Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 19-May-15 | |
Document and Entity Information: | ||
Entity Registrant Name | EHOUSE GLOBAL, INC. | |
EntityTradingSymbol | EHOS | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Entity Central Index Key | 1452580 | |
Current Fiscal Year End Date | -19 | |
Entity Common Stock, Shares Outstanding | 1,012,706,304 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 |
Balance_Sheets_Unaudited
Balance Sheets (Unaudited) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Current Assets | ||
Cash | $367 | $907 |
Debt issuance costs, net of accumulated amortization | 987 | 3,972 |
Total Current Assets | 1,354 | 4,879 |
Furniture and equipment, net of accumulated depreciation | 990 | 935 |
Total Assets | 2,344 | 5,813 |
Current Liabilities | ||
Accounts payable & accrued expenses | 159,184 | 55,031 |
Notes payable - related party | 75,000 | 75,000 |
Convertible debt, net of debt discount of $68,362 and $75,117, respectively | 348,597 | 384,592 |
Derivative liabilities - warrants | 12,422 | 24,826 |
Current portion of derivative liabilities - debt | 1,337,341 | 524,361 |
Total Current Liabilities | 1,932,544 | 1,063,810 |
Non-current Liabilities | ||
Convertible debt, net of debt discount of $42,786 and $51,846, respectively | 36,378 | 24,285 |
Derivative liabilities - debt | 234,539 | 0 |
Total Liabilities | 2,203,461 | 1,088,095 |
Commitments and contingencies | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock: $0.001 par value, 1,000,000 shares authorized, 600,000 and 600,000 shares issued and outstanding | 600 | 600 |
Common stock: $0.001 par value, 5,000,000,000 shares authorized; 679,983,283 and 13,095,733 shares issued and outstanding at March 31, 2015 and December 31, 2014 | 679,983 | 13,096 |
Additional paid-in capital | 1,836,204 | 2,082,280 |
Accumulated deficit | -4,717,904 | -3,178,258 |
Total Stockholders' Deficit | -2,201,117 | -1,082,282 |
Total Liabilities and Stockholders' Deficit | $2,344 | $5,813 |
Balance_Sheets_Parentheticals
Balance Sheets Parentheticals (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Parentheticals | ||
Convertible Debt,Net of debt discount | $68,362 | $75,117 |
Convertible Debt,Net of debt discount | $42,786 | $51,846 |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 600,000 | 600,000 |
Preferred stock, shares outstanding | 600,000 | 600,000 |
Common Stock, par value | $0.00 | $0.00 |
Common Stock, shares authorized | 5,000,000,000 | 5,000,000,000 |
Common Stock, shares issued | 679,983,283 | 13,095,733 |
Common Stock, shares outstanding | 679,983,283 | 13,095,733 |
Statements_of_Operations_Unaud
Statements of Operations (Unaudited) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Operating Expenses: | ||
General and administrative expenses | $414,558 | $426,032 |
Total operating expenses | 414,558 | 426,032 |
Other Expense: | ||
Interest expense | -43,146 | -1,066,811 |
Change in fair value of derivative liabilities | -1,081,942 | -68,818 |
Total other expense | -1,125,088 | -1,135,629 |
Net loss before taxes | -1,539,646 | -1,561,661 |
Income taxes | 0 | 0 |
Net loss | ($1,539,646) | ($1,561,661) |
Net loss per common share: Basic and diluted | ($0.01) | ($0.01) |
Weighted average number of common shares outstanding: Basic and diluted | 177,902,310 | 115,620,378 |
Statement_of_change_in_Stockho
Statement of change in Stockholders Equity (Deficit) (USD $) | Preferred Stock Shares | Preferred Stock Amount | Common Stock Shares | Common Stock Amount | Additional Paid-In Capital | Accumulated (Deficit) | Total |
Balances at Dec. 31, 2014 | 600,000 | 600 | 13,095,733 | 13,096 | 2,082,280 | -3,178,258 | -1,082,282 |
Stock-based compensation | $0 | $0 | $300,750,000 | $300,750 | ($27,000) | $0 | $273,750 |
Change in classification of derivative liabilities from debt to equity associated with debt conversions | 0 | 0 | 90,295 | 0 | 90,295 | ||
Convertible debt and accrued interest converted into common stock | 0 | 0 | 366,137,550 | 366,137 | -309,371 | 0 | 56,766 |
Net loss | $0 | $0 | $0 | ($1,539,646) | ($1,539,646) | ||
Balances at Mar. 31, 2015 | 600,000 | 600 | 679,983,283 | 679,983 | 1,836,204 | -4,717,904 | -2,201,117 |
Statements_of_Cash_Flows
Statements of Cash Flows (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | ($1,539,646) | ($1,561,661) |
Adjustments to reconcile net loss to net cash used in operating activities : | ||
Stock-based compensation | 273,750 | 62,598 |
Preferred stock issued for services | 0 | 191,131 |
Amortization of debt issuance costs | 2,985 | 3,494 |
Amortization of debt discount | 21,898 | 71,549 |
Fair value of derivative liabilities in excess of convertible debt | 13,884 | 979,168 |
Change in fair value of derivative liabilities | 1,081,942 | 68,818 |
Changes in operating assets and liabilities: | ||
Accounts payable and accrued expenses | 104,147 | 10,655 |
Net cash used in operating activities | -41,040 | -174,248 |
CASH FROM INVESTING ACTIVITIES | ||
Purchase of equipment | 0 | -1,180 |
Net cash used in investing activities | 0 | -1,180 |
CASH FROM FINANCING ACTIVITIES | ||
Debt issuance costs paid | 0 | -5,750 |
Proceeds from convertible notes payable | 40,500 | 248,500 |
Net cash provided by financing activities | 40,500 | 242,750 |
NET INCREASE (DECREASE) IN CASH | -540 | 67,322 |
CASH AT BEGINNING OF PERIOD | 907 | 14,779 |
CASH AT END OF PERIOD | 367 | 82,101 |
Cash paid during the period for: | ||
Interest | 998 | 0 |
Income taxes | 0 | 0 |
Supplementary disclosure of non-cash investing and financing activities: | ||
Non-cash additions to convertible note balance | 0 | 5,000 |
Change in classification of derivative liabilities from debt to equity associated with debt conversions | 90,295 | 293,545 |
Note payable reclassified to convertible debt | 0 | 100,000 |
Shares issued in conversion of convertible debt and accrued interest | 56,766 | 67,872 |
Debt discount on convertible notes accounted for as derivative liabilities | $29,584 | $248,500 |
BASIS_OF_PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2015 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | NOTE 1 - BASIS OF PRESENTATION |
Ehouse Global, Inc. was incorporated under the laws of the Commonwealth of Massachusetts on February 11, 2005, and became a corporation in the State of Nevada on January 7, 2009. It changed its name to Ehouse Global, Inc. (the “Company”) in January, 2013. | |
EHouse Global, Inc. (the “Company”) prepared these financial statements in accordance with both accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Therefore, the financial statements do not include all disclosures required by generally accepted accounting principles. However, the Company has recorded all transactions and adjustments necessary to present fairly the financial statements included in this Form 10-Q. The adjustments made are normal and recurring. The following notes describe only the material changes in accounting policies, account details or financial statement notes during the first three months of 2015. Therefore, please read these financial statements and notes to the financial statements together with the audited financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2014. The income statement for the three months ended March 31, 2015 cannot necessarily be used to project results for the full year. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Basis of Presentation | |||||
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in The United States of America and the rules and regulations of the Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information necessary for a comprehensive presentation of financial position and results of operations. | |||||
It is management's opinion, however, that all material adjustments (consisting of normal and recurring adjustments) have been made which are necessary for a fair financial statements presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year. | |||||
Reclassifications | |||||
Certain reclassifications have been made to amounts in prior periods to conform to the current period presentation. All reclassifications have been applied consistently to the periods presented. | |||||
Use of Estimates | |||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |||||
Cash and Cash Equivalents | |||||
The Company considers all highly liquid instruments with a maturity of three months or less to be cash and cash equivalents. | |||||
Furniture and Equipment | |||||
Furniture and equipment are stated at cost, less accumulated depreciation. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is provided using the straight-line method over the estimated useful life of three to seven years. | |||||
Debt Issuance Costs and Debt Discount | |||||
The Company may pay debt issue costs and record debt discounts in connection with raising funds through the issuance of convertible debt. These costs are amortized to interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. | |||||
Original Issuance Discount | |||||
For certain convertible debt issued, the Company provides the debt holder with an original issue discount. The original issue discount is recorded as a debt discount, reducing the face amount of the note and is amortized to interest expense over the life of the debt. | |||||
Derivative Financial Instruments | |||||
Fair value accounting requires bifurcation of embedded derivative instruments such as convertible features in convertible debts or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the binomial option-pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments. | |||||
Fair Value of Financial Instruments | |||||
The Company measures assets and liabilities at fair value based on expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale date of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. | |||||
The following are the hierarchical levels of inputs to measure fair value: | |||||
· | |||||
Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. | |||||
· | |||||
Level 2: Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. | |||||
· | |||||
Level 3: Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. | |||||
The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts payable and accrued expenses, approximate their fair values because of the current nature of these instruments. Debt approximates fair value based on interest rates available for similar financial arrangements. Derivative liabilities which have been bifurcated from host convertible debt agreements are presented at fair value. | |||||
The following are the major categories of liabilities measured at fair value on a recurring basis as of March 31, 2015 and December 31, 2014, using quoted prices in active markets for identical liabilities (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3): | |||||
Fair Value Measurements at March 31, 2015 | |||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Carrying Value | ||
Derivative liabilities – debt | $ - | $ - | $ 1,571,880 | $ 1,571,880 | |
Derivative liabilities – warrants | - | - | 12,422 | 12,422 | |
Total | - | - | 1,584,302 | 1,584,302 | |
Less: current portion | - | - | -1,349,763 | -1,349,763 | |
Long-term portion | $ - | $ - | $ 234,539 | $ 234,539 | |
Fair Value Measurements at December 31, 2014 | |||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Carrying Value | ||
Derivative liabilities – debt | $ - | $ - | $ 524,361 | $ 524,361 | |
Derivative liabilities – warrants | - | - | 24,826 | 24,826 | |
Total | - | - | 549,187 | 549,187 | |
Less: current portion | - | - | - | - | |
Long-term portion | $ - | $ - | $ 549,187 | $ 549,187 | |
Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives. In addition, the fair value of freestanding derivative instruments, such as warrants, are also valued using the binomial option-pricing model. | |||||
Income Taxes | |||||
Deferred income tax assets and liabilities are provided for based upon differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date. | |||||
Commitments and Contingencies | |||||
Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. | |||||
Stock-based Compensation | |||||
Measurement of the cost of employee services received in exchange for an award of equity instruments is based on the grant-date fair value of the award (with limited exceptions). | |||||
Net Loss Per Common Share | |||||
Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period. | |||||
The computation of basic and diluted loss per share at March 31, 2015 excludes the common stock equivalents of the following potentially dilutive securities because their inclusion would be anti-dilutive: | |||||
31-Mar-15 | |||||
Convertible debt | 10,234,155,858 | ||||
Warrant | 79,125,238 | ||||
Total | 10,313,281,096 | ||||
New Accounting Standards | |||||
In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30) - Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 amends previous guidance to require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The standard is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. The Company plans to adopt ASU No.2015-03 regarding the presentation of debt issuance cost from fiscal year 2016. | |||||
Subsequent Events | |||||
The Company evaluates subsequent events from the date of the balance sheet through the date when the financial statements are issued or available to be issued for disclosure consideration. |
GOING_CONCERN
GOING CONCERN | 3 Months Ended |
Mar. 31, 2015 | |
GOING CONCERN | |
GOING CONCERN | NOTE 3 - GOING CONCERN |
The accompanying unaudited financial statements have been prepared assuming that we will continue as a going concern. As reflected in the accompanying financial statements, we have very limited financial resources, with working capital and net stockholders’ deficits and had generated no revenue through March 31, 2015. | |
We have actively developed and plan to introduce sixteen different liquid nutritional products into the market. While we are undertaking our business plan to generate additional revenues, our cash position may not be sufficient to support our basic business plan and product distribution efforts. Management believes that the actions presently underway to introduce our products to the marketplace have a realistic chance of succeeding. While we believe in the viability of our strategy to increase revenues and in our ability to raise additional funds, there can be no assurances to that effect. Our ability to continue as a going concern is dependent upon our ability to achieve profitable operations or obtain adequate financing. | |
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern. |
CONVERTIBLE_DEBT
CONVERTIBLE DEBT | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
CONVERTIBLE DEBT | |||||
CONVERTIBLE DEBT | NOTE 4 - CONVERTIBLE DEBT | ||||
On various dates from November 27, 2013 through March 2, 2015, the Company issued convertible promissory notes totaling $951,081. At the time of issuance, the notes were evaluated and were determined to contain embedded conversion options that must be bifurcated and reported at fair value with original issue discounts. As a result, a derivative discount on convertible promissory notes was recorded, which net of discount amortization for the three months ended March 31, 2015 amounted to $111,148. | |||||
Description | March 31, | 31-Dec-14 | |||
2015 | |||||
20 convertible promissory notes in amounts ranging from $9,000 to $112,000, with maturity dates ranging from 2014 to August 2016, bearing interest ranging from 0% to 12% per annum, convertible into common stock at variable conversion prices ranging from 25% of the lowest price in the prior 20 trading days to 60% of the lowest price in the prior 25 trading days. The Company expects all debt will be converted to common shares. | $ | 951,081 | $ | 934,081 | |
Less: debt discount | -815,040 | -783,956 | |||
Less: conversions | -454,958 | -398,241 | |||
Add: amortization of debt discount | 703,892 | 656,993 | |||
Balance of convertible debt, net | 384,975 | 408,877 | |||
Less: current portion | -348,597 | -384,592 | |||
Long-term convertible debt, net | $ | 36,378 | $ | 24,285 | |
Debt Issuance Costs | |||||
The following is a summary of the change in the Company’s debt issuance costs for the three months ended March 31, 2015: | |||||
31-Mar-15 | |||||
Debt issuance costs | $ | 26,250 | |||
Accumulated amortization of debt issuance costs | -25,263 | ||||
Debt issuance costs - net | $ | 987 | |||
Debt Discount | |||||
During the three months ended March 31, 2015, the Company recorded debt discounts totaling $31,084. | |||||
The Company amortized debt discount of $46,898 during the three months ended March 31, 2015. | |||||
Debt discount consisted of the following at March 31, 2015: | |||||
31-Mar-15 | |||||
Debt discount | $ | 815,040 | |||
Accumulated amortization of debt discount | -703,892 | ||||
Debt discount - net | $ | 111,148 | |||
Derivative Liabilities | |||||
The Company identified the conversion features embedded within its convertible debts as financial derivatives. The Company has determined that the embedded conversion option should be accounted for at fair value. | |||||
The following schedule shows the change in fair value of the derivative liabilities during the three months ended March 31, 2015: | |||||
Derivative liabilities - December 31, 2014 | $ | 549,187 | |||
Add fair value at the commitment date for convertible notes issued during the current quarter | 43,468 | ||||
Reclassification of derivative liabilities associated with convertible debt that ceased being a derivative liability to additional paid-in capital | -90,295 | ||||
Fair value mark to market adjustment for derivatives | 1,081,942 | ||||
Derivative liabilities - March 31, 2015 | 1,584,302 | ||||
Less: current portion | -1,349,763 | ||||
Long-term derivative liabilities | $ | 234,539 | |||
The Company recorded the debt discount to the extent of the gross proceeds raised, and expensed immediately the remaining value of the derivative as it exceeded the gross proceeds of the note. The Company recorded derivative interest expenses for the three months ended March 31, 2015 of $13,884. | |||||
The fair value at the commitment and re-measurement dates for the Company’s derivative liabilities were based upon the following management assumptions during the current quarter: | |||||
Assumption | Commitment | Remeasurement | |||
Date | Date | ||||
Expected dividends: | 0% | 0% | |||
Expected volatility: | 218.07% - 653.42% | 434.44% - 672.48% | |||
Expected term (years): | 0.76 - 1 years | 0.083 - 1.35 years | |||
Risk free interest rate: | 0.18% - 0.22% | 0.17%-0.28% |
NOTE_PAYABLE_RELATED_PARTY
NOTE PAYABLE - RELATED PARTY | 3 Months Ended |
Mar. 31, 2015 | |
NOTE PAYABLE - RELATED PARTY | |
NOTE PAYABLE - RELATED PARTY | NOTE 5 - NOTE PAYABLE – RELATED PARTY |
The Company’s President has made a loan of $75,000 to the Company. The loan is interest-free and due upon demand. |
STOCKHOLDERS_EQUITY
STOCKHOLDERS EQUITY | 3 Months Ended |
Mar. 31, 2015 | |
STOCKHOLDERS EQUITY | |
STOCKHOLDERS EQUITY | NOTE 6 - STOCKHOLDERS’ DEFICIT |
Common Stock | |
On January 14, 2015, the Company issued 150,000 shares and 600,000 shares to two marketing companies for investment IR. The stock shares valued at $3,750 based upon the quoted closing trading price on the date of issuance. | |
On February 26, 2015, the Company issued 300,000,000 shares to its CEO as bonus, the total issued shares valued at $270,000 based upon the quoted closing trading price on the date of issuance. | |
Throughout the three months ended March 31, 2015, the Company issued common stock totaling 366,137,550 shares in conversion of convertible debt and a portion of accrued interest. The total conversion value is $56,766. |
SUBSEQUENT_EVENT
SUBSEQUENT EVENT | 3 Months Ended |
Mar. 31, 2015 | |
SUBSEQUENT EVENT | |
SUBSEQUENT EVENT | NOTE 7 - SUBSEQUENT EVENTS |
On May 12, 2015, the Board of Directors of EHouse Global, Inc. (the “Company”) approved the reverse stock split of the issued and outstanding shares of common stock on a 1-for-3000 basis. The reverse stock split is pending FINRA approval. | |
From April 6, 2015 to May 4, 2015, the Company issued common stock totaling 332,723,021 shares in conversion of convertible debt and a portion of accrued interest. The total conversion value is $14,048 |
Accounting_Policies_Policies
Accounting Policies (Policies) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Accounting Policies: | |||||
Basis of Presentation | Basis of Presentation | ||||
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in The United States of America and the rules and regulations of the Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information necessary for a comprehensive presentation of financial position and results of operations. | |||||
It is management's opinion, however, that all material adjustments (consisting of normal and recurring adjustments) have been made which are necessary for a fair financial statements presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year. | |||||
Reclassification, Policy | Reclassifications | ||||
Certain reclassifications have been made to amounts in prior periods to conform to the current period presentation. All reclassifications have been applied consistently to the periods presented. | |||||
Estimates | |||||
Use of Estimates | |||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |||||
Cash and Cash Equivalents, Policy | |||||
Cash and Cash Equivalents | |||||
The Company considers all highly liquid instruments with a maturity of three months or less to be cash and cash equivalents. | |||||
Furniture and Equipment | |||||
Furniture and Equipment | |||||
Furniture and equipment are stated at cost, less accumulated depreciation. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is provided using the straight-line method over the estimated useful life of three to seven years. | |||||
Debt Issuance Costs and Debt Discount | |||||
Debt Issuance Costs and Debt Discount | |||||
The Company may pay debt issue costs and record debt discounts in connection with raising funds through the issuance of convertible debt. These costs are amortized to interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. | |||||
Original issue discount | |||||
Original Issuance Discount | |||||
For certain convertible debt issued, the Company provides the debt holder with an original issue discount. The original issue discount is recorded as a debt discount, reducing the face amount of the note and is amortized to interest expense over the life of the debt. | |||||
Derivative Financial Instruments | |||||
Derivative Financial Instruments | |||||
Fair value accounting requires bifurcation of embedded derivative instruments such as convertible features in convertible debts or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the binomial option-pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments. | |||||
Fair Value of Financial Instruments | |||||
Fair Value of Financial Instruments | |||||
The Company measures assets and liabilities at fair value based on expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale date of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. | |||||
The following are the hierarchical levels of inputs to measure fair value: | |||||
· | |||||
Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. | |||||
· | |||||
Level 2: Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. | |||||
· | |||||
Level 3: Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. | |||||
The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts payable and accrued expenses, approximate their fair values because of the current nature of these instruments. Debt approximates fair value based on interest rates available for similar financial arrangements. Derivative liabilities which have been bifurcated from host convertible debt agreements are presented at fair value. | |||||
The following are the major categories of liabilities measured at fair value on a recurring basis as of March 31, 2015 and December 31, 2014, using quoted prices in active markets for identical liabilities (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3): | |||||
Fair Value Measurements at March 31, 2015 | |||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Carrying Value | ||
Derivative liabilities – debt | $ - | $ - | $ 1,571,880 | $ 1,571,880 | |
Derivative liabilities – warrants | - | - | 12,422 | 12,422 | |
Total | - | - | 1,584,302 | 1,584,302 | |
Less: current portion | - | - | -1,349,763 | -1,349,763 | |
Long-term portion | $ - | $ - | $ 234,539 | $ 234,539 | |
Fair Value Measurements at December 31, 2014 | |||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Carrying Value | ||
Derivative liabilities – debt | $ - | $ - | $ 524,361 | $ 524,361 | |
Derivative liabilities – warrants | - | - | 24,826 | 24,826 | |
Total | - | - | 549,187 | 549,187 | |
Less: current portion | - | - | - | - | |
Long-term portion | $ - | $ - | $ 549,187 | $ 549,187 | |
Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives. In addition, the fair value of freestanding derivative instruments, such as warrants, are also valued using the binomial option-pricing model. | |||||
Income Taxes | |||||
Income Taxes | |||||
Deferred income tax assets and liabilities are provided for based upon differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date. | |||||
Commitments and Contingencies | |||||
Commitments and Contingencies | |||||
Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. | |||||
Stock-based Compensation | |||||
Stock-based Compensation | |||||
Measurement of the cost of employee services received in exchange for an award of equity instruments is based on the grant-date fair value of the award (with limited exceptions). | |||||
Net Loss Per Common Share | |||||
Net Loss Per Common Share | |||||
Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period. | |||||
The computation of basic and diluted loss per share at March 31, 2015 excludes the common stock equivalents of the following potentially dilutive securities because their inclusion would be anti-dilutive: | |||||
31-Mar-15 | |||||
Convertible debt | 10,234,155,858 | ||||
Warrant | 79,125,238 | ||||
Total | 10,313,281,096 | ||||
New Accounting Standards | |||||
New Accounting Standards | |||||
In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30) - Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 amends previous guidance to require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The standard is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. The Company plans to adopt ASU No.2015-03 regarding the presentation of debt issuance cost from fiscal year 2016. | |||||
Subsequent Events | |||||
Subsequent Events | |||||
The Company evaluates subsequent events from the date of the balance sheet through the date when the financial statements are issued or available to be issued for disclosure consideration. | |||||
Schedule_of_liabilities_measur
Schedule of liabilities measured at fair value on a recurring basis (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Schedule of liabilities measured at fair value on a recurring basis | |||||
Schedule of liabilities measured at fair value on a recurring basis | The following are the major categories of liabilities measured at fair value on a recurring basis as of March 31, 2015 and December 31, 2014, using quoted prices in active markets for identical liabilities (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3): | ||||
Fair Value Measurements at March 31, 2015 | |||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Carrying Value | ||
Derivative liabilities – debt | $ - | $ - | $ 1,571,880 | $ 1,571,880 | |
Derivative liabilities – warrants | - | - | 12,422 | 12,422 | |
Total | - | - | 1,584,302 | 1,584,302 | |
Less: current portion | - | - | -1,349,763 | -1,349,763 | |
Long-term portion | $ - | $ - | $ 234,539 | $ 234,539 | |
Fair Value Measurements at December 31, 2014 | |||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Carrying Value | ||
Derivative liabilities – debt | $ - | $ - | $ 524,361 | $ 524,361 | |
Derivative liabilities – warrants | - | - | 24,826 | 24,826 | |
Total | - | - | 549,187 | 549,187 | |
Less: current portion | - | - | - | - | |
Long-term portion | $ - | $ - | $ 549,187 | $ 549,187 |
Net_Loss_Per_Common_Share_Tabl
Net Loss Per Common Share (Tables) | 3 Months Ended | ||
Mar. 31, 2015 | |||
Schedule of Potentially dilutive securities excluded from compuation | |||
Schedule of Potentially dilutive securities excluded from compuation of basic and diluted loss per share | The computation of basic and diluted loss per share at March 31, 2015 excludes the common stock equivalents of the following potentially dilutive securities because their inclusion would be anti-dilutive: | ||
31-Mar-15 | |||
Convertible debt | 10,234,155,858 | ||
Warrant | 79,125,238 | ||
Total | 10,313,281,096 |
SCHEDULE_OF_CONVERTIBLE_DEBT_T
SCHEDULE OF CONVERTIBLE DEBT (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
SCHEDULE OF CONVERTIBLE DEBT | |||||
SCHEDULE OF CONVERTIBLE DEBT | Description | March 31, | 31-Dec-14 | ||
2015 | |||||
20 convertible promissory notes in amounts ranging from $9,000 to $112,000, with maturity dates ranging from 2014 to August 2016, bearing interest ranging from 0% to 12% per annum, convertible into common stock at variable conversion prices ranging from 25% of the lowest price in the prior 20 trading days to 60% of the lowest price in the prior 25 trading days. The Company expects all debt will be converted to common shares. | $ | 951,081 | $ | 934,081 | |
Less: debt discount | -815,040 | -783,956 | |||
Less: conversions | -454,958 | -398,241 | |||
Add: amortization of debt discount | 703,892 | 656,993 | |||
Balance of convertible debt, net | 384,975 | 408,877 | |||
Less: current portion | -348,597 | -384,592 | |||
Long-term convertible debt, net | $ | 36,378 | $ | 24,285 | |
Schedule_of_Debt_Issuance_Cost
Schedule of Debt Issuance Costs (Tables) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Schedule of Debt Issuance Costs (Tables): | ||||
Schedule of Debt Issuance Costs (Tables) | The following is a summary of the change in the Company’s debt issuance costs for the three months ended March 31, 2015: | |||
31-Mar-15 | ||||
Debt issuance costs | $ | 26,250 | ||
Accumulated amortization of debt issuance costs | -25,263 | |||
Debt issuance costs - net | $ | 987 | ||
Schedule_of_Debt_Discount_Tabl
Schedule of Debt Discount (Tables) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Schedule of Debt Discount Table Text Block: | ||||
Schedule of Debt Discount Table Text Block | Debt discount consisted of the following at March 31, 2015: | |||
31-Mar-15 | ||||
Debt discount | $ | 815,040 | ||
Accumulated amortization of debt discount | -703,892 | |||
Debt discount - net | $ | 111,148 | ||
Fair_value_of_the_conversion_f
Fair value of the conversion feature (Tables) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Fair value of the conversion feature | ||||
Schedule of Derivative Liabilities at Fair Value | The following schedule shows the change in fair value of the derivative liabilities during the three months ended March 31, 2015: | |||
Derivative liabilities - December 31, 2014 | $ | 549,187 | ||
Add fair value at the commitment date for convertible notes issued during the current quarter | 43,468 | |||
Reclassification of derivative liabilities associated with convertible debt that ceased being a derivative liability to additional paid-in capital | -90,295 | |||
Fair value mark to market adjustment for derivatives | 1,081,942 | |||
Derivative liabilities - March 31, 2015 | 1,584,302 | |||
Less: current portion | -1,349,763 | |||
Long-term derivative liabilities | $ | 234,539 |
Schedule_of_fair_value_assumpt
Schedule of fair value assumptions (Tables) | 3 Months Ended | ||
Mar. 31, 2015 | |||
Schedule of fair value assumptions Table Text Block: | |||
Schedule of fair value assumptions Table Text Block | The fair value at the commitment and re-measurement dates for the Company’s derivative liabilities were based upon the following management assumptions during the current quarter: | ||
Assumption | Commitment | Remeasurement | |
Date | Date | ||
Expected dividends: | 0% | 0% | |
Expected volatility: | 218.07% - 653.42% | 434.44% - 672.48% | |
Expected term (years): | 0.76 - 1 years | 0.083 - 1.35 years | |
Risk free interest rate: | 0.18% - 0.22% | 0.17%-0.28% | |
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments - Liabilities measured at fair value on a recurring basis (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Fair Value Measurements Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Derivative liabilities - debt | $0 | $0 |
Derivative liabilities - warrants | 0 | 0 |
Total | 0 | 0 |
Less: current portion | 0 | 0 |
Long-term portion | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Derivative liabilities - debt | 0 | 0 |
Derivative liabilities - warrants | 0 | 0 |
Total | 0 | 0 |
Less: current portion | 0 | 0 |
Long-term portion | 0 | 0 |
Significant Other Observable Inputs (Level 3) | ||
Derivative liabilities - debt | 1,571,880 | 524,361 |
Derivative liabilities - warrants | 12,422 | 24,826 |
Total | 1,584,302 | 549,187 |
Less: current portion | -1,349,763 | 0 |
Long-term portion | 234,539 | 549,187 |
Total Carrying Value | ||
Derivative liabilities - debt | 1,571,880 | 524,361 |
Derivative liabilities - warrants | 12,422 | 24,826 |
Total | 1,584,302 | 549,187 |
Less: current portion | -1,349,763 | 0 |
Long-term portion | $234,539 | $549,187 |
Net_Loss_Per_Common_Share_Pote
Net Loss Per Common Share - Potentially dilutive securities (Details) (USD $) | Mar. 31, 2015 |
Potentially dilutive securities (Details) | |
Convertible debt | $10,234,155,858 |
Warrant | 79,125,238 |
Total | $10,313,281,096 |
CONVERTIBLE_DEBT_Details
CONVERTIBLE DEBT (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | |
Convertible Debt Details | ||
20 convertible promissory notes in amounts ranging from $9,000 to $112,000, with maturity dates ranging from 2014 to August 2016, bearing interest ranging from 0% to 12% per annum, convertible into common stock at variable conversion prices ranging from 25% of the lowest price in the prior 20 trading days to 60% of the lowest price in the prior 25 trading days. The Company expects all debt will be converted to common shares. | $951,081 | $934,081 |
Less: debt discount | -815,040 | -783,956 |
Less: conversions | -454,958 | -398,241 |
Add: amortization of debt discount | 703,892 | 656,993 |
Balance of convertible debt, net | 384,975 | 408,877 |
Less: current portion | -348,597 | -384,592 |
Long-term convertible debt, net | $36,378 | $24,285 |
CONVERTIBLE_DEBT_Debt_Issuance
CONVERTIBLE DEBT - Debt Issuance Costs (Details) (USD $) | Mar. 31, 2015 |
Debt Issuance Costs Details | |
Debt issuance costs | $26,250 |
Accumulated amortization of debt issuance costs | -25,263 |
Debt issuance costs - net | $987 |
CONVERTIBLE_DEBT_Debt_Discount
CONVERTIBLE DEBT - Debt Discount (Details) (USD $) | Mar. 31, 2015 |
Debt Discount Details | |
Debt discount | $815,040 |
Accumulated amortization of debt discount | -703,892 |
Debt discount - net | $111,148 |
Debt_Discount_Narrative_Detail
Debt Discount Narrative (Details) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Debt Discount Narrative Details | |
Debt discounts | $31,084 |
Amortized debt discount | $46,898 |
Summarized_fair_value_of_the_c
Summarized fair value of the conversion feature (Details) (USD $) | Fair value conversion feature |
Derivative liabilities at Dec. 31, 2014 | $549,187 |
Add fair value at the commitment date for convertible notes issued during the current quarter | 43,468 |
Reclassification of derivative liabilities associated with convertible debt that ceased being a derivative liability to additional paid-in capital | -90,295 |
Fair value mark to market adjustment for derivatives | 1,081,942 |
Long-term derivative liabilities at Mar. 31, 2015 | 234,539 |
Less: current portion at Mar. 31, 2015 | -1,349,763 |
Derivative liabilities at Mar. 31, 2015 | $1,584,302 |
Derivative_Liabilities_Narrati
Derivative Liabilities Narrative (Details) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Derivative Liabilities Narrative Details | |
Derivative interest expenses | $13,884 |
Fair_value_at_the_commitment_a
Fair value at the commitment and re-measurement dates assumptions (Details) | 3 Months Ended |
Mar. 31, 2015 | |
Commitment Date | |
Expected dividends: | 0.00% |
Expected volatility minimum | 218.07% |
Expected volatility maximum | 653.42% |
Expected term (years): | 0.76 - 1 years |
Risk free interest rate minimum | 0.18% |
Risk free interest rate maximum | 0.22% |
Remeasurement Date | |
Expected dividends | 0.00% |
Expected volatility minimum | 434.44% |
Expected volatility maximum | 672.48% |
Expected term (years) | 0.083-1.35 years |
Risk free interest rate minimum | 0.17% |
Risk free interest rate maximum | 0.28% |
NOTE_PAYABLE_RELATED_PARTY_Det
NOTE PAYABLE - RELATED PARTY (Details) (USD $) | Mar. 31, 2015 |
Note Payable Related Party Details | |
Loan from President | $75,000 |
EQUITY_TRANSACTIONS_Narrative_
EQUITY TRANSACTIONS (Narrative) - Common Stock (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Feb. 26, 2015 | Jan. 14, 2015 | |
Common Stock Details | |||
Issued shares to marketing company one for investment IR | 150,000 | ||
Issued shares to marketing company two for investment IR | 600,000 | ||
Value of shares issued to marketing companies | $3,750 | ||
Issued shares to CEO as bonus | 300,000,000 | ||
Value of shares issued to CEO | 270,000 | ||
Issued shares in conversion of convertible debt and a portion of accrued interest | 366,137,550 | ||
Value of shares in conversion of convertible debt and a portion of accrued interest | $56,766 |
SUBSEQUENT_EVENTS_Details
SUBSEQUENT EVENTS (Details) (USD $) | 1 Months Ended |
4-May-15 | |
Subsequent Events Details | |
Issued shares in conversion of convertible debt and a portion of accrued interest | 332,723,021 |
Value of shares in conversion of convertible debt and a portion of accrued interest | $14,048 |