Citadel Exploration (COIL) 10-Q 15 Aug 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	6 Months Ended
	Jun. 30, 2016	Aug. 15, 2016
Document And Entity Information
Entity Registrant Name	Citadel Exploration, Inc.
Entity Central Index Key	1,482,075
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float		$ 0
Entity Common Stock, Shares Outstanding		38,814,000
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,016

CONSOLIDATED BALANCE SHEETS (Un

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Current assets:
Cash	$ 38,425	$ 146,555
Other receivable	1,209	19,342
Prepaid expenses	91,663	29,870
Product inventory	4,881	4,881
Total current assets	136,178	200,648
Deposits	9,900	9,900
Restricted cash	245,000	245,000
Oil and gas properties, successful efforts basis	5,579,945	4,173,307
Fixed asset, net	10,119	13,860
Total assets	5,981,142	4,642,715
Current liabilities:
Accounts payable and accrued payables	1,552,647	1,047,169
Accrued interest payable	349,589	227,945
Notes payable, net	564,202	525,034
Notes payable, related party, net		3,500,000
Total current liabilities	2,466,438	5,300,148
Asset retirement obligation	201,455	198,279
Production payment liability	300,000	300,000
Total liabilities	2,967,893	5,798,427
Stockholders' equity:
Common stock, $0.001 par value, 100,000,000 shares authorized, 38,814,000 and 38,814,000 shares issued outstanding as of June 30, 2016 and December 31, 2015, respectively	38,814	38,814
Series A Preferred stock	4,925,000
Additional paid-in capital	5,690,560	5,690,560
Accumulated deficit	(7,641,125)	(6,885,086)
Total stockholders' equity	3,013,249	(1,155,712)
Total liabilities and stockholders' equity	$ 5,981,142	$ 4,642,715

CONSOLIDATED BALANCE SHEETS (U3

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, issued	38,814,000	38,814,000
Common stock, outstanding	38,814,000	38,814,000

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Statement [Abstract]
Revenue	$ 6,006	$ 40,112	$ 26,762	$ 60,141
Operating expenses:
Lease operating expense	30,326	14,504	110,084	26,162
General and administrative	61,673	131,828	131,057	187,714
Depreciation, depletion and amortization	4,110	3,835	9,151	7,778
Professional fees	91,639	6,357	138,259	18,236
Executive compensation	125,652	162,088	261,699	324,177
Total operating expenses	313,400	318,612	650,250	563,961
Loss from operations	(307,394)	(278,500)	(623,488)	(503,820)
Other expenses:
Loss - contingency				(87,000)
Loss - note payable settlement				(26,080)
Interest expense	(14,245)	(16,358)	(132,553)	(36,266)
Total other expenses	(14,245)	(16,358)	(132,553)	(149,316)
Loss before provision for income taxes	(321,639)	(294,858)	(756,039)	(653,136)
Provision for income taxes
Net loss	$ (321,639)	$ (294,858)	$ (756,039)	$ (653,135)
Weighted average number of common shares - outstanding - basic and diluted	34,937,077	32,814,000	34,937,077	32,105,436
Net loss per share - basic and diluted	$ (0.01)	$ (0.01)	$ (0.02)	$ (0.02)

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
OPERATING ACTIVITIES
Net loss	$ (756,039)	$ (653,135)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, amortization and accretion	9,151	7,778
Amortization of debt discount	1,832	7,467
Loss on settlement of note payable		26,080
Stock based compensation expense		74,997
Loss contingency		87,000
Changes in operating assets and liabilities:
Increase/(Decrease) in other receivable	18,133	1
Decrease in prepaid expenses	(61,793)	25,827
Increase in deposits		(105,000)
Increase in accounts payable and accrued payables	505,479	98,319
Increase in accrued interest payable	121,644	67,163
Net cash used in operating activities	(161,593)	(363,499)
INVESTING ACTIVITIES
Oil and gas properties	(1,408,873)	(176,762)
Net cash used in investing activities	(1,408,873)	(176,762)
FINANCING ACTIVITIES
Proceeds from sale of common stock, net of costs		107,836
Proceeds from sale of preferred stock, net of costs	1,425,000
Proceeds from notes payable	68,736	200,000
Repayments of notes payable	(31,400)	(10,230)
Net cash provided by financing activities	1,462,336	297,606
NET CHANGE IN CASH	(108,130)	(242,655)
CASH AT BEGINNING OF YEAR	146,555	270,298
CASH AT END OF YEAR	38,425	27,641
SUPPLEMENTAL INFORMATION:
Interest paid		(651)
Income taxes paid
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Issuance of preferred stock for settlement of note payable - related party	3,500,000
Issuance of common stock for settlement of notes payable and accrued interest		$ 25,494

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2016
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The interim condensed consolidated financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these interim condensed consolidated financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2015 and notes thereto included in the Company’s 10-K annual report and all amendments. The Company follows the same accounting policies in the preparation of interim reports. Results of operations for the interim period are not indicative of annual results. Principles of consolidation The condensed consolidated financial statements include the accounts of Citadel Exploration, Inc., Citadel Exploration, LLC and Citadel Kern Bluff, LLC, the Company’s wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. Citadel Exploration, Inc., Citadel Exploration, LLC and Citadel Kern Bluff, LLC will be collectively referred herein to as the “Company”. Nature of operations Currently, the Company is focused on the acquisition and development of oil and gas properties in California. Revenue Recognition Sales of oil are recognized when the product has been delivered to a custody transfer point, persuasive evidence of a sales arrangement exists, the rights and responsibility of ownership pass to the purchaser upon delivery, collection of revenue from the sale is reasonably assured, and the sales price is fixed or determinable. Impairment The Company evaluates the impairment of its proved oil and natural gas properties on a field-by-field basis whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The carrying values of proved properties are reduced to fair value when the expected undiscounted future cash flows are less than net book value. The fair values of proved properties are measured using valuation techniques consistent with the income approach, converting future cash flows to a single discounted amount. Significant inputs used to determine the fair values of proved properties include estimates of: (i) reserves; (ii) future operating and development costs; (iii) future commodity prices; and (iv) a market-based weighted average cost of capital rate. Use of estimates The preparation of condensed consolidated financial statements in conformity with generally accepted accounting principles 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 condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates. Fair value of financial instruments The carrying value of the Company’s financial instruments, including cash, due to shareholders/related parties and accounts and other payables approximate their fair values due to the immediate or short-term maturity of these instruments. It is management’s opinion that the Company is not exposed to significant interest, price or credit risks arising from these financial instruments. Cash and cash equivalents The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. The Company had no cash equivalents as of June 30, 2016 and December 31, 2015. Earnings per share The Company follows ASC Topic 260 to account for the earnings per share. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation. Recent pronouncements The Company has evaluated the recent accounting pronouncements through June 30, 2016 and believes that none of them will have a material effect on the company’s condensed consolidated financial statements.

GOING CONCERN

GOING CONCERN	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
GOING CONCERN	NOTE 2 – GOING CONCERN The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. Since its inception, the Company has been engaged substantially in financing activities and developing its business plan and incurring startup costs and expenses. As a result, the Company incurred an accumulated deficit in the amount of $7,641,125 as of June 30, 2016. In addition, the Company’s development activities since inception have been financially sustained through debt and equity financing. The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating revenues. These condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

OIL AND GAS PROPERTIES, BUILDIN

OIL AND GAS PROPERTIES, BUILDINGS AND EQUIPMENT	6 Months Ended
	Jun. 30, 2016
Extractive Industries [Abstract]
OIL AND GAS PROPERTIES, BUILDINGS AND EQUIPMENT	NOTE 3 – OIL AND GAS PROPERTIES Oil and natural gas properties, buildings and equipment consist of the following: June December Oil and Natural Gas: Proved properties $ 2,598,757 $ 1,734,223 Unproved properties 2,988,945 2,444,608 5,587,702 4,178,831 Less accumulated depreciation, depletion, and amortization (7,757 ) (5,524 ) $ 5,579,945 $ 4,173,307

RESTRICTED CASH

RESTRICTED CASH	6 Months Ended
	Jun. 30, 2016
Receivables [Abstract]
RESTRICTED CASH	NOTE 4 – RESTRICTED CASH Restricted cash consists of three bonds totaling $245,000. The bonds are required in the normal course of business in the oil and gas industry. The two bonds totaling $45,000 were purchased in November 2013. A third bond totaling $200,000 was purchased in August 2015 following the acquisition of the Kern Bluff Oil Field. This was a blanket bond, which will cover 50 wells. As such, the Company is in the process of releasing the first two bonds totaling $45,000.

DEPOSITS

DEPOSITS	6 Months Ended
	Jun. 30, 2016
Banking and Thrift [Abstract]
DEPOSITS	NOTE 5 – DEPOSITS The Company had deposits at December 31, 2015 and June 30, 2016 totaling $9,900.

NOTES PAYABLE

NOTES PAYABLE	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
NOTES PAYABLE	NOTE 6 – NOTES PAYABLE Notes payable consists of the following: June December Note payable to an entity for the financing of insurance premiums, unsecured; 7.75% interest, due April 2017 $ 58,264 $ 17,263 Two notes payable to investors, unsecured, 10% interest; due September 30, 2016 $ 500,000 $ 500,000 Debt discount for 500,000 warrants issued relating to notes payable 5,938 7,771 Notes Payable - Total $ 564,202 $ 525,034 Notes Payable, Related Party Term loan with a related party investor executed July 30, 2015, unsecured, 10% interest; due July 30, 2016 $ — $ 3,500,000 Total – Notes Payable & Notes Payable, Related Party $ 564,202 $ 3,970,869 During the quarter ended March 31, 2016, the Company converted the $3,500,000 related party note payable with 175,000 of preferred shares valued at $3,500,000. Interest expense on the note payable was $91,300. In March 2014, the Company closed on a $500,000 bridge loan from two individuals. These notes have a 180 day term and bear interest of 10%. The $500,000 of notes are due on October 31, 2015. Additionally, the investors received 500,000 warrants to purchase the Company’s stock at $0.34 per share for a term of two years. In December of 2015, the maturity date of this bridge loan was extended until September 30, 2016, in return the exercise price of the warrant was reduced to $0.20 and the term of the warrants also extended to until September 30, 2016.

STOCKHOLDERS' EQUITY (DEFICIT)

STOCKHOLDERS' EQUITY (DEFICIT)	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
STOCKHOLDERS' EQUITY (DEFICIT)	NOTE 7 – STOCKHOLDERS’ EQUITY (DEFICIT) The Company is authorized to issue 100,000,000 shares of its $0.001 par value common stock. In March of 2015, the Company approved the issuance of 1,400,000 common stock shares for the conversion of a $100,000 promissory note, plus accrued interest of $2,164 and an additional capital investment of $107,836, all at $0.15 per share. In March of 2015, the Company issued 25,000 shares of common stock to settle the stock payable of $2,250 recorded as of December 31, 2014. In July of 2015, the Company issued 6,000,000 shares of common stock and paid $1,900,000 in cash for the Kern Bluff Oil Field. The Company had paid a $100,000 deposit on the property in May of 2015, upon execution of a letter of intent (LOI) on the field. In March of 2016, the Company approved the issuance of up to 250,000 shares of Series A Convertible Participating Preferred Stock. The Company issued 175,000 shares of Series A Convertible Participating Preferred Stock to convert its $3,500,000 related party note payable to preferred stock. In addition, the Company has sold 21,250 shares of Series A Convertible Participating Preferred Stock for cash in the amount of $425,000 through March 31, 2016. In June of 2016, the Company sold 55,000 shares of Series A Convertible Participating Preferred Stock for cash in the amount of $1,100,000.

STOCK OPTION PLAN

STOCK OPTION PLAN	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
STOCK OPTION PLAN	NOTE 8 – STOCK OPTION PLAN Under the Stock Option Plan approved by Board of Directors on September 1, 2012 (the “2012 Stock Option”), the Company issued $264,494 worth of stock based compensation, or a total of 4,800,000 shares of options through December 31, 2014 expense. On July 29, 2015 as approved by the Board of Directors, the Company granted 4,700,000 stock options to three members of management and to one member of the Board of Directors. These options vest over a three year period, at $0.15 per share for a term of seven years. The total fair value of these options at the date of grant was estimated to be $376,490 and was determined using the Black Scholes option pricing model with an expected life of 7 years, risk free interest rate of 1.872%, dividend yield of 0%, and expected volatility of 333%. During the 3 month period ended September 30, 2015, $152,198 was recorded as a stock based compensation expense. The following is a summary of the status of all of the Company’s stock options as of March 31, 2016 and changes during the period ended on that date: Number Weighted-Average Weighted-Average Outstanding at June 30, 2016 9,500,000 $ 0.20 4.76 — $ — — Exercised — $ — — Cancelled — $ — — Outstanding at June 30, 2016 9,500,000 $ 0.20 4.76 Exercisable at June 30, 2016 5,964,000 $ 0.21 4.05

WARRANTS

WARRANTS	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
WARRANTS	NOTE 9 – WARRANTS In September of 2014, the 500,000 warrants issued on November 15, 2012 and 100,000 warrants issued in September 2013 were exercised early at a reduced price of $0.34 per share. The following is a summary of the status of all of the Company’s stock warrants as of March 31, 2016 and changes during the period ended on that date: Number Weighted-Average Weighted-Average Outstanding at March 31, 2016 500,000 $ 0.20 0.25 Granted — $ 0.00 — Exercised — $ 0.00 — Cancelled — $ 0.00 — Total Outstanding at March 31, 2016 500,000 $ 0.20 0.25 Exercisable at March 31, 2016 500,000 $ 0.20 0.25

SUMMARY OF SIGNIFICANT ACCOUN15

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2016
Accounting Policies [Abstract]
Basis of presentation	Basis of presentation The interim condensed consolidated financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these interim condensed consolidated financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2015 and notes thereto included in the Company’s 10-K annual report and all amendments. The Company follows the same accounting policies in the preparation of interim reports. Results of operations for the interim period are not indicative of annual results.
Principles of consolidation	Principles of consolidation The condensed consolidated financial statements include the accounts of Citadel Exploration, Inc., Citadel Exploration, LLC and Citadel Kern Bluff, LLC, the Company’s wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. Citadel Exploration, Inc., Citadel Exploration, LLC and Citadel Kern Bluff, LLC will be collectively referred herein to as the “Company”.
Nature of operations	Nature of operations Currently, the Company is focused on the acquisition and development of oil and gas properties in California.
Revenue recognition	Revenue Recognition Sales of oil are recognized when the product has been delivered to a custody transfer point, persuasive evidence of a sales arrangement exists, the rights and responsibility of ownership pass to the purchaser upon delivery, collection of revenue from the sale is reasonably assured, and the sales price is fixed or determinable.
Impairment	Impairment The Company evaluates the impairment of its proved oil and natural gas properties on a field-by-field basis whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The carrying values of proved properties are reduced to fair value when the expected undiscounted future cash flows are less than net book value. The fair values of proved properties are measured using valuation techniques consistent with the income approach, converting future cash flows to a single discounted amount. Significant inputs used to determine the fair values of proved properties include estimates of: (i) reserves; (ii) future operating and development costs; (iii) future commodity prices; and (iv) a market-based weighted average cost of capital rate.
Use of estimates	Use of estimates The preparation of condensed consolidated financial statements in conformity with generally accepted accounting principles 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 condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates.
Fair value of financial instruments	Fair value of financial instruments The carrying value of the Company’s financial instruments, including cash, due to shareholders/related parties and accounts and other payables approximate their fair values due to the immediate or short-term maturity of these instruments. It is management’s opinion that the Company is not exposed to significant interest, price or credit risks arising from these financial instruments.
Cash and Cash Equivalents	Cash and cash equivalents The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. The Company had no cash equivalents as of June 30, 2016 and December 31, 2015.
Earnings per share	Earnings per share The Company follows ASC Topic 260 to account for the earnings per share. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.
Recent pronouncements	Recent pronouncements The Company has evaluated the recent accounting pronouncements through June 30, 2016 and believes that none of them will have a material effect on the company’s condensed consolidated financial statements.

OIL AND GAS PROPERTIES, BUILD16

OIL AND GAS PROPERTIES, BUILDINGS AND EQUIPMENT (Tables)	6 Months Ended
	Jun. 30, 2016
Extractive Industries [Abstract]
The costs capitalized in oil and gas properties	Oil and natural gas properties, buildings and equipment consist of the following: June December Oil and Natural Gas: Proved properties $ 2,403,287 $ 1,734,223 Unproved properties 3,184,415 2,444,608 5,587,702 4,178,831 Less accumulated depreciation, depletion, and amortization (7,757 ) (5,524 ) $ 5,579,945 $ 4,173,307

NOTES PAYABLE (Tables)

NOTES PAYABLE (Tables)	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
Notes payable consists of the following at:	Notes payable consists of the following: June December Note payable to an entity for the financing of insurance premiums, unsecured; 7.75% interest, due April 2017 $ 58,264 $ 17,263 Two notes payable to investors, unsecured, 10% interest; due September 30, 2016 $ 500,000 $ 500,000 Debt discount for 500,000 warrants issued relating to notes payable 5,938 7,771 Notes Payable - Total $ 564,202 $ 525,034 Notes Payable, Related Party Term loan with a related party investor executed July 30, 2015, unsecured, 10% interest; due July 30, 2016 $ — $ 3,500,000 Total – Notes Payable & Notes Payable, Related Party $ 564,202 $ 3,970,869

STOCK OPTION PLAN (Tables)

STOCK OPTION PLAN (Tables)	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
Summary of the status of all of the Company's stock options	The following is a summary of the status of all of the Company’s stock options as of March 31, 2016 and changes during the period ended on that date: Number Weighted-Average Weighted-Average Outstanding at June 30, 2016 9,500,000 $ 0.20 4.76 — $ — — Exercised — $ — — Cancelled — $ — — Outstanding at June 30, 2016 9,500,000 $ 0.20 4.76 Exercisable at June 30, 2016 5,964,000 $ 0.21 4.05

WARRANTS (Tables)

WARRANTS (Tables)	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
Summary of the status of all of the Company's stock warrants	The following is a summary of the status of all of the Company’s stock warrants as of March 31, 2016 and changes during the period ended on that date: Number Weighted-Average Weighted-Average Outstanding at March 31, 2016 500,000 $ 0.20 0.25 Granted — $ 0.00 — Exercised — $ 0.00 — Cancelled — $ 0.00 — Total Outstanding at March 31, 2016 500,000 $ 0.20 0.25 Exercisable at March 31, 2016 500,000 $ 0.20 0.25

OIL AND GAS PROPERTIES, BUILD20

OIL AND GAS PROPERTIES, BUILDINGS AND EQUIPMENT (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Oil and Natural Gas:
Proved properties	$ 2,598,757	$ 1,734,223
Unproved properties	2,988,945	2,444,608
Oil and Natural Gas Total	5,587,702	4,178,831
Less accumulated depreciation, depletion, and amortization	(7,757)	(5,524)
Oil and Natural Gas, Net	$ 5,579,945	$ 4,173,307

DEPOSITS (Details Narrative)

DEPOSITS (Details Narrative) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Banking and Thrift [Abstract]
Company Deposit	$ 9,900	$ 9,900

NOTES PAYABLE (Details Narrativ

NOTES PAYABLE (Details Narrative) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Notes Payable Details Narrative
Note payable to an entity for the financing of insurance premiums, unsecured; 7.75% interest, due April 2017	$ 58,264	$ 17,263
Two notes payable to investors, unsecured, 10% interest; due September 30, 2016	500,000	500,000
Debt discount for 500,000 warrants issued relating to notes payable	5,938	7,771
Notes payable	564,202	525,034
Notes payable, related party, net		3,500,000
Total - Notes Payable & Notes Payable, Related Party	$ 564,202	$ 3,970,869

STOCK OPTION PLAN (Details)

STOCK OPTION PLAN (Details)	6 Months Ended
	Jun. 30, 2016$ / sharesshares
Number of Options
Outstanding at January 1 | shares	9,500,000
Granted | shares
Exercised | shares
Cancelled | shares
Outstanding at June 30 | shares	9,500,000
Exercisable at June 30 | shares	5,964,000
Weighted-Average Exercise Price
Outstanding at January 1 | $ / shares	$ 0.20
Granted | $ / shares	0.20
Exercised | $ / shares	0.20
Cancelled | $ / shares	0.20
Outstanding at June 30 | $ / shares	0.20
Exercisable at June 30 | $ / shares	$ 0.21
Weighted-Average Remaining Life (Years)
Outstanding at January 1	4 years 9 months 4 days
Outstanding at June 30	4 years 9 months 4 days
Exercisable at June 30	4 years 18 days

WARRANTS (Details)

WARRANTS (Details)	6 Months Ended
	Jun. 30, 2016$ / sharesshares
Number of Options
Outstanding at January 1 | shares	9,500,000
Granted | shares
Exercised | shares
Cancelled | shares
Outstanding at June 30 | shares	9,500,000
Exercisable at June 30 | shares	5,964,000
Weighted-Average Exercise Price
Outstanding at January 1 | $ / shares	$ 0.20
Granted | $ / shares	0.20
Exercised | $ / shares	0.20
Cancelled | $ / shares	0.20
Outstanding at June 30 | $ / shares	0.20
Exercisable at June 30 | $ / shares	$ 0.21
Weighted-Average Remaining Life (Years)
Outstanding at January 1	4 years 9 months 4 days
Outstanding at June 30	4 years 9 months 4 days
Exercisable at June 30	4 years 18 days
Warrant [Member]
Number of Options
Outstanding at January 1 | shares	500,000
Granted | shares
Exercised | shares
Cancelled | shares
Outstanding at June 30 | shares	500,000
Exercisable at June 30 | shares	500,000
Weighted-Average Exercise Price
Outstanding at January 1 | $ / shares	$ 0.20
Granted | $ / shares
Exercised | $ / shares
Cancelled | $ / shares	0
Outstanding at June 30 | $ / shares	0.20
Exercisable at June 30 | $ / shares	$ 0.20
Weighted-Average Remaining Life (Years)
Outstanding at January 1	3 months
Outstanding at June 30	3 months
Exercisable at June 30	3 months