Exercise price range minimum | $ 0.05 |
Exercise price range maximum | $ 0.25 |
Warrants Outstanding Details | |
Number of Warrants Outstanding | shares | 17,755,603 |
Weighted Average Remaining Contractual Life of Warrants outstanding (in years) | 1.45 |
Weighted Average Exercise Price of Warrants Outstanding | $ 0.08 |
Warrants Exercisable Details | |
Number of Warrants Exercisable | shares | 17,755,603 |
Weighted Average Exercise Price of Warrants Exercisable | $ 0.08 |
Intrinsic Value of Warrants Exercisable | $ | $ 1,043,215 |
STOCK WARRANTS - DURING THE PER
STOCK WARRANTS - DURING THE PERIOD (Details) | 9 Months Ended |
Sep. 30, 2016$ / shares | |
Stock Warrants During the Period Details | |
Weighted average fair value per warrant issued | $ 0.09 |
EARNINGS (LOSS) PER SHARE (Deta
EARNINGS (LOSS) PER SHARE (Details) - shares | Sep. 30, 2016 | Dec. 31, 2015 |
Common stock Equivalents Details | ||
Warrants (exercise price $0.05 - $0.25/share) | 17,755,603 | 5,516,000 |
Convertible debt (exercise price $0.20/share) | 500,000 | 0 |
Total Warrants and Convertible debt | 18,255,603 | 5,516,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | May 11, 2016 | Jan. 01, 2016 | Jul. 25, 2014 | Jun. 23, 2014 |
Related party transactions Details | ||||
Issued to the Seller on the closing date in shares | 78,500,000 | |||
Restricted common stock in percentage | 81.00% | |||
Issued to the Seller a promissory note in the principal amount | 500,000 | |||
The note bears interest | 3.25% | |||
Company's receipt of an aggregate | 1,000,000 | |||
Debt Equity paid amount | 100,000 | |||
Company shall pay the remaining balance amount | $ 400,000 | |||
Company realizes amount | $ 150,000 | |||
Monthly royalty to the Seller | 6.00% | |||
Royalty Payment | $ 150,000 | |||
Company has gross revenues in excess | $ 150,000 | |||
Kae Yong Park make first installment payment | $ 100,000 | |||
Company pay due under the Amended and Restated Note | 100,000 | |||
Agreed to pay Kae Yong Park for any consulting services | 9,500 | |||
Company is renting 6,100 square feet of space for monthly rent | $ 11,500 | |||
Additionally, Park assigned debt owned by the company to another investor | $ 65,000 | |||
Issued the investor a one year note | $ 65,000 | |||
Amended promissory note with Kae Yong Park and Howard R. Baer, principal | $ 564,000 | |||
Accrued interest owed under the agreement | $ 42,339 |
RELATED PARTY TRANSACTIONS - DU
RELATED PARTY TRANSACTIONS - DURING THE PERIOD (Details) | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Related party transactions During the period Details | |
Incurred expenses payable to Kuboo, Inc. for rent | $ 99,900 |
Allocated rent expenses to the Joint Venture Company | 3,600 |
Kae Yong Park, a significant shareholder, and her spouse, Howard Baer, advanced an aggregate amount | 471,400 |
Incurred expenses related to its consulting contract with Howard Baer | 135,000 |
Company received funds related to its joint venture | 85,000 |
Cash on behalf of its joint venture totaling | 202,321 |
Company's 60% share of the joint venture's expenses | 92,053 |
The remaining is is included in accounts payable | $ 25,268 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | Aug. 15, 2016 | Aug. 07, 2015 | Jul. 25, 2014 | Jun. 23, 2014 | May 31, 2014 |
COMMITMENTS AND CONTINGENCIES Details | |||||
Gross monthly revenue | $ 0 | $ 0 | $ 0 | $ 0 | $ 150,000 |
Company gross revenues are in excess | 0 | 0 | 0 | 0 | 150,000 |
Promissory note issued by the company | $ 0 | $ 0 | $ 0 | $ 500,000 | $ 0 |
Promissory note interest | 0.00% | 0.00% | 0.00% | 3.25% | 0.00% |
Company in receipt of amount | $ 0 | $ 0 | $ 0 | $ 1,000,000 | $ 0 |
Euqity fund amount | 0 | 0 | 0 | 100,000 | 0 |
Least gross revenue | 0 | 0 | 0 | 150,000 | 0 |
In 36 months payable amount | 0 | 0 | 0 | 400,000 | 0 |
Shareholder, Kae Park, and her spouse Howard Baer (collectively "Park"), under which Park committed to advance the Company a minimum | 0 | 0 | 500,000 | 0 | 0 |
Company made first installment to lender | 0 | 0 | 100,000 | 0 | 0 |
Thereafter, Kae Yong Park waived the requirement that the Company pay the due | 0 | 0 | 100,000 | 0 | 0 |
Park's receipt of funding from a third party lender | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Park's receipt of funding from a third party lender number of shares | 0 | 0 | 0 | 0 | 0 |
Under the pledge agreement, if Park defaults on the repayment of the note | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
represented to the Plaintiff that he had the right to subscribe to shares of our common stock at a per share price of | $ 0 | $ 0.25 | $ 0.25 | $ 0 | $ 0 |
Walkup was the Company's agent and individually and in such alleged agency capacity offered to sell Plaintiff an aggregate of shares | 0 | 1,075,000 | 0 | 0 | 0 |
company common stock for a total purchase price | $ 0 | $ 425,000 | $ 0 | $ 0 | $ 0 |
Damamge amount | 0 | 425,000 | 0 | 0 | 0 |
Company has agreed to issue 400,000 restricted shares of common stock valued at | $ 0 | $ 62,000 | $ 0 | $ 0 | $ 0 |
Company has agreed to issue an additional shares as liquidated damages if it breaches | 0 | 275,000 | 0 | 0 | 0 |
TW breached the joint venture agreement by failing to fund the remaining due | $ 15,000 | $ 0 | $ 0 | $ 0 | $ 0 |
TW breached the joint venture agreement by failing to fund the last note | 50,000 | 0 | 0 | 0 | 0 |
TW breached the joint venture agreement by failing to fund 40% of development expense in excess of the initial | 100,000 | 0 | 0 | 0 | 0 |
Company seeks damages plus interest | $ 128,000 | $ 0 | $ 0 | $ 0 | $ 0 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | Nov. 14, 2016USD ($) |
Loan Advances | |
Howard R. Baer, made additional unsecured advances to the Company | $ 30,450 |
Balance due | $ 1,323,157 |