Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 11-May-15 | |
Document And Entity Information | ||
Entity Registrant Name | ADVANCED MEDICAL ISOTOPE Corp | |
Entity Central Index Key | 1449349 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Is Entity a Well-known Seasoned Issuer | No | |
Is Entity a Voluntary Filer | No | |
Is Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 1,971,934,122 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2015 |
Condensed_Balance_Sheets
Condensed Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
ASSETS | ||
Cash | $2,485 | $203 |
Prepaid expenses | 20,800 | 21,710 |
Inventory | 8,475 | 8,475 |
Total current assets | 31,760 | 30,388 |
Fixed assets, net of accumulated depreciation | 7,423 | 8,753 |
License fees, net of amortization | 0 | 1,339 |
Patents and intellectual property | 35,482 | 35,482 |
Debt issuance costs | 4,277 | 13,917 |
Deposits | 644 | 644 |
Total other assets | 40,403 | 51,382 |
Total assets | 79,586 | 90,523 |
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||
Accounts payable and accrued expenses | 1,431,213 | 1,461,028 |
Accrued interest payable | 1,796,604 | 1,656,763 |
Payroll liabilities payable | 372,751 | 309,160 |
Convertible notes payable, net | 935,806 | 600,569 |
Derivative liability | 9,190,076 | 11,502,380 |
Related party convertible notes payable, net | 4,507,528 | 4,430,204 |
Current portion of capital lease obligations | 0 | 39,481 |
Liability for lack of authorized shares | 3,018,312 | 253,106 |
Total current liabilities | 21,252,290 | 20,252,691 |
Stockholders' Equity (Deficit): | ||
Preferred Stock, $.001 par value, 20,000,000 shares authorized; zero issued and outstanding | 0 | 0 |
Common stock, $.001 par value; 2,000,000,000 shares authorized; 1,888,434,122 and 1,705,382,554 shares issued and outstanding, respectively | 1,888,434 | 1,705,382 |
Paid in capital | 29,611,360 | 32,379,681 |
Accumulated deficit | -52,672,498 | -54,247,231 |
Total stockholders' equity (deficit) | -21,172,704 | -20,162,168 |
Total liabilities and stockholders' equity (deficit) | $79,586 | $90,523 |
Condensed_Balance_Sheets_Paren
Condensed Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Stockholders' Equity (Deficit): | ||
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, authorized | 20,000,000 | 20,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, authorized | 2,000,000,000 | 2,000,000,000 |
Common stock, issued | 1,888,434,122 | 1,705,382,554 |
Common stock, outstanding | 1,888,434,122 | 1,705,382,554 |
Condensed_Statements_of_Operat
Condensed Statements of Operations (Unaudited) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Income Statement [Abstract] | ||
Revenues | $12,054 | $14,054 |
Operating expenses | ||
Cost of materials | 390 | 251 |
Sales and marketing expenses | 0 | 600 |
Depreciation and amortization | 2,669 | 2,998 |
Professional fees | 63,993 | 185,177 |
Stock options granted | 28,500 | 58,187 |
Payroll expenses | 191,536 | 189,563 |
General and administrative expenses | 53,779 | 122,971 |
Total operating expenses | 340,867 | 559,747 |
Operating loss | -328,813 | -545,693 |
Non-operating income (expense) | ||
Interest expense | -326,140 | -393,283 |
Net loss on settlement of debt | -3,574 | -32,630 |
Recognized income from grants | 0 | 0 |
Gain (loss) on derivative liability | 2,233,260 | 111,796 |
Non-operating income (expense), net | 1,903,546 | -537,709 |
Gain (Loss) before Income Taxes | 1,574,733 | -1,083,402 |
Income Tax Provision | 0 | 0 |
Net Gain (Loss) | $1,574,733 | ($1,083,402) |
Gain (Loss) per common share | $0.00 | ($0.01) |
Weighted average common shares outstanding | 1,705,623,106 | 106,653,383 |
Condensed_Statement_of_Changes
Condensed Statement of Changes in Stockholders' Equity (Deficit) (USD $) | Common Stock | Paid-In Capital | Accumulated Deficit | Total |
Beginning Balance, Amount at Dec. 31, 2014 | $1,705,382 | $32,379,681 | ($54,247,231) | ($20,162,168) |
Beginning Balance, Shares at Dec. 31, 2014 | 1,705,382,554 | |||
Common stock issued for: Cash and the exercise of warrants, Amount | 91,000 | -91,000 | ||
Common stock issued for: Cash and the exercise of warrants, Shares | 91,000,000 | |||
Common stock issued for: Loan fees on convertible debt, Amount | 3,579 | 38,045 | 41,624 | |
Common stock issued for: Loan fees on convertible debt, Shares | 3,579,221 | |||
Common stock issued for: Debt converted, Amount | 92,052 | 17,761 | 109,813 | |
Common stock issued for: Debt converted, Shares | 92,051,568 | |||
Classified to liability due to lack of authorizes shares, Amount | -3,579 | -2,761,627 | -2,765,206 | |
Classified to liability due to lack of authorizes shares, Shares | -3,579,221 | |||
Options and warrants issued for services | 28,500 | 28,500 | ||
Net Loss | 1,574,733 | 1,574,733 | ||
Ending Balance, Amount at Mar. 31, 2015 | $1,888,434 | $29,611,360 | ($52,672,498) | ($21,172,704) |
Ending Balance, Shares at Mar. 31, 2015 | 1,888,434,122 |
Condensed_Statements_of_Cash_F
Condensed Statements of Cash Flow (Unaudited) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
CASH FLOW FROM OPERATING ACTIVITIES: | ||
Net Loss | $1,574,733 | ($1,083,402) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Depreciation of fixed assets | 1,330 | 1,540 |
Amortization of licenses and intangible assets | 1,339 | 1,458 |
Amortization of convertible debt discount | 176,380 | 545,263 |
Amortization of debt issuance costs | 9,640 | 13,607 |
Amortization of prepaid expenses paid with stock | 0 | 28,897 |
Common stock issued for services | 0 | 10,900 |
Stock options and warrants issued for services | 28,500 | 58,187 |
Gain (Loss) on derivative liability | -2,233,260 | -111,796 |
Loss on settlement of debt | 3,574 | 32,630 |
Changes in operating assets and liabilities: | ||
Prepaid expenses | 910 | -20,862 |
Accounts payable | -29,815 | -24,372 |
Payroll liabilities | 63,591 | -7,346 |
Accrued interest | 139,841 | 127,589 |
Net cash used by operating activities | -263,237 | -427,707 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Cash used to acquire patents and intellectual property | 0 | 0 |
Net cash used by investing activities | 0 | 0 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on Washington Trust debt | 0 | 0 |
Principal payments on capital lease | -39,481 | -64,497 |
Debt issuance costs | 0 | -36,145 |
Proceeds from convertible debt | 305,000 | 623,990 |
Principal payments on convertible debt | 0 | -10,000 |
Proceeds from exercise of warrants | 0 | 6,000 |
Net cash provided by financing activities | 265,519 | 519,348 |
Net increase (decrease) in cash | 2,282 | 91,641 |
Cash, beginning of period | 203 | 0 |
CASH, END OF PERIOD | 2,485 | 91,641 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 9,920 | 126,494 |
Cash paid for income taxes | $0 | $0 |
1_BASIS_OF_PRESENTATION_AND_SI
1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||
NOTE 1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | The accompanying condensed financial statements of the Company have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures required by accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations. These condensed financial statements reflect all adjustments that, in the opinion of management, are necessary to present fairly the results of operations of the Company for the period presented. The results of operations for the three months ended March 31, 2015, are not necessarily indicative of the results that may be expected for any future period or the fiscal year ending December 31, 2015. | ||||||||||||||||
Use of Estimates | |||||||||||||||||
The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||
Fair Value of Financial Instruments, requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of March 31, 2015 and December 31, 2014, the balances reported for cash, prepaid expenses, accounts receivable, accounts payable, and accrued expenses, approximate the fair value because of their short maturities. | |||||||||||||||||
The Company adopted ASC Topic 820 (originally issued as SFAS 157, “Fair Value Measurements”) as of January 1, 2008 for financial instruments measured as fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States and expands disclosures about fair value measurements. | |||||||||||||||||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include: | |||||||||||||||||
Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; | |||||||||||||||||
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and | |||||||||||||||||
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. | |||||||||||||||||
The Company measures certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis were calculated using the Black-Scholes pricing model and are as follows at March 31, 2015: | |||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets | |||||||||||||||||
Total Assets Measured at Fair Value | $ | - | $ | - | $ | - | $ | - | |||||||||
Liabilities | |||||||||||||||||
Derivative Liability | $ | 9,190,076 | $ | - | $ | - | $ | 9,190,076 | |||||||||
Total Liabilities Measured at Fair Value | $ | 9,190,076 | $ | - | $ | - | $ | 9,190,076 | |||||||||
Recent Accounting Pronouncements | |||||||||||||||||
There are no recently issued accounting pronouncements that the Company believes are applicable or would have a material impact on the financial statements of the Company. |
2_GOING_CONCERN
2. GOING CONCERN | 3 Months Ended |
Mar. 31, 2015 | |
Text Block [Abstract] | |
NOTE 2. GOING CONCERN | The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company has suffered recurring losses and used significant cash in support of its operating activities and the Company’s cash position is not sufficient to support the Company’s operations. This raises substantial doubt about the Company’s ability to continue as a going concern. Historically, the Company has relied upon outside investor funds to maintain the Company’s operations and develop the Company’s business. The Company anticipates it will continue to require funding from investors for working capital as well as business expansion during this fiscal year and it can provide no assurance that additional investor funds will be available on terms acceptable to us. These factors, among others, may indicate that the Company will be unable to continue as a going concern for a reasonable time. In addition, the Company’s ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered by entrance into established markets and the competitive environment in which it operates. |
The Company anticipates a requirement of $1.5 million in funds over the next twelve months to maintain current operation activities. In addition the Company anticipates spending from approximately $5 million to $10 million over the next 12-24 months fund the initial deployment of the Company’s brachytherapy products should FDA clearance be obtained, a modest distribution capability for third party isotopes and equipment and the potential acquisition of a controlling interest in a European company with which it is having discussions. As of March 31, 2015 the Company has $2,485 cash on hand which means there will be an anticipated shortfall of the full $5 to $10 million requirement in additional funds over the next twelve months. There are currently commitments to vendors for products and services purchased, plus, the employment agreements of the CFO and other employees of the Company and the Company’s current lease commitments that will necessitate liquidation of the Company if it is unable to raise additional capital. The current level of cash is not enough to cover the fixed and variable obligations of the Company. | |
Assuming the Company is successful in the Company’s sales/development effort it believes that it will be able to raise additional funds through the sale of the Company’s stock to either current or new stockholders. There is no guarantee that the Company will be able to raise additional funds or to do so at an advantageous price. | |
The financial statements do not include any adjustments relating to the recoverability and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis and ultimately to attain profitability. The Company plans to seek additional funding to maintain its operations through debt and equity financing and to improve operating performance through a focus on strategic products and increased efficiencies in business processes and improvements to the cost structure. There is no assurance that the Company will be successful in its efforts to raise additional working capital or achieve profitable operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
3_FIXED_ASSETS
3. FIXED ASSETS | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
FIXED ASSETS | |||||||||
Fixed assets consist of the following at March 31, 2015 and December 31, 2014: | |||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
Production equipment | $ | 2,131,377 | $ | 2,131,377 | |||||
Building | 446,772 | 446,772 | |||||||
Leasehold improvements | 3,235 | 3,235 | |||||||
Office equipment | 32,769 | 32,769 | |||||||
2,614,153 | 2,614,153 | ||||||||
Less accumulated depreciation | (2,606,730 | ) | (2,605,400 | ) | |||||
$ | 7,423 | $ | 8,753 | ||||||
Accumulated depreciation related to fixed assets is as follows: | |||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
Production equipment | $ | 2,124,370 | $ | 2,123,462 | |||||
Building | 446,772 | 446,772 | |||||||
Leasehold improvements | 3,235 | 3,235 | |||||||
Office equipment | 32,353 | 31,931 | |||||||
$ | 2,606,730 | $ | 2,605,400 | ||||||
Depreciation expense for the above fixed assets for the three months ended March 31, 2015 and 2014, respectively, was $1,330 and $1,540. |
4_INTANGIBLE_ASSETS
4. INTANGIBLE ASSETS | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||
NOTE 4. INTANGIBLE ASSETS | |||||||||
Intangible assets consist of the following at March 31, 2015 and December 31, 2014: | |||||||||
March 31, 2015 | 31-Dec-14 | ||||||||
License Fee | $ | 112,500 | $ | 112,500 | |||||
Less accumulated amortization | (112,500 | ) | (111,161 | ) | |||||
- | 1,339 | ||||||||
Patents and intellectual property | 35,482 | 35,482 | |||||||
Intangible assets net of accumulated amortization | $ | 35,482 | $ | 36,821 | |||||
Amortization expense for the above intangible assets for the three months ended March 31, 2015 and 2014, respectively, was $1,339 and $1,458. |
5_RELATED_PARTY_TRANSACTIONS
5. RELATED PARTY TRANSACTIONS | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Related Party Transactions [Abstract] | |||||||||
NOTE 5. RELATED PARTY TRANSACTIONS | Related Party Convertible Notes Payable | ||||||||
The Company issued various shares of common stock and convertible promissory notes during the three months ended March 31, 2015 to a director and major stockholder. The details of these transactions are outlined in Note 10: Stockholders’ Equity - Common Stock Issued for Convertible Debt. In addition the Company also entered into a $1,500 cash advance from a Director. | |||||||||
Rent Expenses | |||||||||
On July 17, 2007, the Company entered into a lease at 6208 West Okanogan Avenue, Kennewick, Washington, 99336 which has been used as the Company’s production center. The original term of the lease was five years, commencing on August 1, 2007, however, subsequent to July 31, 2012 the Company began renting this space on a month to month basis at $11,904 per month. The landlord of this space is a non-affiliated stockholder of the Company, who holds less than 5 percent of the total outstanding shares. The Company moved out of this facility as of December 31, 2014. There is an ongoing dispute with the landlord, Rob and Maribeth Myers, regarding the Production Facility rent | |||||||||
In January 2014, the Company entered into a new 12-month lease for its corporate offices for a monthly rent of $1,500 from an entity controlled by Carlton M. Cadwell, a significant shareholder and a Director of the Company. | |||||||||
There are no future minimum rental payments required under this rental agreement because it expired as of December 31, 2014 and subsequent to that date the Company is renting this space on a month to month basis. | |||||||||
Rental expense for the three months ended March 31, 2015 and 2014 consisted of the following: | |||||||||
Three months ended March 31, 2015 | Three months ended March 31, 2014 | ||||||||
Office and warehouse lease effective August 1, 2007 | |||||||||
Monthly rental payments | $ | - | $ | 147,613 | |||||
Corporate office | 4,500 | 18,000 | |||||||
Total Rental Expense | $ | 4,500 | $ | 165,613 |
6_PREPAID_EXPENSES_PAID_WITH_S
6. PREPAID EXPENSES PAID WITH STOCK | 3 Months Ended |
Mar. 31, 2015 | |
Notes to Financial Statements | |
NOTE 6. PREPAID EXPENSES PAID WITH STOCK | The Company issued stock for prepaid services for the year ended December 31, 2013 in the amount of $78,000 of which $26,000 expired in 2013 and was expensed and recorded as stock issued for services and $52,000 expired in 2014 was expensed and recorded as stock issued for services. The Company also issued stock for prepaid services for the year ended December 31, 2013 in the amount of $69,550 of which $5,796 expired in 2013 and was expensed and recorded as stock issued for services and $63,754 expired in 2014 and was expensed and recorded as stock issued for services. The Company also issued stock for prepaid services for the year ended December 31, 2013 in the amount of $3,600 of which $0 expired in 2013 and $3,600 expired in 2014 and was expensed and recorded as stock issued for services. Prepaid expenses completely expired through December 2014. |
7_SHORT_TERM_LOAN_PAYABLE
7. SHORT TERM LOAN PAYABLE | 3 Months Ended |
Mar. 31, 2015 | |
Debt Disclosure [Abstract] | |
7. SHORT TERM LOAN PAYABLE | The Company had research costs of $349,913 that were converted to an unsecured promissory note May 1, 2013. The note calls for 10% interest and was due May 1, 2014. On May 15, 2014 the Company renewed the unsecured promissory note as a 10% convertible debenture, due May 15, 2015, in the principal amount of $350,000 along with a warrant exercisable for shares of common stock of the Company and 532,609 shares of Common Stock. On June 6, 2014 the convertible debenture was converted into common stock of the Company for a total issuance of 16,530,974 shares of Common Stock. |
The Warrant is exercisable for three years from issuance to purchase up to the number of shares of Common Stock equal to the quotient obtained by dividing the original principal amount of the Debenture ($350,000) by the Warrant Exercise Price (subject to adjustment to maintain the original value proposition and to support the ability of Battelle to convert the full value of the indebtedness to shares of Common Stock) at a price per share equal to the Warrant Exercise Price in cash. The “Warrant Exercise Price” is equal to the lesser of the market value (defined as the mean market closing price per share over the 10 trading days immediately prior to the notice date of exercise) and $0.046 per share. | |
Interest in the amount of $2,031 was paid on this note for the year ended December 31, 2014. |
8_CONVERTIBLE_NOTES_PAYABLE
8. CONVERTIBLE NOTES PAYABLE | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||
8. CONVERTIBLE NOTES PAYABLE | As of March 31, 2015 and December 31, 2014 the Company had the following convertible notes outstanding: | ||||||||||||||||
31-Mar-15 | 31-Dec-14 | ||||||||||||||||
Principal (net) | Accrued Interest | Principal (net) | Accrued Interest | ||||||||||||||
July and August 2012 $1,060,000 Convertible Notes, 12% interest, due December 2013 and January 2014 (18 month notes), $170,000 and $170,000 outstanding , net of debt discount of $0 and $0, respectively | $ | 170,000 | $ | 54,344 | $ | 170,000 | $ | 49,313 | -1 | ||||||||
October 2013 $97,700 Convertible Note, 8% interest, due April 2014, with a 12% original issue discount, $2,700 and $2,700 outstanding, net of debt discount of $0 and $0, respectively | 2,700 | 6,766 | 2,700 | 6,713 | -2 | ||||||||||||
January 2014 $50,000 Convertible Note, 8% interest, due January 2015, $50,000 and $50,000 outstanding, net of debt discount of $0 and $3,709, respectively | 50,000 | 4,677 | 46,291 | 3,693 | -3 | ||||||||||||
January 2014 $55,500 Convertible Note, 10% interest, due October 2014, with a $5,500 original issue discount, $10,990 and $10,990 outstanding, net of debt discount of $0 and $0, respectively | 10,990 | 4,631 | 10,990 | 4,361 | -4 | ||||||||||||
February 2014 $46,080 Convertible Note, 10% interest, due February 2015, $0 and $0 outstanding, net of debt discount of $0 and $0, respectively | - | 2,358 | - | 2,358 | -5 | ||||||||||||
February 2014 $27,800 Convertible Note, 10% one-time interest, due February 2015, with a 10% original issue discount, $51,159 and $51,559 outstanding, net of debt discount of $37,011 and $46,566, respectively | 14,148 | 1,552 | 1,533 | 294 | -6 | ||||||||||||
March 2014 $50,000 Convertible Note, 10% interest, due March 2015, $36,961 and $36,961 outstanding, net of debt discount of $0 and $5,504, respectively | 36,961 | 3,795 | 31,457 | 2,886 | -7 | ||||||||||||
March 2014 $165,000 Convertible Note, 10% interest, due April 2015, with a $16,450 original issue discount, $61,301 and $84,512 outstanding, net of debt discount of $0 and $15,236, respectively | 61,301 | 16,740 | 77,521 | 14,328 | -8 | ||||||||||||
April 2014 $32,000 Convertible Note, 10% interest, due April 2015, $22,042 and $22,042 outstanding, net of debt discount of $0 and $7,710, respectively | 22,042 | 1,377 | 14,332 | 835 | -9 | ||||||||||||
April 2014 $46,080 Convertible Note, 10% interest due April 2015, $5,419 and $5,4190 outstanding, net of debt discount of $0 and $0, respectively | 5,419 | 4,741 | 5,419 | 4,608 | -10 | ||||||||||||
May 2014 $42,500 Convertible Note, 8% interest, due February 2015, $12,705 and $21,215 outstanding, net of debt discount of $0 and $15,116, respectively | 12,705 | 988 | 6,099 | 1,051 | -11 | ||||||||||||
May 2014 $55,000 Convertible Note, 12% interest, due May 2015, with a $5,000 original issue discount, $46,090 and $46,090 outstanding, net of debt discount of $10,753 and $24,315, respectively | 35,337 | 4,745 | 21,775 | 3,385 | -12 | ||||||||||||
31-Mar-15 | 31-Dec-14 | ||||||||||||||||
Principal (net) | Accrued Interest | Principal (net) | Accrued Interest | ||||||||||||||
June 2014 $37,500 Convertible Note, 8% interest, due March 2015, $37,500 and $37,500 outstanding, net of debt discount of $0 and $13,340, respectively | 37,500 | 2,390 | 27,211 | 1,652 | -13 | ||||||||||||
June 2014 $28,800 Convertible Note, 10% interest due June 2015, $28,800 and $28,800 outstanding, net of debt discount of $6,629 and $13,730, respectively | 22,171 | 3,588 | 15,070 | 2,880 | -14 | ||||||||||||
June 2014 $40,000 Convertible Note, 10% interest, due June 2015, $40,000 and $40,000 outstanding, net of debt discount of $9,535 and $19,398, respectively | 30,465 | 3,044 | 20,602 | 2,060 | -15 | ||||||||||||
June 2014 $40,000 Convertible Note, 10% interest, due June 2015, $38,689 and $38,689 outstanding, net of debt discount of $8,799 and $18,554, respectively | 29,890 | 2,944 | 20,135 | 1,993 | -16 | ||||||||||||
June 2014 $56,092 Convertible Note, 16% interest, due July 2015, with a $5,000 original issue discount, $56,092 and $56,092 outstanding, net of debt discount of $13,863 and $27,815, respectively | 42,229 | 6,719 | 28,277 | 4,512 | -17 | ||||||||||||
July 2014 $37,500 Convertible Note, 12% interest, due July 2015, $37,015 and $37,015 outstanding, net of debt discount of $11,465 and $20,737, respectively | 25,550 | 3,039 | 16,278 | 1,947 | -18 | ||||||||||||
July 2014 $37,500 Convertible Note, 8% interest, due April 2015, $37,500 and $37,500 outstanding, net of debt discount of $1,359 and $13,587, respectively | 36,141 | 2,185 | 23,913 | 1,447 | -19 | ||||||||||||
August 2014 $22,500 Convertible Note, 8% interest, due May 2015, $22,500 and $22,500 outstanding, net of debt discount of $2,817 and $9,488, respectively | 19,683 | 1,168 | 13,012 | 725 | -20 | ||||||||||||
August 2014 $36,750 Convertible Note, 10% interest, due April 2015, $36,750 and $36,750 outstanding, net of debt discount of $13,693 and $20,588, respectively | 23,057 | 2,777 | 13,995 | 1,873 | -21 | ||||||||||||
August 2014 $33,500 Convertible Note, 4% interest, due February 2015, with a $8,500 original issue discount, $33,500 and $33,500 outstanding, net of debt discount of $0 and $10,367, respectively | 33,500 | - | 23,133 | - | -22 | ||||||||||||
September 2014 $37,500 Convertible Note, 12% interest, due September 2015, with a $5,000 original issue discount, $36,263 and $36,263 outstanding, net of debt discount of $16,680 and $25,927, respectively | 19,582 | 2,306 | 10,336 | 1,236 | -23 | ||||||||||||
January 2015 $19,000 Convertible Note, 10% interest, due July 8, 2015, $19,000 and $0 outstanding, net of debt discount of $895 and $0, respectively | 18,105 | 467 | - | - | -24 | ||||||||||||
January 2015 $12,500 Convertible Note, 10% interest, due July 8, 2015, $12,500 and $0 outstanding, net of debt discount of $589 and $0, respectively | 11,911 | 307 | - | - | -25 | ||||||||||||
February 2015 $100,000 Convertible Note, 10% interest, due August 9, 2015, $100,000 and $0 outstanding, net of debt discount of $8,468 and $0, respectively | 91,532 | 2,459 | - | - | -26 | ||||||||||||
February 2015 $25,000 Convertible Note, 10% interest, due August 4, 2015, $25,000 and $0 outstanding, net of debt discount of $2,315 and $0, respectively | 22,685 | 615 | - | - | -27 | ||||||||||||
March 2015 $50,000 Convertible Note, 10% interest, due September 19, 2015, $50,000 and $0 outstanding, net of debt discount of $12,419 and $0, respectively | 37,581 | 1,230 | - | - | -28 | ||||||||||||
March 2015 $20,000 Convertible Note, 10% interest, due September 25, 2015, $20,000 and $0 outstanding, net of debt discount of $7,379 and $0, respectively | 12,621 | 492 | - | - | -29 | ||||||||||||
Total Convertible Notes Payable, Net | $ | 935,806 | $ | 142,444 | $ | 600,079 | $ | 114,150 | |||||||||
(1) The Company had received $1,060,000 in cash as of December 31, 2012 in exchange for Convertible Debt instruments. These Convertible Debt instruments have an eighteen month term, accrued interest at an annual rate of 12% and a conversion price of $0.10. In addition, the Convertible Debt instruments have an equal amount of $0.15, five year common stock warrants. During the year ending December 31, 2013, the Company entered into new notes with attached warrants with an exercise price of $0.06 per share, which triggered a reset provision of the exercise price of this note’s conversion price and the price of the warrants to $0.06. The Convertible Debt instruments also include Additional Investment Rights to enter into an additional convertible note with a corresponding amount of warrants equal to forty percent of the convertible note principal. The Company recorded a debt discount of $1,060,000 related to the conversion feature of the notes and the attached warrants, along with a derivative liability at inception. | |||||||||||||||||
During December of 2012 the holders of the Convertible Debt instruments exercised their conversion rights and converted $171,500 and $37,044 of the outstanding principal and accrued interest balances, respectively, into 2,085,440 shares of the Company’s common stock. | |||||||||||||||||
During the twelve months ending December 31, 2013 the holders of the Convertible Debt instruments exercised their conversion rights and converted $708,500 and $153,036 of the outstanding principal and accrued interest balances. | |||||||||||||||||
During the twelve months ending December 31, 2014 the holders of the Convertible Debt instruments exercised their conversion rights and converted $10,000 and $2,160 of the outstanding principal and accrued interest balances. | |||||||||||||||||
Interest expense for the amortization of the debt discounts is calculated on a straight-line basis over the eighteen month life of the Convertible Debt instruments. During 2012 total amortization was recorded in the amount of $431,154 resulting in a debt discount of $628,846 at December 31, 2012. During 2012 interest expense of $84,243 was recorded for the Convertible Debt Instruments. During the twelve months ending December 31, 2013, total amortization was recorded in the amount of $213,838 and principal of $708,500 was converted into shares of common stock resulting in a decrease to the debt discount of $404,627. After conversions and amortization, principal totaled $180,000 and debt discount totaled $8,576 at December 31, 2013. During the twelve months ending December 31, 2013 interest expense of $136,447 was recorded for the Convertible Debt Instruments. During the twelve months ending December 31, 2014, total amortization was recorded in the amount of $8,576 and principal of $10,000 and accrued interest of 2,160 was converted into shares of common stock. After conversions and amortization, principal totaled $170,000 and debt discount totaled $0 at December 31, 2014. During the three month ending March 31, 2015 and the twelve months ending December 31, 2014 interest expense of $5,031 and $20,864 was recorded for the Convertible Debt Instruments. The $170,000 balance of the notes reached maturity during the year ended December 31, 2014 and are currently in default. | |||||||||||||||||
(2) The Company borrowed $97,700 October 2013, due April 2014, with interest at 8%. The holder of the note has the right, after the first ninety days of the note (January 29, 2014), to convert the note and accrued interest into common stock at a price per share equal to 60% (representing a discount rate of 40%) of the lowest trading price for the Common Stock during the twenty trading day period ending one trading day prior to the date of Conversion Notice. The Company has the right to prepay the note and accrued interest during the first one hundred eighty days following the date of the note. During that time the amount of any prepayment during the first one hundred eighty days is 130% of the outstanding amounts owed while the amount of the prepayment increases every subsequent thirty days to 135%, 140%, 145%, and 150% of the outstanding amounts owed. The Company recorded a debt discount of $97,700 related to the conversion feature of the note, along with a derivative liability at inception. Interest expense for the amortization of the debt discounts is calculated on a straight-line basis over the eighteen month life of the note. During the twelve months ending December 31, 2013 total amortization was recorded in the amount of $32,927 resulting in a debt discount of $64,773. Also during the twelve months ending December 31, 2013, interest expense of $1,954 was recorded for the note. During the twelve months ended December 31, 2014, total amortization was recorded in the amount of $64,773. Also during the twelve months ending December 31, 2014, total principal of $95,000 was converted into shares of common stock resulting in a decrease to the debt discount of $0. After conversions and amortization, principal totaled $2,700, debt discount totaled $0, and accumulated interest totaled $6,713.12 at December 31, 2014. During the three months ended March 31, 2015 the Company accrued $53 additional interest on the note. The balance of the note reached maturity during the year ended December 31, 2014 and is currently in default. | |||||||||||||||||
(3) The Company borrowed $50,000 January 2014, due January 2015, with interest at 8%. The holder of the note has the right, after the first one hundred eighty days of the note (July 27, 2014), to convert the note and accrued interest into common stock at a price per share equal to the lesser of $0.09 or 58% of the lowest trade price in the 10 trading days previous to the conversion. The Company recorded a debt discount of $50,000 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ended December 31, 2014, total amortization was recorded in the amount of $46,291. After amortization, principal totaled $50,000, debt discount totaled $3,709, and accumulated interest totaled $3,693 at December 31, 2014. During the three months ended March 31, 2015, total amortization was recorded in the amount of $50,000. After amortization, principal totaled $50,000, debt discount totaled $0. The Company accrued an additional $984 interest for the three months ended March 31, 2015. The balance of the note reached full maturity during the quarter ended March 31, 2015 and is currently in default. | |||||||||||||||||
(4) The Company borrowed $55,500 January 2014, due October 2014, with interest at 10%. The holder of the note has the right, after the first one hundred eighty days of the note (July 23, 2014), to convert the note and accrued interest into common stock at a price per share equal to the lesser of $0.28 or 60% of the lowest trade price in the 25 trading days previous to the conversion. The note has an original issue discount of $5,500 which has been added to the principal balance of the note and is being recognized in interest expense over the life of the note. The Company recorded a debt discount of $55,000 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ended December 31, 2014, total amortization was recorded in the amount of $52,065. Also during the twelve months ending December 31, 2014, total principal of $44,510 was converted into shares of common stock, resulting in a decrease to the debt discount of $7,565. After conversions and amortization, principal totaled $10,990, debt discount totaled $0, and accumulated interest totaled $4,361 at December 31, 2014. The Company accrued an additional $270 interest for the three months ended March 31, 2015. The balance of the note reached maturity during the year ended December 31, 2014, and is currently in default. | |||||||||||||||||
(5) The Company borrowed $46,080 February 2014, due February 2015, with a one-time interest charge of 10%. The holder of the note has the right, after the first one hundred eighty days of the note (August 10, 2014), to convert the note and accrued interest into common stock at a price per share equal to the lesser of $0.08 or 60% of the lowest trade price in the 25 trading days previous to the conversion. The Company has the right to prepay the note during the first ninety days following the date of the note. The Company recorded a debt discount of $46,080 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ended December 31, 2014, Total amortization was recorded in the amount of $26,503. Also during the twelve months ending December 31, 2014, total principal of $46,080 and accrued interest of $2,250 was converted into shares of common stock, resulting in a decrease to the debt discount of $19,577. After conversions and amortization, principal totaled $0, debt discount totaled $0, and accumulated interest totaled $2,358 at March 31, 2015 and December 31, 2014. The balance of the note reached full maturity during the quarter ended March 31, 2015 and is currently in default. | |||||||||||||||||
(6) The Company borrowed $27,800 February 2014, due February 2015, with a one-time interest charge of 10%. The holder of the note has the right to convert the note and accrued interest into common stock at a price per share equal to the lesser of $0.195 or 60% of the lowest trade price in the 25 trading days previous to the conversion. The note has an original issue discount of $2,800 which has been added to the principal balance of the note and is being recognized in interest expense over the life of the note. Additionally, the holder of the note added a market price adjustment of $53,192 on the note due to delay in issuance of conversion shares. The Company increased the amount of the note by $53,192 and recorded a debt discount of $53,192. Interest expense for the amortization of the debt discounts is calculated on a straight-line basis over the nine month life of the note. During the twelve months ending December 31, 2014, total amortization was recorded in the amount of $22,056. Also during the twelve months ending December 31, 2014, total principal of $29,833 and accrued interest of $2,780 was converted into shares of common stock, resulting in a decrease to the debt discount of $506. After conversions and amortization, principal totaled $51,159, debt discount totaled $49,626, and accumulated interest totaled $294 at December 31, 2014. During the three months ending March 31, 2015, total amortization was recorded in the amount of $12,615 and an additional $1,258 of interest was accrued. The balance of the note reached full maturity during the quarter ended March 31, 2015 and is currently in default. | |||||||||||||||||
(7) The Company borrowed $50,000 March 2014, due March 2015, with interest at 10%. The holder of the note has the right, after the first one hundred eighty days of the note (September 18, 2014), to convert the note and accrued interest into common stock at a price per share equal to 60% of the lowest trade price in the 25 trading days previous to the conversion. The Company recorded a debt discount of $50,000 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ended December 31, 2014, total amortization was recorded in the amount of $39,042. Also during the twelve months ending December 31, 2014, total principal of $13,039 and accrued interest of $727 was converted into shares of common stock, resulting in a decrease to the debt discount of $5,454. After conversions and amortization, principal totaled $36,961, debt discount totaled $5,504, and accumulated interest totaled $2,886 at December 31, 2014. During the three months ending March 31, 2015, total amortization was recorded in the amount of $5,504 and an additional $909 of interest was accrued. The balance of the note reached full maturity during the quarter ended March 31, 2015 and is currently in default. | |||||||||||||||||
(8) The Company borrowed $165,000 March 2014, due April 2015, with interest at 10%. The holder of the note has the right to convert the note and accrued interest into common stock at a price per share equal to the lesser of $1.00 or 65% of the average of the three lowest trading prices in the 20 trading days previous to the conversion. The note has an original issue discount of $15,000 which has been added to the principal balance of the note and is being recognized in interest expense over the life of the note. The Company recorded a debt discount of $165,000 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ended December 31, 2014, total amortization was recorded in the amount of $120,417. Also during the twelve months ending December 31, 2014, total principal of $80,488 was converted into shares of common stock, resulting in a decrease to the debt discount of $37,592. After conversions and amortization, principal totaled $84,512, debt discount totaled $6,991, and accumulated interest totaled $14,328 at December 31, 2014. During the three months ending March 31, 2015, total principal of $23,211 was converted into shares of common stock, resulting in a decrease to the debt discount of $6,991. After conversions and amortization, principal totaled $61,301, debt discount totaled $0, and accumulated interest totaled $16,740 at March 31, 2015. | |||||||||||||||||
(9) The Company borrowed $32,000 April 2014, due April 2015, with interest at 10%. The holder of the note has the right, after the first one hundred eighty days of the note (October 1, 2014), to convert the note and accrued interest into common stock at a price per share equal to 60% of the lowest trade price in the 25 trading days previous to the conversion. The Company recorded a debt discount of $32,000 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ended December 31, 2014, total amortization was recorded in the amount of $21,216. Also during the twelve months ending December 31, 2014, total principal of $9,958 and accrued interest of $681 was converted into shares of common stock, resulting in a decrease to the debt discount of $3,074. After conversions and amortization, principal totaled $22,042, debt discount totaled $7,710, and accumulated interest totaled $835 at December 31, 2014. During the three months ending March 31, 2015, total amortization was recorded in the amount of $7,710 and an additional $542 of interest was accrued. | |||||||||||||||||
(10) The Company borrowed $46,080 April 2014, due April 2015, with interest at 10%. The holder of the note has the right, after the first one hundred eighty days of the note (October 11, 2014), to convert the note and accrued interest into common stock at a price per share equal to the lesser of $0.08 or 60% of the lowest trade price in the 25 trading days previous to the conversion. The Company has the right to prepay the note during the first ninety days following the date of the note. The Company recorded a debt discount of $46,080 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ended December 31, 2014, total amortization was recorded in the amount of $30,094. Also during the twelve months ending December 31, 2014, total principal of $40,661 was converted into shares of common stock, resulting in a decrease to the debt discount of $15,986. After conversions and amortization, principal totaled $5,419, debt discount totaled $0, and accumulated interest totaled $4,608 at December 31, 2014. During the three months ending March 31, 2015, an additional $133 of interest was accrued. | |||||||||||||||||
(11) The Company borrowed $42,500 May 2014, due February 2015, with interest at 8%. The holder of the note has the right, after the first one hundred eighty days of the note (November 16, 2014), to convert the note and accrued interest into common stock at a price per share equal to 61% (representing a discount rate of 39%) of the average of the lowest five trading prices for the Common Stock during the ten trading day period ending one trading day prior to the date of Conversion Notice. The Company has the right to prepay the note and accrued interest during the first one hundred eighty days following the date of the note. During that time the amount of any prepayment during the first sixty days is 130% of the outstanding amounts owed while the amount of the prepayment increases every subsequent thirty days to 135%, 140%, 145%, and 150% of the outstanding amounts owed. The Company recorded a debt discount of $42,500 related to the conversion feature of the note, along with a derivative liability at inception. Additionally, the note holder assed a $14,890 penalty due to the inability of the Company to provide conversion shares timely. The Company increased the amount of the note by $14,890 and recorded a debt discount of $14,890. Interest expense for the amortization of the debt discounts is calculated on a straight-line basis over the nine month life of the note. During the twelve months ending December 31, 2014, total amortization was recorded in the amount of $32,535. Also during the twelve months ending December 31, 2014, total principal of $36,175 was converted into shares of common stock resulting in a decrease to the debt discount of $9,739. After conversions and amortization, principal totaled $21,215, debt discount totaled $15,116, and accumulated interest totaled $1,051 at December 31, 2014. During the three months ending March 31, 2015, total principal of $8,510 was converted into shares of common stock resulting in a decrease to the debt discount of $15,116. After conversions and amortization, principal totaled $12,705, debt discount totaled $0, and accumulated interest totaled $988 at March 31, 2015. The balance of the note reached full maturity during the quarter ended March 31, 2015 and is currently in default. | |||||||||||||||||
(12) The Company borrowed $55,000 May 2014, due May 2015, with interest at 12%. The holder of the note has the right to convert the note and accrued interest into common stock at a price per share equal to the lesser of $0.03 or 55% of the lowest trade price in the 25 trading days previous to the conversion. The note has an original issue discount of $5,000 which has been added to the principal balance of the note and is being recognized in interest expense over the life of the note. The Company recorded a debt discount of $55,000 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ended December 31, 2014, total amortization was recorded in the amount of $30,685. Also during the twelve months ending December 31, 2014, total principal of $8,910 was converted into shares of common stock, resulting in a decrease to the debt discount of $0. After conversions and amortization, principal totaled $46,090, debt discount totaled $24,315, and accumulated interest totaled $3,385 at December 31, 2014. During the three months ending March 31, 2015, total amortization was recorded in the amount of $13,562 and an additional $1,360 of interest was accrued. | |||||||||||||||||
(13) The Company borrowed $37,500 June 2014, due March 2015, with interest at 8%. The holder of the note has the right, after the first one hundred eighty days of the note (December 10, 2014), to convert the note and accrued interest into common stock at a price per share equal to 61% (representing a discount rate of 39%) of the average of the lowest five trading prices for the Common Stock during the ten trading day period ending one trading day prior to the date of Conversion Notice. The Company has the right to prepay the note and accrued interest during the first one hundred eighty days following the date of the note. During that time the amount of any prepayment during the first sixty days is 130% of the outstanding amounts owed while the amount of the prepayment increases every subsequent thirty days to 135%, 140%, 145%, and 150% of the outstanding amounts owed. The Company recorded a debt discount of $37,500 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ended December 31, 2014, total amortization was recorded in the amount of $27,211. After amortization, principal totaled $37,500, debt discount totaled $10,289, and accumulated interest totaled $1,652 at December 31, 2014. During the three months ending March 31, 2015, total amortization was recorded in the amount of $10,289 and an additional $738 of interest was accrued. The balance of the note reached full maturity during the quarter ended March 31, 2015 and is currently in default. | |||||||||||||||||
(14) The Company borrowed $28,800 June 2014, due June 2015, with interest at 10%. The holder of the note has the right, after the first one hundred eighty days of the note (December 20, 2014), to convert the note and accrued interest into common stock at a price per share equal to the lesser of $0.08 or 60% of the lowest trade price in the 25 trading days previous to the conversion. The Company has the right to prepay the note during the first ninety days following the date of the note. The Company recorded a debt discount of $28,800 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ended December 31, 2014, total amortization was recorded in the amount of $15,070. After amortization, principal totaled $28,800, debt discount totaled $13,730, and accumulated interest totaled $2,880 at December 31, 2014. During the three months ending March 31, 2015, total amortization was recorded in the amount of $7,101 and an additional $708 of interest was accrued. | |||||||||||||||||
(15) The Company borrowed $40,000 June 2014, due June 2015, with interest at 10%. The holder of the note has the right, after the first one hundred eighty days of the note (December 23, 2014), to convert the note and accrued interest into common stock at a price per share equal to 60% of the lowest trade price in the 25 trading days previous to the conversion. The Company has the right to prepay the note and accrued interest during the first one hundred eighty days following the date of the note. During that time the amount of the prepayment is 145% of the outstanding amounts owed. The Company recorded a debt discount of $40,000 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ended December 31, 2014, total amortization was recorded in the amount of $20,602. After amortization, principal totaled $40,000, debt discount totaled $19,398, and accumulated interest totaled $2,060 at December 31, 2014. During the three months ending March 31, 2015, total amortization was recorded in the amount of $9,863 and an additional $984 of interest was accrued. | |||||||||||||||||
(16) The Company borrowed $40,000 June 2014, due June 2015, with interest at 10%. The holder of the note has the right, after the first one hundred eighty days of the note (December 23, 2014), to convert the note and accrued interest into common stock at a price per share equal to 60% of the lowest trade price in the 25 trading days previous to the conversion. The Company has the right to prepay the note and accured interest during the first one hundred eighty days following the date of the note. During that time the amount of any repayment is 145% of the outstanding amounts owed. . The Company recorded a debt discount of $40,000 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ended December 31, 2014, total amortization was recorded in the amount of $20,814. Also during the twelve months ending December 31, 2014, total principal of $1,311 was converted into shares of common stock, resulting in a decrease to the debt discount of $632. After conversions and amortization, principal totaled $38,689, debt discount totaled $18,554, and accumulated interest totaled $1,993 at December 31, 2014. During the three months ending March 31, 2015, total amortization was recorded in the amount of $9,755 and an additional $951 of interest was accrued. | |||||||||||||||||
(17) The Company borrowed $56,092 July 2014, due July 2015, with interest at 16%. The holder of the note has the right to convert the note and accrued interest into common stock at a price per share equal to the lesser of $1.00 or 65% of the average of the three lowest trading prices in the 20 trading days previous to the conversion. The note has an original issue discount of $5,000 which has been added to the principal balance of the note and is being recognized in interest expense over the life of the note. The Company recorded a debt discount of $51,092 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ended December 31, 2014, total amortization was recorded in the amount of $28,276. After amortization, principal totaled $56,092, debt discount totaled $27,815, and accumulated interest totaled $4,512 at December 31, 2014. During the three months ending March 31, 2015, total amortization was recorded in the amount of $13,953 and an additional $2,207 of interest was accrued. | |||||||||||||||||
(18) The Company borrowed $37,500 July 2014, due July 2015, with interest at 12%. The holder of the note has the right to convert the note and accrued interest into common stock at a price per share equal to 50% of the lowest of the lowest trading price in the 15 trading days previous to the conversion. The Company recorded a debt discount of $37,500 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ended December 31, 2014, total amortization was recorded in the amount of $16,483. Also during the twelve months ending December 31, 2014, total principal of $485 was converted into shares of common stock (see Note 13: Stockholders’ Equity), resulting in a decrease to the debt discount of $280. After conversions and amortization, principal totaled $37,015, debt discount totaled $20,737, and accumulated interest totaled $1,947 at December 31, 2014. During the three months ending March 31, 2015, total amortization was recorded in the amount of $9,272 and an additional $1,092 of interest was accrued. | |||||||||||||||||
(19) The Company borrowed $37,500 July 2014, due April 2015, with interest at 8%. The holder of the note has the right, after the first one hundred eighty days of the note (January 5, 2015), to convert the note and accrued interest into common stock at a price per share equal to 61% (representing a discount rate of 39%) of the average of the lowest five trading prices for the Common Stock during the ten trading day period ending one trading day prior to the date of Conversion Notice. The Company has the right to prepay the note and accrued interest during the first one hundred eighty days following the date of the note. During that time the amount of any prepayment during the first sixty days is 130% of the outstanding amounts owed while the amount of the prepayment increases every subsequent thirty days to 135%, 140%, 145%, and 150% of the outstanding amounts owed. The Company recorded a debt discount of $37,500 related to the conversion feature, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ended December 31, 2014, total amortization was recorded in the amount of $23,913. After amortization, principal totaled $37,500, debt discount totaled $13,587, and accumulated interest totaled $1,447 at December 31, 2014. During the three months ending March 31, 2015, total amortization was recorded in the amount of $12,228 and an additional $738 of interest was accrued. | |||||||||||||||||
(20) The Company borrowed $22,500 August 2014, due August 2015, with interest at 8%. The holder of the note has the right, after the first one hundred eighty days of the note (February 2, 2014), to convert the note and accrued interest into common stock at a price per share equal to 61% (representing a discount rate of 39%) of the average of the lowest five trading prices for the Common Stock during the ten trading day period ending one trading day prior to the date of Conversion Notice. The Company has the right to prepay the note and accrued interest during the first one hundred eighty days following the date of the note. During that time the amount of any prepayment during the first sixty days is 130% of the outstanding amounts owed while the amount of the prepayment increases every subsequent thirty days to 135%, 140%, 145%, and 150% of the outstanding amounts owed. The Company recorded a debt discount of $20,384 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ended December 31, 2014, total amortization was recorded in the amount of $10,896. After amortization, principal totaled $22,500, debt discount totaled $9,488, and accumulated interest totaled $725 at December 31, 2014. During the three months ending March 31, 2015, total amortization was recorded in the amount of $6,671 and an additional $443 of interest was accrued. | |||||||||||||||||
(21) The Company borrowed $36,750 August 2014, due August 2015, with interest at 10%. The holder of the note has the right, after the first one hundred eighty days of the note (February 10, 2014), to convert the note and accrued interest into common stock at a price per share equal to 60% (representing a discount rate of 40%) of the lowest trading price for the Common Stock during the twenty five trading day period ending one trading day including the date of Conversion Notice. The Company has the right to prepay the note and accrued interest during the first one hundred eighty days following the date of the note. During that time the amount of any prepayment is 145% of the outstanding amounts owed. The Company recorded a debt discount of $36,750 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ended December 31, 2014, total amortization was recorded in the amount of $13,995. After amortization, principal totaled $36,750, debt discount totaled $22,755, and accumulated interest totaled $1,873 at December 31, 2014. During the three months ending March 31, 2015, total amortization was recorded in the amount of $9,062 and an additional $904 of interest was accrued. | |||||||||||||||||
(22) The Company borrowed $33,500 August 2014, due February 2015, with interest at 4%. The Company may prepay the note for a net payment of $33,500 at any time prior to November 27, 2014. After November 27, 2014, the holder has the right to refuse any further payments and to convert this note when it matures, February 27, 2015. The holder of the note has the right to convert the note and accrued interest into common stock at a price per share equal to 60% (represents a 40% discount) of the average three lowest trade prices in the 20 trading days previous to the conversion. The note has an original issue discount of $6,500 which has been added to the principal balance of the note and is being recognized in interest expense over the life of the note. The Company recorded a debt discount of $32,807 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ended December 31, 2014, total amortization was recorded in the amount of $22,520. After amortization, principal totaled $33,500, debt discount totaled $10,367, and accumulated interest totaled $0 at December 31, 2014. During the three months ending March 31, 2015, total amortization was recorded in the amount of $10,367. The balance of the note reached full maturity during the quarter ended March 31, 2015 and is currently in default. | |||||||||||||||||
(23) The Company borrowed $37,500 September 2014, due September 2015, with interest at 12%. The holder of the note has the right to convert the note and accrued interest into common stock at a price per share equal to 55% (represents a 45% discount) of the lowest trade prices in the 15 trading days previous to the conversion. The note has an original issue discount of $5,000 which has been added to the principal balance of the note and is being recognized in interest expense over the life of the note. The Company recorded a debt discount of $37,500 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ended December 31, 2014, total amortization was recorded in the amount of $10,685. Also during the twelve months ending December 31, 2014, total principal of $1,238 was converted into shares of common stock resulting in a decrease to the debt discount of $888. After conversions and amortization, principal totaled $36,262, debt discount totaled $25,927, and accumulated interest totaled $1,236 at December 31, 2014. During the three months ending March 31, 2015, total amortization was recorded in the amount of $9,247 and an additional $1,070 of interest was accrued. | |||||||||||||||||
(24) The Company borrowed $19,000 January 2015, due July 2015, with interest at 10%. The holder of the note has the right to convert the note and accrued interest into common stock at the end of the six months (July 8, 2015) at a price per share of $0.001. The Company issued the note holder 3,800,000, $0.001, one year warrants as a loan origination fee. The Company recorded a debt discount of $1,628 related to the warrants issued as a loan origination fee, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the three months ending March 31, 2015 total amortization in the amount of $733 and accrued interest in the amount of $467 was recorded towards this note. | |||||||||||||||||
(25) The Company borrowed $12,500 January 2015, due July 2015, with interest at 10%. The holder of the note has the right to convert the note and accrued interest into common stock at the end of the six months (July 8, 2015) at a price per share of $0.001. The Company issued the note holder 2,500,000, $0.001, one year warrants as a loan origination fee. The Company recorded a debt discount of $1,071 related to the warrants issued as a loan origination fee, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the three months ending March 31, 2015 total amortization in the amount of $482 and accrued interest in the amount of $307 was recorded towards this note. | |||||||||||||||||
(26) The Company borrowed $100,000 February 2015, due August 2015, with interest at 10%. The holder of the note has the right to convert the note and accrued interest into common stock at the end of the six months (August 9, 2015) at a price per share of $0.001. The Company issued the note holder 20,000,000, $0.001, one year warrants as a loan origination fee. The Company recorded a debt discount of $11,635 related to the warrants issued as a loan origination fee, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the three months ending March 31, 2015 total amortization in the amount of $3,167 and accrued interestion the amount of $2,459 was accrued towards this note. | |||||||||||||||||
(27) The Company borrowed $25,000 February 2015, due August 2015, with interest at 10%. The holder of the note has the right to convert the note and accrued interest into common stock at the end of the six months (August 4, 2015) at a price per share of $0.001. The Company issued the note holder 5,000,000, $0.001, one year warrants as a loan origination fee. The Company recorded a debt discount of $1,991 related to the warrants issued as a loan origination fee, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the three months ending March 31, 2015 total amortization in the amount of $597 and accrued interest in the amount of $615 was recorded towards this note. | |||||||||||||||||
(28) The Company borrowed $50,000 March 2015, due September 2015, with interest at 10%. The holder of the note has the right to convert the note and accrued interest into common stock at the end of the six months (September 19, 2015) at a price per share of $0.001. The Company issued the note holder 10,000,000, $0.0015, one year warrants as a loan origination fee. The Company recorded a debt discount of $13,213 related to the warrants issued as a loan origination fee, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the three months ending March 31, 2015 total amortization in the amount of $794 and accrued interest in the amount of $1,230 was recorded towards this note. | |||||||||||||||||
(29) The Company borrowed $20,000 March 2015, due September 2015, with interest at 10%. The holder of the note has the right to convert the note and accrued interest into common stock at the end of the six months (September 25, 2015) at a price per share of $0.0022. The Company issued the note holder 4,000,000, $0.0022, one year warrants as a loan origination fee. The Company recorded a debt discount of $7,586 related to the warrants issued as a loan origination fee, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the three months ending March 31, 2015 total amortization in the amount of $207 and accrued interest in the amount of $492 was recorded towards this note. |
9_COMMON_STOCK_OPTIONS_AND_WAR
9. COMMON STOCK OPTIONS AND WARRANTS | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||
9. COMMON STOCK OPTIONS AND WARRANTS | The Company recognizes in the financial statements compensation related to all stock-based awards, including stock options and warrants, based on their estimated grant-date fair value. The Company has estimated expected forfeitures and is recognizing compensation expense only for those awards expected to vest. All compensation is recognized by the time the award vests. | ||||||||||||||||||||
The following schedule summarizes the changes in the Company’s stock options during the three months ended March 31, 2015: | |||||||||||||||||||||
Weighted | Weighted | ||||||||||||||||||||
Options Outstanding | Average | Average | |||||||||||||||||||
Number | Exercise | Remaining | Aggregate | Exercise | |||||||||||||||||
Of | Price | Contractual | Intrinsic | Price | |||||||||||||||||
Shares | Per Share | Life | Value | Per Share | |||||||||||||||||
Balance at December 31, 2014 | 8,785,000 | $ | 0.09-0.15 | 3.42 years | $ | - | $ | 0.14 | |||||||||||||
Options granted | - | $ | - | - | $ | - | |||||||||||||||
Options exercised | - | $ | - | - | $ | - | |||||||||||||||
Options expired | (1,950,000 | ) | $ | 0.09 | - | $ | 0.09 | ||||||||||||||
Balance at March 31, 2015 | 6,835,000 | $ | 0.12-0.15 | 4.09 years | $ | - | $ | 0.15 | |||||||||||||
Exercisable at December 31, 2014 | 7,713,125 | $ | 0.09-0.15 | 3.42 years | $ | - | $ | 0.14 | |||||||||||||
Exercisable at March 31, 2015 | 6,835,000 | $ | 0.12-0.15 | 4.09 years | $ | - | $ | 0.15 | |||||||||||||
The following schedule summarizes the changes in the Company’s stock warrants during the three months ended March 31, 2015: | |||||||||||||||||||||
Weighted | Weighted | ||||||||||||||||||||
Warrants Outstanding | Average | Average | |||||||||||||||||||
Number | Exercise | Remaining | Aggregate | Exercise | |||||||||||||||||
Of | Price | Contractual | Intrinsic | Price | |||||||||||||||||
Shares | Per Share | Life | Value | Per Share | |||||||||||||||||
Balance at December 31, 2014 | 2,310,770,115 | $ | 0.0001-0.25 | 2.86 years | $ | - | $ | 0.01 | |||||||||||||
Warrants granted | 45,300,000 | $ | 0.001-0.0022 | .87 years | $ | 0.012 | |||||||||||||||
Warrants exercised | (130,275,550 | ) | $ | 0.003 | - | $ | 0.003 | ||||||||||||||
Warrants expired | (5,750,000 | ) | $ | 0.06-0.175 | - | $ | 0.06-0.175 | ||||||||||||||
Balance at March 31, 2015 | 2,220,044,565 | $ | 0.01-0.25 | 2.76 years | $ | 19,972,343 | $ | 0.008 | |||||||||||||
Exercisable at December 31, 2014 | 1,978,455,471 | $ | 0.0001-0.25 | 2.86 years | $ | - | $ | 0.01 | |||||||||||||
Exercisable at March 31, 2015 | 2,220,044,565 | $ | 0.001-0.25 | 2.76 years | $ | 19,972,343 | $ | 0.008 |
10_STOCKHOLDERS_EQUITY
10. STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2015 | |
Equity [Abstract] | |
NOTE 10. STOCKHOLDERS' EQUITY | Common Stock Issued for Cash and the Exercise of Warrants |
In February 2015, the Company issued 66,000,000 shares of common stock for cashless warrants exercise. | |
In March 2015, the Company issued 25,000,000 shares of common stock for cashless warrants exercise. | |
Common Stock Issued for Convertible Debt | |
The Company authorized 1,539,221 shares (which were not actually issued due to the lack of availability of authorized shares, but will be issued once shares are available) of its common stock and a convertible promissory note in the amount of $26,000 with interest payable at 10% per annum in January 2015 to our major stockholder, who is also a Director. The Note matures in January of 2016. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.001 per share. The value of the $26,000 debt plus the $0.0004 fair market value of the 1,539,221 shares at the date of the agreement was prorated to arrive at the allocation of the original $26,000 debt and the value of the 1,539,221 shares and the beneficial conversion feature. The computation resulted in an allocation of $25,399 toward the debt and $601 to the shares and $0 to the beneficial conversion feature. The $601 value of the shares and the $0 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $125 has been accrued and added to the note payable bringing the total debt balance related to this convertible promissory note to $25,524 as of March 31, 2015. Additionally, $542 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the three months ending March 31, 2015. | |
The Company authorized 1,000,000 shares (which were not actually issued due to the lack of availability of authorized shares, but will be issued once shares are available) of its common stock and a convertible promissory note in the amount of $25,000 with interest payable at 10% per annum in February 2015 to our major stockholder, who is also a Director. The Note matures in February of 2016. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.001 per share. The value of the $25,000 debt plus the $0.0007 fair market value of the 1,000,000 shares at the date of the agreement was prorated to arrive at the allocation of the original $25,000 debt and the value of the 1,000,000 shares and the beneficial conversion feature. The computation resulted in an allocation of $24,319 toward the debt and $681 to the shares and $0 to the beneficial conversion feature. The $681 value of the shares and the $0 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $85 has been accrued and added to the note payable bringing the total debt balance related to this convertible promissory note to $24,404 as of March 31, 2015. Additionally, $313 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the three months ending March 31, 2015. | |
The Company authorized 1,040,000 shares (which were not actually issued due to the lack of availability of authorized shares, but will be issued once shares are available) of its common stock and a convertible promissory note in the amount of $26,000 with interest payable at 10% per annum in February 2015 to our major stockholder, who is also a Director. The Note matures in February of 2016. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.0008 per share. The value of the $26,000 debt plus the $0.0008 fair market value of the 1,040,000 shares at the date of the agreement was prorated to arrive at the allocation of the original $26,000 debt and the value of the 1,400,000 shares and the beneficial conversion feature. The computation resulted in an allocation of $25,194 toward the debt and $806 to the shares and $0 to the beneficial conversion feature. The $806 value of the shares and the $0 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $100 has been accrued and added to the note payable bringing the total debt balance related to this convertible promissory note to $25,294 as of March 31, 2015. Additionally, $325 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the three months ending March 31, 2015. | |
Common Stock Issued for Debt Converted | |
During the three months ending March 31, 2015 the Company issued 92,051,568 shares of unrestricted stock in exchange for convertible debt raised in 2014 resulting in a reduction in debt of $31,721, a reduction in derivative liability of $80,052 with an offset of $3,035 to debt discount and a $3,574 gain on extinguishment of debt. |
11_SUPPLEMENTAL_CASH_FLOW_INFO
11. SUPPLEMENTAL CASH FLOW INFORMATION | 3 Months Ended |
Mar. 31, 2015 | |
Supplemental Cash Flow Elements [Abstract] | |
NOTE 11. SUPPLEMENTAL CASH FLOW INFORMATION | During the three months ended March 31, 2014 the Company issued 100,000 shares of common stock for an extinguishment of $7,500 worth of debt. |
During the three months ended March 31, 2014 the Company issued 210,400 shares of common stock as a loan fee of $53,604. | |
During the three months ended March 31, 2014, the Company issued 6,851,676 shares of stock to settle convertible notes payable with a principal note balance, accrued interest, interest expense, debt discount, and derivative liabilities valued at $450,202 and the Company recognized a $32,630 loss on extinguishment of debt. | |
During the three months ended March 31, 2014, the Company increased additional paid in capital and increased debt discount for $94,500 for a beneficial conversion feature on a convertible note. | |
During the three months ended March 31, 2014, the Company Decreased related party convertible notes by $2,088 and decreased convertible notes payable by $38,045 and increased additional paid in capital by $40,133 and increased common stock by $3,579 due to authorization of 3,579,220 shares and warrants issued in conjunction with convertible notes for the debt discount. | |
During the three months ended March 31, 2015, the Company issued 176,835,519 shares of stock to settle convertible notes payable with a principal note balance, accrued interest, interest expense, debt discount, and derivative liabilities valued at $2,147,388 and the Company recognized a $120,024 loss on settlement of debt. | |
During the three months ended March 31, 2015 the Company authorized 3,579,221 shares of common stock, but did not issue them due to a lack of sufficient authorized shares, which resulted in a decrease to additional paid in capital and an increase to a liability for lack of authorized shares for a total of $2,761,627. | |
During the three months ended March 31, 2015, the Company issued 92,051,568 shares of stock to settle convertible notes payable with a principal note balance, accrued interest, interest expense, debt discount, and derivative liabilities valued at $109,813 and the Company recognized a $2,083 gain on extinguishment of debt. |
12_SUBSEQUENT_EVENTS
12. SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2015 | |
Subsequent Events [Abstract] | |
NOTE 12. SUBSEQUENT EVENTS | In April 2015 the Company received $26,500 in exchange for a convertible 10%, one year note. The note plus interest is convertible at the option of the note holder into common stock shares at $0.003 per share. In addition the Company issued the note holder 353,333 shares of its common stock as a loan origination fee. These shares for the loan origination fees have not been issued due to the lack of availability of authorized shares, but will be issued once shares are available. |
In April 2015 the Company received a $50,000 loan, the terms of which are still being determined. | |
In April 2015 the Company received $10,000 in exchange for a convertible 10%, six month note. The note plus interest is convertible at the option of the note holder into common stock shares at $0.001 per share. In addition the Company issued the note holder 400,000 shares of its common stock as a loan origination fee. These shares for the loan origination fees have not been issued due to the lack of availability of authorized shares, but will be issued once shares are available. | |
In April 2015 the Company received $25,000 in exchange for a convertible 10%, six month note. The note plus interest is convertible at the option of the note holder into common stock share at $0.001 per share. In addition the Company issued the note holder 1,000,000 shares of its common stock as a loan origination fee. These shares for the loan origination fees have not been issued due to the lack of availability of authorized shares, but will be issued once shares are available. | |
In May 2015 the Company issued 83,500,000 shares of unrestricted stock in exchange for warrants related to convertible debt raised in 2013 and 2014. | |
The Company has evaluated subsequent events pursuant to ASC Topic 855 and has determined that there are no additional subsequent events to disclose. |
1_BASIS_OF_PRESENTATION_AND_SI1
1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Basis Of Presentation And Significant Accounting Policies Policies | |||||||||||||||||
Use of Estimates | The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments, requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of March 31, 2015 and December 31, 2014, the balances reported for cash, prepaid expenses, accounts receivable, accounts payable, and accrued expenses, approximate the fair value because of their short maturities. | ||||||||||||||||
The Company adopted ASC Topic 820 (originally issued as SFAS 157, “Fair Value Measurements”) as of January 1, 2008 for financial instruments measured as fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States and expands disclosures about fair value measurements. | |||||||||||||||||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include: | |||||||||||||||||
Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; | |||||||||||||||||
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and | |||||||||||||||||
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. | |||||||||||||||||
The Company measures certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis were calculated using the Black-Scholes pricing model and are as follows at March 31, 2015: | |||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets | |||||||||||||||||
Total Assets Measured at Fair Value | $ | - | $ | - | $ | - | $ | - | |||||||||
Liabilities | |||||||||||||||||
Derivative Liability | $ | 9,190,076 | $ | - | $ | - | $ | 9,190,076 | |||||||||
Total Liabilities Measured at Fair Value | $ | 9,190,076 | $ | - | $ | - | $ | 9,190,076 | |||||||||
Recent Accounting Pronouncements | There are no recently issued accounting pronouncements that the Company believes are applicable or would have a material impact on the financial statements of the Company. |
1_BASIS_OF_PRESENTATION_AND_SI2
1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Basis Of Presentation And Significant Accounting Policies Tables | |||||||||||||||||
Schedule of fair value of financial instruments | Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets | |||||||||||||||||
Total Assets Measured at Fair Value | $ | - | $ | - | $ | - | $ | - | |||||||||
Liabilities | |||||||||||||||||
Derivative Liability | $ | 9,190,076 | $ | - | $ | - | $ | 9,190,076 | |||||||||
Total Liabilities Measured at Fair Value | $ | 9,190,076 | $ | - | $ | - | $ | 9,190,076 |
3_FIXED_ASSETS_Tables
3. FIXED ASSETS (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Fixed Assets Tables | |||||||||
Fixed assets | 31-Mar-15 | 31-Dec-14 | |||||||
Production equipment | $ | 2,131,377 | $ | 2,131,377 | |||||
Building | 446,772 | 446,772 | |||||||
Leasehold improvements | 3,235 | 3,235 | |||||||
Office equipment | 32,769 | 32,769 | |||||||
2,614,153 | 2,614,153 | ||||||||
Less accumulated depreciation | (2,606,730 | ) | (2,605,400 | ) | |||||
$ | 7,423 | $ | 8,753 | ||||||
Accumulated depreciation related to fixed assets | 31-Mar-15 | 31-Dec-14 | |||||||
Production equipment | $ | 2,124,370 | $ | 2,123,462 | |||||
Building | 446,772 | 446,772 | |||||||
Leasehold improvements | 3,235 | 3,235 | |||||||
Office equipment | 32,353 | 31,931 | |||||||
$ | 2,606,730 | $ | 2,605,400 |
4_INTANGIBLE_ASSETS_Tables
4. INTANGIBLE ASSETS (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Intangible Assets Tables | |||||||||
INTANGIBLE ASSETS | March 31, 2015 | 31-Dec-14 | |||||||
License Fee | $ | 112,500 | $ | 112,500 | |||||
Less accumulated amortization | (112,500 | ) | (111,161 | ) | |||||
- | 1,339 | ||||||||
Patents and intellectual property | 35,482 | 35,482 | |||||||
Intangible assets net of accumulated amortization | $ | 35,482 | $ | 36,821 |
5_RELATED_PARTY_TRANSACTIONS_T
5. RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Related Party Transactions Tables | |||||||||
RELATED PARTY TRANSACTIONS | |||||||||
Three months ended March 31, 2015 | Three months ended March 31, 2014 | ||||||||
Office and warehouse lease effective August 1, 2007 | |||||||||
Monthly rental payments | $ | - | $ | 147,613 | |||||
Corporate office | 4,500 | 18,000 | |||||||
Total Rental Expense | $ | 4,500 | $ | 165,613 |
8_CONVERTIBLE_NOTES_PAYABLE_Ta
8. CONVERTIBLE NOTES PAYABLE (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||
Convertible notes outstanding | |||||||||||||||||
31-Mar-15 | 31-Dec-14 | ||||||||||||||||
Principal (net) | Accrued Interest | Principal (net) | Accrued Interest | ||||||||||||||
July and August 2012 $1,060,000 Convertible Notes, 12% interest, due December 2013 and January 2014 (18 month notes), $170,000 and $170,000 outstanding , net of debt discount of $0 and $0, respectively | $ | 170,000 | $ | 54,344 | $ | 170,000 | $ | 49,313 | -1 | ||||||||
October 2013 $97,700 Convertible Note, 8% interest, due April 2014, with a 12% original issue discount, $2,700 and $2,700 outstanding, net of debt discount of $0 and $0, respectively | 2,700 | 6,766 | 2,700 | 6,713 | -2 | ||||||||||||
January 2014 $50,000 Convertible Note, 8% interest, due January 2015, $50,000 and $50,000 outstanding, net of debt discount of $0 and $3,709, respectively | 50,000 | 4,677 | 46,291 | 3,693 | -3 | ||||||||||||
January 2014 $55,500 Convertible Note, 10% interest, due October 2014, with a $5,500 original issue discount, $10,990 and $10,990 outstanding, net of debt discount of $0 and $0, respectively | 10,990 | 4,631 | 10,990 | 4,361 | -4 | ||||||||||||
February 2014 $46,080 Convertible Note, 10% interest, due February 2015, $0 and $0 outstanding, net of debt discount of $0 and $0, respectively | - | 2,358 | - | 2,358 | -5 | ||||||||||||
February 2014 $27,800 Convertible Note, 10% one-time interest, due February 2015, with a 10% original issue discount, $51,159 and $51,559 outstanding, net of debt discount of $37,011 and $46,566, respectively | 14,148 | 1,552 | 1,533 | 294 | -6 | ||||||||||||
March 2014 $50,000 Convertible Note, 10% interest, due March 2015, $36,961 and $36,961 outstanding, net of debt discount of $0 and $5,504, respectively | 36,961 | 3,795 | 31,457 | 2,886 | -7 | ||||||||||||
March 2014 $165,000 Convertible Note, 10% interest, due April 2015, with a $16,450 original issue discount, $61,301 and $84,512 outstanding, net of debt discount of $0 and $15,236, respectively | 61,301 | 16,740 | 77,521 | 14,328 | -8 | ||||||||||||
April 2014 $32,000 Convertible Note, 10% interest, due April 2015, $22,042 and $22,042 outstanding, net of debt discount of $0 and $7,710, respectively | 22,042 | 1,377 | 14,332 | 835 | -9 | ||||||||||||
April 2014 $46,080 Convertible Note, 10% interest due April 2015, $5,419 and $5,4190 outstanding, net of debt discount of $0 and $0, respectively | 5,419 | 4,741 | 5,419 | 4,608 | -10 | ||||||||||||
May 2014 $42,500 Convertible Note, 8% interest, due February 2015, $12,705 and $21,215 outstanding, net of debt discount of $0 and $15,116, respectively | 12,705 | 988 | 6,099 | 1,051 | -11 | ||||||||||||
May 2014 $55,000 Convertible Note, 12% interest, due May 2015, with a $5,000 original issue discount, $46,090 and $46,090 outstanding, net of debt discount of $10,753 and $24,315, respectively | 35,337 | 4,745 | 21,775 | 3,385 | -12 | ||||||||||||
31-Mar-15 | 31-Dec-14 | ||||||||||||||||
Principal (net) | Accrued Interest | Principal (net) | Accrued Interest | ||||||||||||||
June 2014 $37,500 Convertible Note, 8% interest, due March 2015, $37,500 and $37,500 outstanding, net of debt discount of $0 and $13,340, respectively | 37,500 | 2,390 | 27,211 | 1,652 | -13 | ||||||||||||
June 2014 $28,800 Convertible Note, 10% interest due June 2015, $28,800 and $28,800 outstanding, net of debt discount of $6,629 and $13,730, respectively | 22,171 | 3,588 | 15,070 | 2,880 | -14 | ||||||||||||
June 2014 $40,000 Convertible Note, 10% interest, due June 2015, $40,000 and $40,000 outstanding, net of debt discount of $9,535 and $19,398, respectively | 30,465 | 3,044 | 20,602 | 2,060 | -15 | ||||||||||||
June 2014 $40,000 Convertible Note, 10% interest, due June 2015, $38,689 and $38,689 outstanding, net of debt discount of $8,799 and $18,554, respectively | 29,890 | 2,944 | 20,135 | 1,993 | -16 | ||||||||||||
June 2014 $56,092 Convertible Note, 16% interest, due July 2015, with a $5,000 original issue discount, $56,092 and $56,092 outstanding, net of debt discount of $13,863 and $27,815, respectively | 42,229 | 6,719 | 28,277 | 4,512 | -17 | ||||||||||||
July 2014 $37,500 Convertible Note, 12% interest, due July 2015, $37,015 and $37,015 outstanding, net of debt discount of $11,465 and $20,737, respectively | 25,550 | 3,039 | 16,278 | 1,947 | -18 | ||||||||||||
July 2014 $37,500 Convertible Note, 8% interest, due April 2015, $37,500 and $37,500 outstanding, net of debt discount of $1,359 and $13,587, respectively | 36,141 | 2,185 | 23,913 | 1,447 | -19 | ||||||||||||
August 2014 $22,500 Convertible Note, 8% interest, due May 2015, $22,500 and $22,500 outstanding, net of debt discount of $2,817 and $9,488, respectively | 19,683 | 1,168 | 13,012 | 725 | -20 | ||||||||||||
August 2014 $36,750 Convertible Note, 10% interest, due April 2015, $36,750 and $36,750 outstanding, net of debt discount of $13,693 and $20,588, respectively | 23,057 | 2,777 | 13,995 | 1,873 | -21 | ||||||||||||
August 2014 $33,500 Convertible Note, 4% interest, due February 2015, with a $8,500 original issue discount, $33,500 and $33,500 outstanding, net of debt discount of $0 and $10,367, respectively | 33,500 | - | 23,133 | - | -22 | ||||||||||||
September 2014 $37,500 Convertible Note, 12% interest, due September 2015, with a $5,000 original issue discount, $36,263 and $36,263 outstanding, net of debt discount of $16,680 and $25,927, respectively | 19,582 | 2,306 | 10,336 | 1,236 | -23 | ||||||||||||
January 2015 $19,000 Convertible Note, 10% interest, due July 8, 2015, $19,000 and $0 outstanding, net of debt discount of $895 and $0, respectively | 18,105 | 467 | - | - | -24 | ||||||||||||
January 2015 $12,500 Convertible Note, 10% interest, due July 8, 2015, $12,500 and $0 outstanding, net of debt discount of $589 and $0, respectively | 11,911 | 307 | - | - | -25 | ||||||||||||
February 2015 $100,000 Convertible Note, 10% interest, due August 9, 2015, $100,000 and $0 outstanding, net of debt discount of $8,468 and $0, respectively | 91,532 | 2,459 | - | - | -26 | ||||||||||||
February 2015 $25,000 Convertible Note, 10% interest, due August 4, 2015, $25,000 and $0 outstanding, net of debt discount of $2,315 and $0, respectively | 22,685 | 615 | - | - | -27 | ||||||||||||
March 2015 $50,000 Convertible Note, 10% interest, due September 19, 2015, $50,000 and $0 outstanding, net of debt discount of $12,419 and $0, respectively | 37,581 | 1,230 | - | - | -28 | ||||||||||||
March 2015 $20,000 Convertible Note, 10% interest, due September 25, 2015, $20,000 and $0 outstanding, net of debt discount of $7,379 and $0, respectively | 12,621 | 492 | - | - | -29 | ||||||||||||
Total Convertible Notes Payable, Net | $ | 935,806 | $ | 142,444 | $ | 600,079 | $ | 114,150 |
9_COMMON_STOCK_OPTIONS_AND_WAR1
9. COMMON STOCK OPTIONS AND WARRANTS (Tables) | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||
Changes in the Company's stock options | Weighted | Weighted | |||||||||||||||||||
Options Outstanding | Average | Average | |||||||||||||||||||
Number | Exercise | Remaining | Aggregate | Exercise | |||||||||||||||||
Of | Price | Contractual | Intrinsic | Price | |||||||||||||||||
Shares | Per Share | Life | Value | Per Share | |||||||||||||||||
Balance at December 31, 2014 | 8,785,000 | $ | 0.09-0.15 | 3.42 years | $ | - | $ | 0.14 | |||||||||||||
Options granted | - | $ | - | - | $ | - | |||||||||||||||
Options exercised | - | $ | - | - | $ | - | |||||||||||||||
Options expired | (1,950,000 | ) | $ | 0.09 | - | $ | 0.09 | ||||||||||||||
Balance at March 31, 2015 | 6,835,000 | $ | 0.12-0.15 | 4.09 years | $ | - | $ | 0.15 | |||||||||||||
Exercisable at December 31, 2014 | 7,713,125 | $ | 0.09-0.15 | 3.42 years | $ | - | $ | 0.14 | |||||||||||||
Exercisable at March 31, 2015 | 6,835,000 | $ | 0.12-0.15 | 4.09 years | $ | - | $ | 0.15 | |||||||||||||
Changes in the Company's warrants | Weighted | Weighted | |||||||||||||||||||
Warrants Outstanding | Average | Average | |||||||||||||||||||
Number | Exercise | Remaining | Aggregate | Exercise | |||||||||||||||||
Of | Price | Contractual | Intrinsic | Price | |||||||||||||||||
Shares | Per Share | Life | Value | Per Share | |||||||||||||||||
Balance at December 31, 2014 | 2,310,770,115 | $ | 0.0001-0.25 | 2.86 years | $ | - | $ | 0.01 | |||||||||||||
Warrants granted | 45,300,000 | $ | 0.001-0.0022 | .87 years | $ | 0.012 | |||||||||||||||
Warrants exercised | (130,275,550 | ) | $ | 0.003 | - | $ | 0.003 | ||||||||||||||
Warrants expired | (5,750,000 | ) | $ | 0.06-0.175 | - | $ | 0.06-0.175 | ||||||||||||||
Balance at March 31, 2015 | 2,220,044,565 | $ | 0.01-0.25 | 2.76 years | $ | 19,972,343 | $ | 0.008 | |||||||||||||
Exercisable at December 31, 2014 | 1,978,455,471 | $ | 0.0001-0.25 | 2.86 years | $ | - | $ | 0.01 | |||||||||||||
Exercisable at March 31, 2015 | 2,220,044,565 | $ | 0.001-0.25 | 2.76 years | $ | 19,972,343 | $ | 0.008 |
1_BASIS_OF_PRESENTATION_Detail
1. BASIS OF PRESENTATION (Details) (USD $) | Mar. 31, 2015 |
Assets | |
Total Assets Measured at Fair Value | $0 |
Liabilities | |
Derivative Liability | 9,190,076 |
Total Liabilities Measured at Fair Value | 9,190,076 |
Level 1 | |
Assets | |
Total Assets Measured at Fair Value | 0 |
Liabilities | |
Derivative Liability | 0 |
Total Liabilities Measured at Fair Value | 0 |
Level 2 | |
Assets | |
Total Assets Measured at Fair Value | 0 |
Liabilities | |
Derivative Liability | 0 |
Total Liabilities Measured at Fair Value | 0 |
Level 3 | |
Assets | |
Total Assets Measured at Fair Value | 0 |
Liabilities | |
Derivative Liability | 9,190,076 |
Total Liabilities Measured at Fair Value | $9,190,076 |
2_GOING_CONCERN_Details_Narrat
2. GOING CONCERN (Details Narrative) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Going Concern Details Narrative | ||
Cash on hand | $2,485 | $203 |
3_FIXED_ASSETS_Details
3. FIXED ASSETS (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Total Fixed assets | $2,614,153 | $2,614,153 |
Less accumulated depreciation | -2,606,730 | -2,605,400 |
Net Fixed assets | 7,423 | 8,753 |
Production equipment [Member] | ||
Total Fixed assets | 2,131,377 | 2,131,377 |
Less accumulated depreciation | -2,124,370 | -2,123,462 |
Building [Member] | ||
Total Fixed assets | 446,772 | 446,772 |
Less accumulated depreciation | -446,772 | -446,772 |
Leasehold Improvements [Member] | ||
Total Fixed assets | 3,235 | 3,235 |
Less accumulated depreciation | -3,235 | -3,235 |
Office Equipment [Member] | ||
Total Fixed assets | 32,769 | 32,769 |
Less accumulated depreciation | ($32,353) | ($31,931) |
3_FIXED_ASSETS_Details_1
3. FIXED ASSETS (Details 1) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Property Plant And Equipment | ||
Accumulated depreciation | $2,606,730 | $2,605,400 |
Production equipment [Member] | ||
Property Plant And Equipment | ||
Accumulated depreciation | 2,124,370 | 2,123,462 |
Building [Member] | ||
Property Plant And Equipment | ||
Accumulated depreciation | 446,772 | 446,772 |
Leasehold Improvements [Member] | ||
Property Plant And Equipment | ||
Accumulated depreciation | 3,235 | 3,235 |
Office Equipment [Member] | ||
Property Plant And Equipment | ||
Accumulated depreciation | $32,353 | $31,931 |
3_FIXED_ASSETS_Details_Narrati
3. FIXED ASSETS (Details Narrative) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Property Plant And Equipment | ||
Depreciation expense | $1,330 | $1,540 |
4_INTANGIBLE_ASSETS_Details
4. INTANGIBLE ASSETS (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
INTANGIBLE ASSETS | ||
License Fee | $112,500 | $112,500 |
Less accumulated amortization | -112,500 | -111,161 |
License Fee, Net | 0 | 1,339 |
Patents and intellectual property | 35,482 | 35,482 |
Intangible assets net of accumulated amortization | $35,482 | $36,821 |
4_INTANGIBLE_ASSETS_Details_Na
4. INTANGIBLE ASSETS (Details Narrative) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
INTANGIBLE ASSETS | ||
Amortization expense | $1,339 | $1,458 |
5_RELATED_PARTY_TRANSACTIONS_D
5. RELATED PARTY TRANSACTIONS (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Office and warehouse lease effective August 1, 2007 | ||
Monthly rental payments | $0 | $147,613 |
Corporate office | 4,500 | 18,000 |
Total Rental Expense | $4,500 | $165,613 |
7_SHORT_TERM_LOAN_PAYABLE_Deta
7. SHORT TERM LOAN PAYABLE (Details Narrative) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Short Term Loan Payable Details Narrative | |
Interest paid for short term loan | $2,031 |
9_COMMON_STOCK_OPTIONS_AND_WAR2
9. COMMON STOCK OPTIONS AND WARRANTS (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | |
Stock Options | ||
Number of Options | ||
Number of Options Outstanding | 8,785,000 | |
Number of Options Granted | 0 | |
Number of Options Exercised | 0 | |
Number of Options Expired | -1,950,000 | |
Number of Options Outstanding | 6,835,000 | |
Exercisable | 6,835,000 | 7,713,125 |
Weighted Average Exercise Price | ||
Weighted Average Exercise Price Outstanding, Beginning | $0.14 | |
Weighted Average Exercise Price Granted | $0 | |
Weighted Average Exercise Price Exercised | $0 | |
Weighted Average Exercise Price Expired | $0.09 | |
Weighted Average Exercise Price Outstanding, Ending | $0.15 | |
Weighted Average Exercise Price Exercisable | $0.15 | $0.14 |
Weighted Average Remaining Contractual Life (in years) | ||
Weighted Average Remaining Contractual Life (in years) Outstanding | 4 years 1 month 2 days | |
Weighted Average Remaining Contractual Life (in years) Exercisable | 4 years 1 month 2 days | |
Aggregate Intrinsic Value | ||
Aggregate Intrinsic Value Outstanding | $0 | |
Aggregate Intrinsic Value Exercisable | 0 | 0 |
Exercise Price Per Share | ||
Exercise Price, Minimum | $0.12 | $0.09 |
Exercise Price, Maximum | $0.15 | $0.15 |
Excercise Price, Options expired, Minimum | $0.09 | |
Excercise Price, Exercisable, Minimum | $0.12 | $0.09 |
Excercise Price, Exercisable, Maximum | $0.15 | $0.15 |
Warrants | ||
Number of Options | ||
Number of Options Outstanding | 2,310,770,115 | |
Number of Options Granted | 45,300,000 | |
Number of Options Exercised | -130,275,550 | |
Number of Options Expired | -5,750,000 | |
Number of Options Outstanding | 2,220,044,565 | |
Exercisable | 2,220,044,565 | 1,978,455,471 |
Weighted Average Exercise Price | ||
Weighted Average Exercise Price Outstanding, Beginning | $0.01 | |
Weighted Average Exercise Price Granted | $0.01 | |
Weighted Average Exercise Price Exercised | $0.00 | |
Weighted Average Exercise Price Outstanding, Ending | $0.01 | |
Weighted Average Exercise Price Exercisable | $0.01 | $0.01 |
Weighted Average Remaining Contractual Life (in years) | ||
Weighted Average Remaining Contractual Life (in years) Outstanding | 2 years 9 months 4 days | |
Weighted Average Remaining Contractual Life (in years) Granted | 10 months 13 days | |
Weighted Average Remaining Contractual Life (in years) Exercisable | 2 years 9 months 4 days | |
Aggregate Intrinsic Value | ||
Aggregate Intrinsic Value Outstanding | 19,972,343 | |
Aggregate Intrinsic Value Exercisable | $19,972,343 | |
Exercise Price Per Share | ||
Exercise Price, Minimum | $0.01 | $0.00 |
Exercise Price, Maximum | $0.25 | $0.25 |
Excercise Price, Warrants Granted, Minimum | $0.00 | |
Excercise Price, Warrants Granted, Maximum | $0.00 | |
Excercise Price, Warrants Exercised | $0.00 | |
Excercise Price, Warrants Expired, Minimum | $0.06 | |
Excercise Price, Warrants Expired, Maximum | $0.18 | |
Excercise Price, Exercisable, Minimum | $0.00 | $0.00 |
Excercise Price, Exercisable, Maximum | $0.25 | $0.25 |