Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 13, 2015 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2015 | |
Trading Symbol | fare | |
Entity Registrant Name | World Moto, Inc. | |
Entity Central Index Key | 1,492,151 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 842,710,260 | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well Known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Current Assets | ||
Cash and cash equivalents | $ 26,660 | $ 169,265 |
Prepaid expenses and other current assets | 31,217 | 20,741 |
Inventory | 7,160 | 2,986 |
Total current assets | 65,037 | 192,992 |
Property and equipment, net of accumulated depreciation | 17,660 | 24,215 |
Deferred financing costs, net of accumulated amortization | 41,289 | 28,867 |
Other assets | 9,981 | 10,984 |
TOTAL ASSETS | 133,967 | 257,058 |
Current Liabilities | ||
Accounts payable and accrued expenses | 489,895 | 211,336 |
Convertible notes payable, net of discount of $610,208 and $779,573, respectively | 262,435 | 274,123 |
Derivative liabilities | 1,063,350 | 1,256,159 |
Short-term debt - related party | 36,479 | 45,707 |
Unearned revenues | 55,865 | 59,056 |
Total current liabilities | $ 1,908,024 | $ 1,846,381 |
Contingencies and Commitments | ||
Stockholders' Deficit | ||
Preferred stock, $0.0001 par value; 50,000,000 shares authorized; no shares issued and outstanding | $ 0 | $ 0 |
Common stock, $0.0001 par value; 2,000,000,000 shares authorized 712,157,315 and 395,369,204 shares issued and outstanding, respectively | 71,215 | 39,536 |
Additional paid-in capital | 3,962,624 | 1,752,443 |
Accumulated deficit | (5,785,486) | (3,365,780) |
Accumulated other comprehensive loss | (22,410) | (15,522) |
Total stockholders' deficit | (1,774,057) | (1,589,323) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 133,967 | $ 257,058 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Convertible notes payable, discount | $ 610,208 | $ 779,573 |
Preferred stock shares par value | $ 0.0001 | $ 0.0001 |
Preferred stock shares authorized | 50,000,000 | 50,000,000 |
Preferred Stock, Shares Issued | ||
Preferred Stock, Shares Outstanding | ||
Common stock shares par value | $ 0.0001 | $ 0.0001 |
Common stock shares authorized | 2,000,000,000 | 2,000,000,000 |
Common Stock, Shares, Issued | 712,157,315 | 395,369,204 |
Common Stock, Shares, Outstanding | 712,157,315 | 395,369,204 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenues | $ 0 | $ 0 | $ 0 | $ 0 |
Operating expenses | ||||
Research & development | 106,582 | 0 | 331,056 | 247,696 |
General and administrative | 223,972 | 242,325 | 579,288 | 634,696 |
Total operating expense | 330,554 | 242,325 | 910,344 | 882,392 |
Loss from operations | (330,554) | (242,325) | (910,344) | (882,392) |
Other income (expense): | ||||
Interest expense | (845,186) | (201,258) | (1,688,335) | (287,995) |
Interest income | 0 | 0 | 0 | 6 |
Change in fair value of derivative liabilities | (117,484) | 1,586 | 77,317 | (45,476) |
Gain on settlement of debt | 107,974 | 0 | 107,974 | 0 |
Foreign exchange (gain) loss | 2,837 | 7,012 | (6,318) | 7,194 |
Total other income (expense) | (851,859) | (192,660) | (1,509,362) | (326,271) |
Net loss | (1,182,413) | (434,985) | (2,419,706) | (1,208,663) |
Other comprehensive income (loss): | ||||
Foreign currency translations | 2,267 | (5,273) | (6,888) | (10,604) |
Comprehensive loss | $ (1,180,146) | $ (440,258) | $ (2,426,594) | $ (1,219,267) |
Net loss per common share - basic and diluted | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted average common shares outstanding - basic and diluted | 532,648,145 | 378,038,740 | 491,009,507 | 378,035,047 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (2,419,706) | $ (1,208,663) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 6,555 | 5,462 |
Non-cash interest expense from derivative liability in excess of face value of convertible notes | 457,848 | 0 |
Amortization of debt discount and deferred financing costs | 1,006,648 | 270,576 |
Gain on settlement of debt | (107,974) | 0 |
Change in fair value of derivative liabilities | (77,317) | 45,476 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | (9,473) | (5,080) |
Inventory | (4,174) | (24,974) |
Accounts payable and accrued expenses | 404,865 | 237,182 |
Unearned revenues | (3,191) | 24,980 |
Net cash used in operating activities | (745,919) | (655,041) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property and equipment | 0 | (313) |
Net cash used in investing activities | 0 | (313) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from convertible notes payable, net of financing costs | 619,430 | 534,500 |
Related party advances (repayments) | (9,228) | 37,008 |
Net cash provided by financing activities | 610,202 | 571,508 |
EFFECT OF FOREIGN CURRENCY TRANSLATIONS | (6,888) | (10,604) |
Net decrease in cash | (142,605) | (94,450) |
Cash at beginning of period | 169,265 | 179,132 |
Cash at end of period | 26,660 | 84,682 |
Cash paid for: | ||
Income taxes | 0 | 0 |
Interest | 0 | 0 |
NON CASH INVESTING AND FINANCING ACTIVITIES: | ||
Shares issued for deferred finance cost | 0 | 46,584 |
Shares issued for conversion of debt | 869,811 | 0 |
Reclassification of fair value of derivatives from liability to equity | 1,340,300 | 0 |
Fair value of conversion feature of convertible debt classified as derivative liabilities | $ 1,207,424 | $ 552,701 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Text Block] | NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business World Moto, Inc. (the “Company”) was incorporated in the State of Nevada on March 24, 2008 under the name Net Profits Ten Inc. The original purpose of the Company was to market and distribute user-friendly interactive yearbook software for the military. The Company was reclassified as a shell company until the completion of its acquisition of the World Moto Assets, which was consummated on November 14, 2012. Effective November 12, 2012, the Company amended its Articles of Incorporation to change its name from “Net Profits Ten Inc.” to “World Moto, Inc.” On January 30, 2013, World Moto, Inc. established two wholly owned subsidiaries that were incorporated in the State of Nevada. World Moto Technologies, Inc. and World Moto Holdings, Inc. were both established, but have no activity to report to date. On February 4, 2013, World Moto Technologies Ltd, a wholly owned subsidiary of the Company, was organized under the laws of the Kingdom of Thailand and the name of this company was later changed to World Moto Co., Ltd. (“WM Co. Thailand”). WM Thailand represents our operating entity for the purposes of research and development in the Southeast Asia region. Basis of Presentation The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information in accordance with Securities and Exchange Commission ("SEC") Regulation S-X rule 8-03 and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's last Annual Report filed with the SEC on Form 10-K for the year ended December 31, 2014. In the opinion of management, the unaudited consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include normal recurring adjustments, necessary to present fairly the financial position as of September 30, 2015 and the results of operations and cash flows for the periods then ended. The financial data and other information disclosed in these notes to the interim consolidated financial statements related to the period are unaudited. The results for the three-month and nine-month periods ended September 30, 2015 are not necessarily indicative of the results to be expected for any subsequent quarters or for the entire year ending December 31, 2015. Notes to the unaudited interim consolidated financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year as reported in the Form 10-K have been omitted. Principal of Consolidation The consolidated financial statements include the accounts of World Moto Technologies, Inc., World Moto Holdings, Inc., and World Moto Co. Ltd, all 100% owned subsidiaries. All significant intercompany balances and transactions have been eliminated upon consolidation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue 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 maturity of three months or less at the time of issuance to be cash equivalents. Foreign Currency Translation The functional currency of our subsidiary is the Thai Baht. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income (loss) for the respective periods. For financial reporting purposes, the financial statements of the subsidiary are translated into the Company’s reporting currency, United States Dollars (“USD”). Asset and liability accounts are translated using the closing exchange rate in effect at the balance sheet date, equity account and dividend are translated using historical exchange rates and income and expense accounts are translated using the average exchange rate prevailing during the reporting period. Adjustments resulting from the translation, if any, are included in accumulated other comprehensive income (loss) in stockholder’s equity (deficit). Long-Lived Assets Property and equipment Property and equipment are recorded at cost. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method of 3 years. Software The Company capitalizes software acquisition and development costs incurred during the software application development stage. The software application development stage is characterized by software design and configuration activities, coding, testing and installation. Training and maintenance costs are expensed as incurred, while upgrades and enhancements are capitalized if it is probable that such expenditures will result in additional functionality. Capitalized software acquisition and development costs, once placed in service, are amortized using the straight-line method over the estimated useful life of 3 to 10 years. Capitalized software acquisition and development costs subject to amortization are carried at cost less accumulated amortization. Patents Patents are initially measured based on their fair values. Patents are being amortized on the straight-line method over the estimated useful life of 10 to 20 years. Management evaluates the recoverability of the Company’s property and equipment including patent development costs when events or circumstances indicate a potential impairment exists. The Company considers certain events and circumstances in determining whether the carrying value of identifiable property and equipment may not be recoverable including, but not limited to: significant changes in performance relative to expected operating results; significant changes in the use of the assets; significant negative industry or economic trends; and changes in the business strategy. In determining if impairment exists, the Company estimates the undiscounted cash flows to be generated from the use and ultimate disposition of these assets. If impairment is indicated based on a comparison of the assets' carrying values and the undiscounted cash flows, the impairment loss is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. Income Taxes The Company uses the asset and liability method in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and income tax carrying amounts 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. The Company reviews deferred tax assets for a valuation allowance based upon whether it is more likely than not that the deferred tax asset will be fully realized. A valuation allowance, if necessary, is provided against deferred tax assets, based upon management’s assessment as to their realization. Fair Value Measurement The Company values its derivative instruments under FASB ASC 820 which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. Fair value is 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 (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). The three levels of the fair value hierarchy are as follows: Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities. Level 2 - Valuations for assets and liabilities that can be obtained from readily available pricing sources via independent providers for market transactions involving similar assets or liabilities. The Company’s principal markets for these securities are the secondary institutional markets, and valuations are based on observable market data in those markets. Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The Company uses Level 3 to value its derivative instruments. The following table sets forth by level with the fair value hierarchy the Company’s financial assets and liabilities measured at fair value on September 30, 2015 and December 31, 2014 respectively. Level 1 Level 2 Level 3 Total Derivative liability September 30, 2015 $ – $ – $ 1,063,350 $ 1,063,350 December 31, 2014 $ – $ – $ 1,256,159 $ 1,256,159 Revenue Recognition The Company recognizes revenue only when all of the following criteria have been met: Persuasive evidence of an arrangement exists; Delivery has occurred or services have been rendered; The fee for the arrangement is fixed or determinable; and Collectability is reasonably assured. Persuasive Evidence of an Arrangement – The Company documents all terms of an arrangement in a written contract signed by the customer prior to recognizing revenue. Delivery Has Occurred or Services Have Been Performed – The Company performs all services or delivers all products prior to recognizing revenue. Monthly services are considered to be performed ratably over the term of the arrangement. Professional consulting services are considered to be performed when the services are complete. Equipment is considered delivered upon delivery to a customer’s designated location. The Fee for the Arrangement Is Fixed or Determinable – Prior to recognizing revenue, a customer’s fee is either fixed or determinable under the terms of the written contract. Fees for most monthly services, professional consulting services, and equipment sales and rentals are fixed under the terms of the written contract. Fees for certain monthly services, including certain portions of networking, storage, and content distribution and caching services, are variable based on an objectively determinable factor such as usage. Those factors are included in the written contract such that the customer’s fee is determinable. The customer’s fee is negotiated at the outset of the arrangement and is not subject to refund or adjustment during the initial term of the arrangement. Collectability Is Reasonably Assured – The Company determines that collectability is reasonably assured prior to recognizing revenue. Collectability is assessed on a customer by customer basis based on criteria outlined by management. New customers are subject to a credit review process, which evaluates the customer’s financial position and ultimately its ability to pay. The Company does not enter into arrangements unless collectability is reasonably assured at the outset. Existing customers are subject to ongoing credit evaluations based on payment history and other factors. If it is determined during the arrangement that collectability is not reasonably assured, revenue is recognized on a cash basis. Franchise Fee Revenue Revenues from licensees include a royalty based on a percent of sales, and may include initial fees. Continuing royalties are recognized in the period earned. Initial fees are recognized upon granting of a new franchise term, which is when the Company has performed substantially all initial services required by the franchise arrangement and after the franchisee commences operations. Additionally, the first twelve months of operations are royalty free for the franchisee. Stock-Based Compensation The Company expenses the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of such instruments over the service period. Equity instruments issued to parties other than employees for acquiring goods or services are recorded at either the fair value of the consideration received or the fair value of the instruments issued in exchange for such services, whichever is more reliably measurable. Subsequent Events The Company evaluated subsequent events through the date when financial statements are issued for disclosure. Recent Accounting Pronouncements The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
GOING CONCERN
GOING CONCERN | 9 Months Ended |
Sep. 30, 2015 | |
GOING CONCERN [Text Block] | NOTE 2 – GOING CONCERN The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. However, the Company has an accumulated deficit of $5,785,486 as of September 30, 2015, has limited liquidity, and has not established a reliable source of revenues sufficient to cover operating costs over an extended period of time. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses. The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
UNEARNED REVENUES
UNEARNED REVENUES | 9 Months Ended |
Sep. 30, 2015 | |
UNEARNED REVENUES [Text Block] | NOTE 3 – UNEARNED REVENUES On December 2, 2013, WM Co. Thailand entered into a Purchase and Licensing Agreement (the "PL Agreement") with Mobile Advertising Ventures Ltd. ("MAV"). Pursuant to the terms of the PL Agreement, MAV will purchase 10 initial "Wheelies" from WM Co. Thailand at a total purchase price of $35,000, and will have an option to purchase an additional 190 Wheelies at a purchase price of $3,500 per unit. WM Co. Thailand also grants a non-exclusive license to MAV for the use of its software in connection with the operation of the Wheelies in consideration for a fee based on net revenue per quarter from advertising sales relating to the use of the Wheelies. The Company received $35,000 from MAV before December 31, 2013 and has been recorded as unearned revenues. On March 10, 2014, the Company entered into a Fleet Franchise Agreement ("the Franchise Agreement") with Mobile Advertising Ventures, Ltd. ("MAV"). MAV paid the Company $20,865 for the right to utilize the Yes software and all other trademarks of the Company, including but not limited to "Yes", "World Moto" and "Wheelies" (collectively, the "Marks") in the Federal Territory of Kuala Lumpur, Malaysia. Initial training has been completed for the Franchisee; however, the Franchisee has not begun operations. This revenue will be reclassified as earned when MAV completes its first sale using the Yes software. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2015 | |
RELATED PARTY TRANSACTIONS [Text Block] | NOTE 4 – RELATED PARTY TRANSACTIONS At September 30, 2015 and December 31, 2014, the Company had short-term debt of $36,479 and $45,707, respectively, due to one of its majority shareholders. On July 29, 2015, the Company borrowed an additional $6,890 and repaid $25,940 of related party debt. The loans are for six months and mature beginning November 30, 2015. The loans are accruing interest at a rate of 0%. |
CONVERTIBLE NOTES PAYABLE
CONVERTIBLE NOTES PAYABLE | 9 Months Ended |
Sep. 30, 2015 | |
CONVERTIBLE NOTES PAYABLE [Text Block] | NOTE 5 – CONVERTIBLE NOTES PAYABLE On March 5, 2015, the Company entered into a convertible note with Redwood Management for an aggregate principal amount of $60,870 with a $4,348 original issue discount ("OID") and $12,000 in deferred financing costs for broker fees. The note earns an interest rate equal to 12% per annum and matures on March 5, 2016. The Company is obligated to make amortization payments beginning on the six month anniversary of the issuance date of the Debentures and continuing monthly thereafter. Pursuant to this note, the Company recorded a debt discount of $56,522, as a result of the embedded conversion feature being a financial derivative. The note is convertible at 60% of the lowest trading price of the Company's common stock during the 25 days prior to conversion. The Company also recorded a debt discount of $4,348 as result of the 8% original issue discount. The Company determined that the fair value of the conversion feature was $110,096 at the issuance date. The fair value of the conversion feature in excess of the principal amount allocated to the notes of $53,574 was expensed immediately as additional interest expense. During the nine months ended September 30, 2015, the Company recorded $17,941 amortization of the debt discount on the note. On March 26, 2015, the Company entered into a convertible note with Macallan Partners for an aggregate principal amount of $112,000 with a $12,000 OID and $7,500 in deferred financing costs for broker fees. The note earns an interest rate equal to 8% per annum and matures on March 31, 2016. Pursuant to this note, the Company recorded a debt discount of $100,000, as a result of the embedded conversion feature being a financial derivative. The note is convertible at 60% of the lowest trading price of the Company's common stock during the 20 trading days prior to conversion. The Company also recorded a debt discount of $12,000 as a result of the 11% original issue discount. The Company determined that the fair value of the conversion feature was $207,690 at the issuance date. The fair value of the conversion feature in excess of the principal amount allocated to the notes of $107,690 was expensed immediately as additional interest expense. On September 30, 2015, the Company settled the convertible note through the issuance of new convertible note to a third party. On September 30, 2015, the Company entered into a convertible note with Union Capital for an aggregate principal amount of $117,476. The note was issued to settle the $112,000 Macallan Partners note and $5,476 of interest accrued on the note. The note earns an interest rate equal to 8% per annum and matures on September 30, 2017. The note is convertible at 60% of the lowest trading price of the Company’s common stock during the 20 trading days prior to the date of conversion. Pursuant to this note, the Company recorded a debt discount of $111,304, as a result of the embedded conversion feature being a financial derivative. The Company determined that the fair value of the conversion feature was $111,304 at the issuance date. During the nine months ended September 30, 2015, the Company recorded $45 amortization of the debt discount on the note. On September 30, 2015, the Company entered into an additional convertible note with Union Capital for an aggregate principal amount of $64,674 with $8,674 in deferred financing costs for broker fees. The note was issued in consideration for the $56,000 prepayment premium owed as a result of settling the $112,000 Macallan Partners note. The note earns an interest rate equal to 8% per annum and matures on September 30, 2017. The note is convertible at 60% of the lowest trading price of the Company’s common stock during the 20 trading days prior to the date of conversion. Pursuant to this note, the Company recorded a debt discount of $59,718, as a result of the embedded conversion feature being a financial derivative. The Company determined that the fair value of the conversion feature was $59,718 at the issuance date. During the nine months ended September 30, 2015, the Company recorded $27 amortization of the debt discount on the note. On April 16, 2015, the Company entered into a convertible note with Union Capital for an aggregate principal amount of $71,500 with a $6,500 OID and $8,125 in deferred financing costs for broker fees. The note earns an interest rate equal to 8% per annum and matures on April 16, 2016. The note is convertible at 60% of the lowest trading price of the Company’s common stock during the 20 trading days prior to the date of conversion. Pursuant to this note, the Company recorded a debt discount of $65,000, as a result of the embedded conversion feature being a financial derivative. The Company also recorded a debt discount of $6,500 as a result of the 10% original issue discount. The Company determined that the fair value of the conversion feature was $126,021 at the issuance date. The fair value of the conversion feature in excess of the principal amount allocated to the notes of $61,021 was expensed immediately as additional interest expense. During the nine months ended September 30, 2015, the Company recorded $11,285 amortization of the debt discount on the notes. On June 24, 2015, the Company entered into a convertible note with Redwood Management for an aggregate principal amount of $60,870 with a $4,348 original issue discount ("OID") and $6,250 in deferred financing costs for broker fees. The note earns an interest rate equal to 12% per annum and matures on June 15, 2016. The note is convertible at the lower of $0.10 or 70% of the lowest traded price of the Company’s common stock during the 25 trading days prior to the date of conversion. The Company is obligated to make amortization payments beginning on the six month anniversary of the issuance date of the convertible note and continuing monthly thereafter. Pursuant to this note, the Company recorded a debt discount of $56,522, as a result of the embedded conversion feature being a financial derivative. The Company also recorded a debt discount of $4,348 as a result of the 8% original issue discount. The Company determined that the fair value of the conversion feature was $117,086 at the issuance date. The fair value of the conversion feature in excess of the principal amount allocated to the notes of $60,564 was expensed immediately as additional interest expense. During the nine months ended September 30, 2015, the Company recorded $54,661 amortization of the debt discount on the note. On July 9, 2015, the Company issued a convertible note to Redwood Management for an additional principal amount of $141,305 with a $11,305 original issue discount ("OID") and $13,500 in deferred financing costs for broker fees. The note earns an interest rate equal to 12% per annum and matures on June 15, 2016. The note is convertible at the lower of $0.10 or 70% of the lowest traded price of the Company’s common stock during the 25 trading days prior to the date of conversion. The Company is obligated to make amortization payments beginning on the six month anniversary of the issuance date of the convertible note and continuing monthly thereafter. Pursuant to this note, the Company recorded a debt discount of $130,000, as a result of the embedded conversion feature being a financial derivative. The Company also recorded a debt discount of $11,305 as a result of the 8% original issue discount. The Company determined that the fair value of the conversion feature was $307,439 at the issuance date. The fair value of the conversion feature in excess of the principal amount allocated to the notes of $194,396 was expensed immediately as additional interest expense. During the nine months ended September 30, 2015, the Company recorded $97,227 amortization of the debt discount on the note. On July 10, 2015, the Company entered into a convertible note for an aggregate principal amount of $69,000 with $4,000 in deferred financing costs for broker fees. The note is convertible any time after 180 days from issuance at 62% of the average of the lowest 3 trading prices of the Company’s common stock during the 30 trading days prior to the conversion date. The note earns an interest rate equal to 8% per annum and is due on April 30, 2016. Pursuant to this note, the Company recorded a debt discount of $53,778, as a result of the embedded conversion feature being a financial derivative. During the nine months ended September 30, 2015, the Company recorded $8,005 amortization of the debt discount on the note. On July 27, 2015, the Company entered into a convertible note for an aggregate principal amount of $45,000 with $2,250 in deferred financing costs for broker fees. The note is convertible at 62% of the lowest trading price of the Company’s common stock during the 15 trading days prior to the conversion date. The note earns an interest rate equal to 8% per annum and matures on July 27, 2016. Pursuant to this note, the Company recorded a debt discount of $35,365, as a result of the embedded conversion feature being a financial derivative. During the nine months ended September 30, 2015, the Company recorded $3,045 amortization of the debt discount on the note. On August 31, 2015, the Company entered into a convertible note for an aggregate principal amount of $44,000 with a $4,000 original issue discount ("OID"). The note is convertible at 60% of the lowest trading price of the Company’s common stock during the 20 trading days prior to the conversion date. The note earns an interest rate equal to 12% per annum and matures on August 31, 2017. Pursuant to this note, the Company recorded a debt discount of $40,000, as a result of the embedded conversion feature being a financial derivative. The Company also recorded a debt discount of $4,000 as a result of the original issue discount. The Company determined that the fair value of the conversion feature was $43,038 at the issuance date. The fair value of the conversion feature in excess of the principal amount allocated to the notes of $3,038 was expensed immediately as additional interest expense. During the nine months ended September 30, 2015, the Company recorded $1,806 amortization of the debt discount on the note. On September 3, 2015, the Company entered into a convertible note for an aggregate principal amount of $41,000 with a $4,000 original issue discount ("OID"). The note is convertible at 60% of the lowest trading price of the Company’s common stock during the 20 trading days prior to the conversion date. The note earns an interest rate equal to 10% per annum and matures on September 3, 2016. Pursuant to this note, the Company recorded a debt discount of $35,888, as a result of the embedded conversion feature being a financial derivative. The Company also recorded a debt discount of $4,000 as a result of the original issue discount. The Company determined that the fair value of the conversion feature was $39,888 at the issuance date. During the nine months ended September 30, 2015, the Company recorded $345 amortization of the debt discount on the note. As summary of value changes to the notes for the nine months ended September 30, 2015 is as follows: Carrying value of Convertible Notes at December 31, 2014 $ 274,123 Additional borrowings 715,695 Total principal 989,818 Less: conversion carrying value of convertible notes (896,747 ) Less: discount related to fair value of the embedded conversion feature (758,632 ) Less: discount related to original issue discount (31,966 ) Add: amortization of discount 959,962 Carrying value of Convertible Notes at September 30, 2015 $ 262,435 The deferred financing costs are amortized by the Company through interest expense over the life of the notes. During the nine months ended September 30, 2015, the Company recorded $51,877 amortization of the deferred financing costs. |
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES | 9 Months Ended |
Sep. 30, 2015 | |
DERIVATIVE LIABILITIES [Text Block] | NOTE 6 – DERIVATIVE LIABILITIES The Company has determined that the variable conversion prices under its convertible notes caused the embedded conversation feature to be a financial derivative. The Company may not have enough authorized common stock to settle its obligation if the note holder elects to convert the note into common shares when the trading price is lower than a certain threshold. The warrants described in Note 8 also qualify for derivative classification. The derivative instruments were valued at loan origination date, issuance date, date of debt conversion and at September 30, 2015, The fair values of the derivative liabilities related to the conversion options of these notes and warrants were estimated on the transaction dates (loan original date and date of debt conversion) using the Multinomial Lattice option pricing model, under the following assumptions: December 31, September 30, 2014 New Issuances 2015 Shares of common stock issuable upon exercise of debt 23,193,987 163,052,712 513,193,798 Estimated market value of common stock on measurement date $ 0.17 $ 0.0018 - $0.026 $ 0.0017 Exercise price $ 0.00766 - 0.01 $ 0.0009 - 0.10 $ 0.0007 - 0.10 Risk free interest rate (1) 0.04% - 0.25% 0.00% - 0.33% 0.00% - 0.33% Expected dividend yield (2) 0.00% 0.00% 0.00% Expected volatility (3) 62% - 105% 106% - 169% 153%- 170% Expected exercise term in years (4) 0.25 - 1.00 0.01 - 2.00 0.20 – 1.92 December 31, September 30, 2014 New Issuances 2015 Shares of common stock issuable upon exercise of warrants - 12,344,002 12,344,002 Estimated market value of common stock on measurement date $ - $ 0.0037 $ 0.0017 Exercise price $ - $ 0.0032 -$0.0332 $ 0.0032 -$0.0332 Risk free interest rate (1) - 1.54% 0.92% Expected dividend yield (2) - 0.00% 0.00% Expected volatility (3) - 159% 170% Expected exercise term in years (4) - 5.00 4.84 (1) The risk –free interest rate was determined by management using the one month Treasury bill yield as of the valuation dates. (2) The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the expected term of the share options and similar instruments. (3) The volatility was determined by referring to the average historical volatility of a peer group of public companies because we do not have sufficient trade history to determine our historical volatility. (4) The exercise term is the remaining contractual term of the convertible instrument at the valuation date. The change in fair values of the derivative liabilities related to the Convertible Notes for the nine months ended September 30, 2015 is summarized as: Fair value of derivatives December 31, 2014 $ 1,256,159 New issuances of conversion features 1,215,752 Conversion of derivative liabilities (1,340,300 ) Change in fair value of conversion features (70,960 ) New issuances of warrants 9,056 Change in fair value of derivative warrants (6,357 ) Fair value of derivative liabilities at September 30, 2015 $ 1,063,350 |
EQUITY TRANSACTIONS
EQUITY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2015 | |
EQUITY TRANSACTIONS [Text Block] | NOTE 7 – EQUITY TRANSACTIONS On April 9, 2015, the Company amended its Articles of Incorporation to increase the Company’s authorized shares of Common Stock from 1,000,000,000 to 2,000,000,000 shares. During the nine months ended September 30, 2015, the Company issued 316,788,111 shares of common stock for the conversion of notes payable and accrued interests in the amount of $869,881. The Company also recorded $1,340,300 as increase in additional paid-in capital from derivative liabilities as a result of the conversions. |
WARRANTS
WARRANTS | 9 Months Ended |
Sep. 30, 2015 | |
WARRANTS [Text Block] | NOTE 8 – WARRANTS On August 19, 2015, the Company issued 7 warrants to purchase an aggregate of 12,344,002 shares of the Company’s common stock to its placement agent for completed securities offerings. The warrants have a term of 5 years and exercise prices ranging from $0.003 to $0.10 per share. The warrants meet the criteria for classification as a derivative liability, with a grant date fair value of $9,056 and during the nine months ended September 30, 2015, the Company recorded a gain on the change in fair value of the derivative liability of $6,357. A summary of the changes in the Company’s common share purchase warrants for the nine months ended September 30, 2015 is presented below: Weighted Average Weighted Average Number Exercise Price Expected Life Balance, December 31, 2014 - - - Issued 12,344,002 $ 0.014 Balance, September 30, 2015 12,344,002 $ 0.014 4.84 years |
GAIN ON SETTLEMENT OF DEBT
GAIN ON SETTLEMENT OF DEBT | 9 Months Ended |
Sep. 30, 2015 | |
GAIN ON SETTLEMENT OF DEBT [Text Block] | NOTE 9 – GAIN ON SETTLEMENT OF DEBT During the nine months ended September 30, 2015, the Company recorded a gain on settlement of debt of $107,974. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2015 | |
SUBSEQUENT EVENTS [Text Block] | NOTE 10 – SUBSEQUENT EVENTS Subsequent to September 30, 2015, the Company issued 130,552,945 shares of common stock upon the conversion of $100,000 of the notes payable described in Note 5. On October 13, 2015, the Company approved a new class of preferred stock of the Company, to be known as Series A Convertible Preferred Stock. The Company is authorized to issue up to 5,000,000 shares of Series A Convertible Preferred Stock. Holders of Series A Convertible Preferred Stock shall be entitled to the number of votes equal to 51% of the total number of votes entitled to be cast on any matters requiring a stockholder vote. The shares of Series A Convertible Preferred Stock are convertible at a one to one ratio into shares of common stock. The holders of Series A Convertible Preferred Stock are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors out of legally available funds, on an as-converted basis. However, the current policy of the Board of Directors is to retain earnings, if any, for operations and growth. Upon liquidation, dissolution or winding-up, the holders of Series A Convertible Preferred Stock are entitled to share ratably in all assets that are legally available for distribution after payment in full of any preferential amounts, on an as-converted basis. On October 13, 2015, the Company issued an aggregate of 5,000,000 shares of Series A Preferred Stock, consisting of 4,000,000 shares of Series A Preferred Stock issued to Paul Giles, and 1,000,000 shares of Series A Preferred Stock issued to Chris Ziomkowski as compensation for services rendered to the Company. |
Summary of Significant Accoun16
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Nature of Business [Policy Text Block] | Nature of Business World Moto, Inc. (the “Company”) was incorporated in the State of Nevada on March 24, 2008 under the name Net Profits Ten Inc. The original purpose of the Company was to market and distribute user-friendly interactive yearbook software for the military. The Company was reclassified as a shell company until the completion of its acquisition of the World Moto Assets, which was consummated on November 14, 2012. Effective November 12, 2012, the Company amended its Articles of Incorporation to change its name from “Net Profits Ten Inc.” to “World Moto, Inc.” On January 30, 2013, World Moto, Inc. established two wholly owned subsidiaries that were incorporated in the State of Nevada. World Moto Technologies, Inc. and World Moto Holdings, Inc. were both established, but have no activity to report to date. On February 4, 2013, World Moto Technologies Ltd, a wholly owned subsidiary of the Company, was organized under the laws of the Kingdom of Thailand and the name of this company was later changed to World Moto Co., Ltd. (“WM Co. Thailand”). WM Thailand represents our operating entity for the purposes of research and development in the Southeast Asia region. |
Basis of Presentation [Policy Text Block] | Basis of Presentation The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information in accordance with Securities and Exchange Commission ("SEC") Regulation S-X rule 8-03 and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's last Annual Report filed with the SEC on Form 10-K for the year ended December 31, 2014. In the opinion of management, the unaudited consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include normal recurring adjustments, necessary to present fairly the financial position as of September 30, 2015 and the results of operations and cash flows for the periods then ended. The financial data and other information disclosed in these notes to the interim consolidated financial statements related to the period are unaudited. The results for the three-month and nine-month periods ended September 30, 2015 are not necessarily indicative of the results to be expected for any subsequent quarters or for the entire year ending December 31, 2015. Notes to the unaudited interim consolidated financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year as reported in the Form 10-K have been omitted. |
Principal of Consolidation [Policy Text Block] | Principal of Consolidation The consolidated financial statements include the accounts of World Moto Technologies, Inc., World Moto Holdings, Inc., and World Moto Co. Ltd, all 100% owned subsidiaries. All significant intercompany balances and transactions have been eliminated upon consolidation. |
Use of Estimates [Policy Text Block] | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and Cash Equivalents [Policy Text Block] | 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. |
Foreign Currency Translation [Policy Text Block] | Foreign Currency Translation The functional currency of our subsidiary is the Thai Baht. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income (loss) for the respective periods. For financial reporting purposes, the financial statements of the subsidiary are translated into the Company’s reporting currency, United States Dollars (“USD”). Asset and liability accounts are translated using the closing exchange rate in effect at the balance sheet date, equity account and dividend are translated using historical exchange rates and income and expense accounts are translated using the average exchange rate prevailing during the reporting period. Adjustments resulting from the translation, if any, are included in accumulated other comprehensive income (loss) in stockholder’s equity (deficit). |
Long-lived Assets [Policy Text Block] | Long-Lived Assets Property and equipment Property and equipment are recorded at cost. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method of 3 years. Software The Company capitalizes software acquisition and development costs incurred during the software application development stage. The software application development stage is characterized by software design and configuration activities, coding, testing and installation. Training and maintenance costs are expensed as incurred, while upgrades and enhancements are capitalized if it is probable that such expenditures will result in additional functionality. Capitalized software acquisition and development costs, once placed in service, are amortized using the straight-line method over the estimated useful life of 3 to 10 years. Capitalized software acquisition and development costs subject to amortization are carried at cost less accumulated amortization. Patents Patents are initially measured based on their fair values. Patents are being amortized on the straight-line method over the estimated useful life of 10 to 20 years. Management evaluates the recoverability of the Company’s property and equipment including patent development costs when events or circumstances indicate a potential impairment exists. The Company considers certain events and circumstances in determining whether the carrying value of identifiable property and equipment may not be recoverable including, but not limited to: significant changes in performance relative to expected operating results; significant changes in the use of the assets; significant negative industry or economic trends; and changes in the business strategy. In determining if impairment exists, the Company estimates the undiscounted cash flows to be generated from the use and ultimate disposition of these assets. If impairment is indicated based on a comparison of the assets' carrying values and the undiscounted cash flows, the impairment loss is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. |
Income Taxes [Policy Text Block] | Income Taxes The Company uses the asset and liability method in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and income tax carrying amounts 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. The Company reviews deferred tax assets for a valuation allowance based upon whether it is more likely than not that the deferred tax asset will be fully realized. A valuation allowance, if necessary, is provided against deferred tax assets, based upon management’s assessment as to their realization. |
Fair Value Measurement [Policy Text Block] | Fair Value Measurement The Company values its derivative instruments under FASB ASC 820 which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. Fair value is 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 (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). The three levels of the fair value hierarchy are as follows: Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities. Level 2 - Valuations for assets and liabilities that can be obtained from readily available pricing sources via independent providers for market transactions involving similar assets or liabilities. The Company’s principal markets for these securities are the secondary institutional markets, and valuations are based on observable market data in those markets. Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The Company uses Level 3 to value its derivative instruments. The following table sets forth by level with the fair value hierarchy the Company’s financial assets and liabilities measured at fair value on September 30, 2015 and December 31, 2014 respectively. Level 1 Level 2 Level 3 Total Derivative liability September 30, 2015 $ – $ – $ 1,063,350 $ 1,063,350 December 31, 2014 $ – $ – $ 1,256,159 $ 1,256,159 |
Revenue Recognition [Policy Text Block] | Revenue Recognition The Company recognizes revenue only when all of the following criteria have been met: Persuasive evidence of an arrangement exists; Delivery has occurred or services have been rendered; The fee for the arrangement is fixed or determinable; and Collectability is reasonably assured. Persuasive Evidence of an Arrangement – The Company documents all terms of an arrangement in a written contract signed by the customer prior to recognizing revenue. Delivery Has Occurred or Services Have Been Performed – The Company performs all services or delivers all products prior to recognizing revenue. Monthly services are considered to be performed ratably over the term of the arrangement. Professional consulting services are considered to be performed when the services are complete. Equipment is considered delivered upon delivery to a customer’s designated location. The Fee for the Arrangement Is Fixed or Determinable – Prior to recognizing revenue, a customer’s fee is either fixed or determinable under the terms of the written contract. Fees for most monthly services, professional consulting services, and equipment sales and rentals are fixed under the terms of the written contract. Fees for certain monthly services, including certain portions of networking, storage, and content distribution and caching services, are variable based on an objectively determinable factor such as usage. Those factors are included in the written contract such that the customer’s fee is determinable. The customer’s fee is negotiated at the outset of the arrangement and is not subject to refund or adjustment during the initial term of the arrangement. Collectability Is Reasonably Assured – The Company determines that collectability is reasonably assured prior to recognizing revenue. Collectability is assessed on a customer by customer basis based on criteria outlined by management. New customers are subject to a credit review process, which evaluates the customer’s financial position and ultimately its ability to pay. The Company does not enter into arrangements unless collectability is reasonably assured at the outset. Existing customers are subject to ongoing credit evaluations based on payment history and other factors. If it is determined during the arrangement that collectability is not reasonably assured, revenue is recognized on a cash basis. |
Franchise Fee Revenue [Policy Text Block] | Franchise Fee Revenue Revenues from licensees include a royalty based on a percent of sales, and may include initial fees. Continuing royalties are recognized in the period earned. Initial fees are recognized upon granting of a new franchise term, which is when the Company has performed substantially all initial services required by the franchise arrangement and after the franchisee commences operations. Additionally, the first twelve months of operations are royalty free for the franchisee. |
Stock-based Compensation [Policy Text Block] | Stock-Based Compensation The Company expenses the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of such instruments over the service period. Equity instruments issued to parties other than employees for acquiring goods or services are recorded at either the fair value of the consideration received or the fair value of the instruments issued in exchange for such services, whichever is more reliably measurable. |
Subsequent Events [Policy Text Block] | Subsequent Events The Company evaluated subsequent events through the date when financial statements are issued for disclosure. |
Recent Accounting Pronouncements [Policy Text Block] | Recent Accounting Pronouncements The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
SUMMARY OF SIGNIFICANT ACCOUN17
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Schedule of Fair Value of the Company's Financial Assets and Liabilities [Table Text Block] | Level 1 Level 2 Level 3 Total Derivative liability September 30, 2015 $ – $ – $ 1,063,350 $ 1,063,350 December 31, 2014 $ – $ – $ 1,256,159 $ 1,256,159 |
CONVERTIBLE NOTES PAYABLE (Tabl
CONVERTIBLE NOTES PAYABLE (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Schedule of Converitble Debt, Activity [Table Text Block] | Carrying value of Convertible Notes at December 31, 2014 $ 274,123 Additional borrowings 715,695 Total principal 989,818 Less: conversion carrying value of convertible notes (896,747 ) Less: discount related to fair value of the embedded conversion feature (758,632 ) Less: discount related to original issue discount (31,966 ) Add: amortization of discount 959,962 Carrying value of Convertible Notes at September 30, 2015 $ 262,435 |
DERIVATIVE LIABILITIES (Tables)
DERIVATIVE LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Schedule of Fair Values of Derivative Liabilities, Debt [Table Text Block] | December 31, September 30, 2014 New Issuances 2015 Shares of common stock issuable upon exercise of debt 23,193,987 163,052,712 513,193,798 Estimated market value of common stock on measurement date $ 0.17 $ 0.0018 - $0.026 $ 0.0017 Exercise price $ 0.00766 - 0.01 $ 0.0009 - 0.10 $ 0.0007 - 0.10 Risk free interest rate (1) 0.04% - 0.25% 0.00% - 0.33% 0.00% - 0.33% Expected dividend yield (2) 0.00% 0.00% 0.00% Expected volatility (3) 62% - 105% 106% - 169% 153%- 170% Expected exercise term in years (4) 0.25 - 1.00 0.01 - 2.00 0.20 – 1.92 |
Schedule of Fair Values of Derivative Liabilities, Warrants [Table Text Block] | December 31, September 30, 2014 New Issuances 2015 Shares of common stock issuable upon exercise of warrants - 12,344,002 12,344,002 Estimated market value of common stock on measurement date $ - $ 0.0037 $ 0.0017 Exercise price $ - $ 0.0032 -$0.0332 $ 0.0032 -$0.0332 Risk free interest rate (1) - 1.54% 0.92% Expected dividend yield (2) - 0.00% 0.00% Expected volatility (3) - 159% 170% Expected exercise term in years (4) - 5.00 4.84 |
Schedule of Derivative Liabilites Related to Convertible Notes [Table Text Block] | Fair value of derivatives December 31, 2014 $ 1,256,159 New issuances of conversion features 1,215,752 Conversion of derivative liabilities (1,340,300 ) Change in fair value of conversion features (70,960 ) New issuances of warrants 9,056 Change in fair value of derivative warrants (6,357 ) Fair value of derivative liabilities at September 30, 2015 $ 1,063,350 |
WARRANTS (Tables)
WARRANTS (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Schedule of Stockholders' Equity Note, Warrants or Rights, Activity [Table Text Block] | Weighted Average Weighted Average Number Exercise Price Expected Life Balance, December 31, 2014 - - - Issued 12,344,002 $ 0.014 Balance, September 30, 2015 12,344,002 $ 0.014 4.84 years |
SUMMARY OF SIGNIFICANT ACCOUN21
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2015 | |
Percentage of owned subsidiaries | 100.00% |
Property, Plant and Equipment, Estimated Useful Life | 3 years |
Minimum [Member] | Patents [Member] | |
Intangible Assets Estimated Useful Life | 10 years |
Minimum [Member] | Software [Member] | |
Intangible Assets Estimated Useful Life | 3 years |
Maximum [Member] | Patents [Member] | |
Intangible Assets Estimated Useful Life | 20 years |
Maximum [Member] | Software [Member] | |
Intangible Assets Estimated Useful Life | 10 years |
GOING CONCERN (Narrative) (Deta
GOING CONCERN (Narrative) (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Accumulated deficit | $ 5,785,486 | $ 3,365,780 |
UNEARNED REVENUES (Narrative) (
UNEARNED REVENUES (Narrative) (Details) - USD ($) | Mar. 10, 2014 | Dec. 31, 2013 |
Purchase Price of PL agreement | $ 35,000 | |
Purchase Price of PL agreement per unit | $ 3,500 | |
Unearned revenue | $ 35,000 | |
Proceeds from business transcation with MAV | $ 20,865 |
RELATED PARTY TRANSACTIONS (Nar
RELATED PARTY TRANSACTIONS (Narrative) (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2015 | Jul. 29, 2015 | Dec. 31, 2014 | |
Due to related party | $ 36,479 | $ 6,890 | $ 45,707 |
Repayments of Related Party Debt | 25,940 | ||
Major Shareholder [Member] | |||
Due to related party | $ 36,479 | $ 45,707 | |
Interest rate | 0.00% |
CONVERTIBLE NOTES PAYABLE (Narr
CONVERTIBLE NOTES PAYABLE (Narrative) (Details) - USD ($) | Sep. 03, 2015 | Aug. 31, 2015 | Jul. 27, 2015 | Jul. 10, 2015 | Jul. 09, 2015 | Jun. 24, 2015 | Mar. 05, 2015 | Apr. 16, 2015 | Mar. 26, 2015 | Jun. 30, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Convertible Debt, principal amount | $ 274,123 | |||||||||||
Debt discount | $ 758,632 | |||||||||||
Debt Instrument, Unamortized Discount | $ 610,208 | $ 779,573 | ||||||||||
Original issue discount, amount | 31,966 | |||||||||||
Amortization of deferred financing costs | $ 51,877 | |||||||||||
Convertible Debt 1 [Member] | ||||||||||||
Convertible Debt, principal amount | $ 69,000 | |||||||||||
Debt Instrument, interest rate, percentage | 8.00% | |||||||||||
Convertible note, conversion period | 180 days | |||||||||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 62.00% | |||||||||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | 30 days | |||||||||||
Deferred financing costs | $ 4,000 | |||||||||||
Debt discount | $ 53,778 | |||||||||||
Amortization of the debt discount on notes | 8,005 | |||||||||||
Convertible Debt 2 [Member] | ||||||||||||
Convertible Debt, principal amount | $ 45,000 | |||||||||||
Debt Instrument, interest rate, percentage | 8.00% | |||||||||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 62.00% | |||||||||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | 15 days | |||||||||||
Deferred financing costs | $ 2,250 | |||||||||||
Debt discount | $ 35,365 | |||||||||||
Amortization of the debt discount on notes | 3,045 | |||||||||||
Convertible Debt 3 [Member] | ||||||||||||
Convertible Debt, principal amount | $ 44,000 | |||||||||||
Debt Instrument, interest rate, percentage | 12.00% | |||||||||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 60.00% | |||||||||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | 20 days | |||||||||||
Debt discount | $ 40,000 | |||||||||||
Original issue discount, amount | 4,000 | |||||||||||
Amortization of the debt discount on notes | 1,806 | |||||||||||
Fair value of conversion feature | 43,038 | |||||||||||
Interest Expense, Debt | $ 3,038 | |||||||||||
Convertible Debt 4 [Member] | ||||||||||||
Convertible Debt, principal amount | $ 41,000 | |||||||||||
Debt Instrument, interest rate, percentage | 10.00% | |||||||||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 60.00% | |||||||||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | 20 days | |||||||||||
Debt discount | $ 35,888 | |||||||||||
Original issue discount, amount | 4,000 | |||||||||||
Fair value of conversion feature | $ 39,888 | |||||||||||
Interest Expense, Debt | 345 | |||||||||||
Union Capital [Member] | ||||||||||||
Convertible Debt, principal amount | $ 71,500 | |||||||||||
Debt Instrument, interest rate, percentage | 8.00% | |||||||||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 60.00% | |||||||||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | 20 days | |||||||||||
Deferred financing costs | $ 8,125 | |||||||||||
Debt discount | 65,000 | |||||||||||
Original issue discount, amount | 6,500 | |||||||||||
Amortization of the debt discount on notes | 11,285 | |||||||||||
Fair value of conversion feature | 126,021 | |||||||||||
Interest Expense, Debt | $ 61,021 | |||||||||||
Union Capital [Member] | Convertible Debt 1 [Member] | ||||||||||||
Purchase price of convertible debt | $ 117,476 | |||||||||||
Debt Instrument, interest rate, percentage | 8.00% | |||||||||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 60.00% | |||||||||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | 20 days | |||||||||||
Debt discount | $ 111,304 | |||||||||||
Amortization of the debt discount on notes | 45 | |||||||||||
Fair value of conversion feature | 111,304 | |||||||||||
Union Capital [Member] | Convertible Debt 2 [Member] | ||||||||||||
Convertible Debt, principal amount | $ 64,674 | |||||||||||
Debt Instrument, interest rate, percentage | 8.00% | |||||||||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 60.00% | |||||||||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | 20 days | |||||||||||
Deferred financing costs | $ 8,674 | |||||||||||
Debt discount | 59,718 | |||||||||||
Amortization of the debt discount on notes | 27 | |||||||||||
Fair value of conversion feature | 59,718 | |||||||||||
Prepayment premium | 56,000 | |||||||||||
Note payable | 112,000 | |||||||||||
Union Capital [Member] | Original Issue Discount [Member] | ||||||||||||
Original Issue Discount, percentage | 10.00% | |||||||||||
Debt discount | $ 6,500 | |||||||||||
Macallan Partners [Member] | ||||||||||||
Purchase price of convertible debt | $ 112,000 | |||||||||||
Debt Instrument, interest rate, percentage | 8.00% | |||||||||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 60.00% | |||||||||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | 20 days | |||||||||||
Deferred financing costs | $ 7,500 | |||||||||||
Debt discount | 100,000 | |||||||||||
Fair value of conversion feature | 207,690 | |||||||||||
Interest Expense, Debt | 107,690 | |||||||||||
Macallan Partners [Member] | Convertible Debt 1 [Member] | ||||||||||||
Interest Expense, Debt | 5,476 | |||||||||||
Note payable | 112,000 | |||||||||||
Macallan Partners [Member] | Original Issue Discount [Member] | ||||||||||||
Purchase price of convertible debt | $ 12,000 | |||||||||||
Original Issue Discount, percentage | 11.00% | |||||||||||
Debt discount | $ 12,000 | |||||||||||
Redwood Management [Member] | ||||||||||||
Convertible Debt, principal amount | $ 141,305 | $ 60,870 | ||||||||||
Purchase price of convertible debt | $ 60,870 | |||||||||||
Debt Instrument, interest rate, percentage | 12.00% | 12.00% | 12.00% | |||||||||
Debt Instrument, Convertible, Conversion Price | $ 0.10 | $ 0.10 | ||||||||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 70.00% | 60.00% | ||||||||||
Debt Instrument, Convertible Percentage Lowest Traded Price During 25 Days Prior To Date Of Conversion | 70.00% | |||||||||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | 25 days | 25 days | 25 days | |||||||||
Deferred financing costs | $ 13,500 | $ 6,250 | $ 12,000 | |||||||||
Debt discount | 130,000 | 56,522 | 56,522 | |||||||||
Original issue discount, amount | 11,305 | |||||||||||
Amortization of the debt discount on notes | 54,661 | 17,941 | $ 97,227 | |||||||||
Fair value of conversion feature | 307,439 | 117,086 | 110,096 | |||||||||
Interest Expense, Debt | $ 194,396 | $ 60,564 | 53,574 | |||||||||
Redwood Management [Member] | Original Issue Discount [Member] | ||||||||||||
Purchase price of convertible debt | $ 4,348 | |||||||||||
Original Issue Discount, percentage | 8.00% | 8.00% | 8.00% | |||||||||
Debt discount | $ 11,305 | $ 4,348 | $ 4,348 | |||||||||
Original issue discount, amount | $ 4,348 |
EQUITY TRANSACTIONS (Narrative)
EQUITY TRANSACTIONS (Narrative) (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2015 | Apr. 09, 2015 | Dec. 31, 2014 | |
Common Stock, Shares Authorized | 2,000,000,000 | 2,000,000,000 | |
Stock Issued During Period, Value, Conversion of Convertible Securities | $ 316,788,111 | ||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 869,881 | ||
Conversion of derivative liabilities | $ 1,340,300 | ||
Minimum [Member] | |||
Common Stock, Shares Authorized | 1,000,000,000 | ||
Maximum [Member] | |||
Common Stock, Shares Authorized | 2,000,000,000 |
WARRANTS (Narrative) (Details)
WARRANTS (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2015USD ($)$ / sharesshares | |
Derivative liability | $ 1,063,350 |
Change in fair value of derivative liabilities | $ (6,357) |
Warrant [Member] | |
Number of warrants issued | 7 |
Shares issued for warrants | shares | 12,344,002 |
Warrant, term | 5 years |
Derivative liability | $ 9,056 |
Change in fair value of derivative liabilities | $ 6,357 |
Minimum [Member] | Warrant [Member] | |
Warrant, exercise price | $ / shares | $ 0.003 |
Maximum [Member] | Warrant [Member] | |
Warrant, exercise price | $ / shares | $ 0.10 |
GAIN ON SETTLEMENT OF DEBT (Nar
GAIN ON SETTLEMENT OF DEBT (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Gain on settlement of debt | $ 107,974 | $ 0 | $ 107,974 | $ 0 |
SUBSEQUENT EVENTS (Narrative) (
SUBSEQUENT EVENTS (Narrative) (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2015 | Oct. 13, 2015 | Dec. 31, 2014 | |
Stock Issued During Period, Shares, Conversion of Convertible Securities | 869,881 | ||
Stock Issued During Period, Value, Conversion of Convertible Securities | $ 316,788,111 | ||
Preferred stock, shares issued | |||
Subsequent Event [Member] | |||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 130,552,945 | ||
Stock Issued During Period, Value, Conversion of Convertible Securities | $ 100,000 | ||
Convertible preferred stock, shares for future ssuance | 5,000,000 | ||
Preferred stock, shares issued | 5,000,000 | ||
Subsequent Event [Member] | Paul Giles [Member] | Services Rendered [Member] | |||
Preferred stock, shares issued | 4,000,000 | ||
Subsequent Event [Member] | Chris Ziomkowski [Member] | Services Rendered [Member] | |||
Preferred stock, shares issued | 1,000,000 |
Schedule of Fair Value of the C
Schedule of Fair Value of the Company's Financial Assets and Liabilities (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Liabilities | ||
Derivative liability | $ 1,063,350 | $ 1,256,159 |
Level 1 [Member] | ||
Liabilities | ||
Derivative liability | 0 | 0 |
Level 2 [Member] | ||
Liabilities | ||
Derivative liability | 0 | 0 |
Level 3 [Member] | ||
Liabilities | ||
Derivative liability | $ 1,063,350 | $ 1,256,159 |
Schedule of Converitble Debt, A
Schedule of Converitble Debt, Activity (Details) | 6 Months Ended |
Jun. 30, 2015USD ($) | |
Carrying value of Convertible Notes at December 31, 2014 | $ 274,123 |
Additional borrowings | 715,695 |
Total principal | 989,818 |
Less: conversion carrying value of convertible notes | (896,747) |
Less: discount related to fair value of the embedded conversion feature | (758,632) |
Less: discount related to original issue discount | (31,966) |
Add: amortization of discount | 959,962 |
Carrying value of Convertible Notes at September 30, 2015 | $ 262,435 |
Schedule of Fair Values of Deri
Schedule of Fair Values of Derivative Liabilities, Debt (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Shares of common stock issuable upon exercise of debt | $ 513,193,798 | $ 23,193,987 |
Estimated market value of common stock on measurement date | $ 0.0017 | $ 0.17 |
Expected dividend rate | 0.00% | 0.00% |
New Issuances [Member] | ||
Shares of common stock issuable upon exercise of debt | $ 163,052,712 | |
Estimated market value of common stock on measurement date | $ 0.0018 | |
Expected dividend rate | 0.00% | |
Minimum [Member] | ||
Exercise price | $ 0.0007 | $ 0.00766 |
Risk free interest rate | 0.00% | 0.04% |
Expected volitility | 153.00% | 62.00% |
Expected exercise term in years | 2 months 12 days | 3 months |
Minimum [Member] | New Issuances [Member] | ||
Exercise price | $ 0.0009 | |
Risk free interest rate | 0.00% | |
Expected volitility | 106.00% | |
Expected exercise term in years | 4 days | |
Maximum [Member] | ||
Exercise price | $ 0.10 | $ 0.01 |
Risk free interest rate | 0.33% | 0.25% |
Expected volitility | 170.00% | 105.00% |
Expected exercise term in years | 1 year 11 months 1 day | 1 year |
Maximum [Member] | New Issuances [Member] | ||
Estimated market value of common stock on measurement date | $ 0.026 | |
Exercise price | $ 0.10 | |
Risk free interest rate | 0.33% | |
Expected volitility | 169.00% | |
Expected exercise term in years | 2 years |
Schedule of Fair Values of De33
Schedule of Fair Values of Derivative Liabilities, Warrants (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Estimated market value of common stock on measurement date | $ 0.0017 | $ 0.17 |
Expected dividend rate | 0.00% | 0.00% |
Warrant [Member] | ||
Shares of common stock issuable upon exercise of warrants | 12,344,002 | 0 |
Estimated market value of common stock on measurement date | $ 0.0017 | $ 0 |
Exercise price | $ 0 | |
Risk free interest rate | 0.92% | 0.00% |
Expected dividend rate | 0.00% | 0.00% |
Expected volitility | 170.00% | 0.00% |
Expected exercise term in years | 4 years 10 months 2 days | 0 years |
Minimum [Member] | ||
Exercise price | $ 0.0007 | $ 0.00766 |
Risk free interest rate | 0.00% | 0.04% |
Expected volitility | 153.00% | 62.00% |
Expected exercise term in years | 2 months 12 days | 3 months |
Minimum [Member] | Warrant [Member] | ||
Exercise price | $ 0.0032 | |
Maximum [Member] | ||
Exercise price | $ 0.10 | $ 0.01 |
Risk free interest rate | 0.33% | 0.25% |
Expected volitility | 170.00% | 105.00% |
Expected exercise term in years | 1 year 11 months 1 day | 1 year |
Maximum [Member] | Warrant [Member] | ||
Exercise price | $ 0.0332 | |
New Issuances [Member] | ||
Estimated market value of common stock on measurement date | $ 0.0018 | |
Expected dividend rate | 0.00% | |
New Issuances [Member] | Warrant [Member] | ||
Shares of common stock issuable upon exercise of warrants | 12,344,002 | |
Estimated market value of common stock on measurement date | $ 0.0037 | |
Risk free interest rate | 1.54% | |
Expected dividend rate | 0.00% | |
Expected volitility | 159.00% | |
Expected exercise term in years | 5 years | |
New Issuances [Member] | Minimum [Member] | ||
Exercise price | $ 0.0009 | |
Risk free interest rate | 0.00% | |
Expected volitility | 106.00% | |
Expected exercise term in years | 4 days | |
New Issuances [Member] | Minimum [Member] | Warrant [Member] | ||
Exercise price | $ 0.0032 | |
New Issuances [Member] | Maximum [Member] | ||
Estimated market value of common stock on measurement date | 0.026 | |
Exercise price | $ 0.10 | |
Risk free interest rate | 0.33% | |
Expected volitility | 169.00% | |
Expected exercise term in years | 2 years | |
New Issuances [Member] | Maximum [Member] | Warrant [Member] | ||
Exercise price | $ 0.0332 |
Schedule of Derivative Liabilit
Schedule of Derivative Liabilites Related to Convertible Notes (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
Fair value of derivatives December 31, 2014 | $ 1,256,159 | |
New issuances of conversion features | $ 1,215,752 | |
Conversion of derivative liabilities | (1,340,300) | |
Change in fair value of conversion features | (70,960) | |
New issuances of warrants | 9,056 | |
Change in fair value of derivative liabilities | (6,357) | |
Derivative liability | $ 1,063,350 |
Schedule of Stockholders' Equit
Schedule of Stockholders' Equity Note, Warrants or Rights, Activity (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Balance, Beginning of Period | 0 | |
Weighted Average Exercise Price, Beginning of Period | $ 0 | |
Weighted Average Expected Life, Beginning of Period | 4 years 10 months 2 days | 0 years |
Issued | 12,344,002 | |
Weighted Average Exercise Price, Issued | $ 0.014 | |
Balance, End of Period | 12,344,002 | 0 |
Weighted Average Exercise Price, End of Period | $ 0.014 | $ 0 |
Weighted Average Expected Life, End of Period | 4 years 10 months 2 days | 0 years |