Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 23, 2015 | |
Document and Entity Information: | ||
Entity Registrant Name | Eventure Interactive, Inc. | |
Document Type | S1 | |
Document Period End Date | Sep. 30, 2015 | |
Trading Symbol | evti | |
Amendment Flag | false | |
Entity Central Index Key | 1,509,351 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 1,101,066,432 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 |
CONSOLIDATED BALANCE SHEETS (UN
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Current Assets | ||
Cash | $ 22,447 | $ 2,957 |
Deposits | 15,196 | 15,196 |
Total current assets | 37,643 | 18,153 |
Fixed assets, net | 44,385 | 52,782 |
Total assets | 82,028 | 70,935 |
Current Liabilities | ||
Accounts payable | 856,320 | 400,323 |
Accrued expenses | 56,103 | 924,372 |
Related party payables | 161,380 | 0 |
Related party notes payable | 123,458 | 555,250 |
Notes payable, net of discount of $0 and $2,889, respectively | 0 | 147,111 |
Convertible notes payable, net of discount of $1,237,764 and $168,000, respectively | 259,650 | 6,000 |
Derivative liabilities - current | 3,245,974 | 177,149 |
Total current liabilities | 4,702,885 | 2,210,205 |
Derivative liabilities - non-current | 249,574 | 328,044 |
Total liabilities | $ 4,952,459 | $ 2,538,249 |
Commitments and contingencies | ||
Stockholders' Deficit | ||
Preferred stock, $0.001 par value, 10,000,000 authorized, 5,000,000 and -0- shares of Series A issued and outstanding, respectively | $ 5,000 | $ 0 |
Common stock, $0.001 par value, 5,000,000,000 shares authorized; 672,891,024 and 25,481,323 shares issued and outstanding, respectively | 672,891 | 25,481 |
Subscriptions receivable | (17,000) | 0 |
Additional paid-in capital | 35,270,154 | 25,242,130 |
Accumulated deficit | (40,801,476) | (27,734,925) |
Total stockholders' deficit | (4,870,431) | (2,467,314) |
Total liabilities and stockholders' deficit | $ 82,028 | $ 70,935 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Parentheticals | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Series A Preferred Stock, Shares Issued | 5,000,000 | 0 |
Series A Preferred Stock, Shares Outstanding | 5,000,000 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 5,000,000,000 | 5,000,000,000 |
Common Stock, Shares, Issued | 672,891,024 | 25,481,323 |
Common Stock, Shares, Outstanding | 672,891,024 | 25,481,323 |
Convertible notes payable, net of discount | $ 1,237,764 | $ 168,000 |
Notes payable, net of discount | $ 0 | $ 2,889 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenues {1} | ||||
Revenues | $ (1,098) | $ 0 | $ (750) | $ 0 |
General and administrative expenses | 1,322,644 | 1,838,057 | 7,525,985 | 20,606,293 |
Operating loss | (1,323,742) | (1,838,057) | (7,526,735) | (20,606,293) |
Other income (expense): | ||||
Change in fair value of derivative liabilities | (1,544,078) | 1,186,483 | (1,966,358) | (2,021,531) |
Day-one loss | (1,702,672) | 0 | (1,702,672) | 0 |
Interest expense | (710,892) | 0 | (1,090,683) | 0 |
Loss on debt extinguishment | (781,466) | 0 | (780,103) | 0 |
Total other income (expense) | (4,739,108) | 1,186,483 | (5,539,816) | (2,021,531) |
Net loss | $ (6,062,850) | $ (651,574) | $ (13,066,551) | $ (22,807,824) |
Loss per common share - basic and diluted | $ (0.02) | $ (0.03) | $ (0.06) | $ (1) |
Weighted average number of common shares outstanding - basic and diluted | 307,131,764 | 24,332,098 | 232,311,370 | 22,821,543 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities | ||
Net loss | $ (13,066,551) | $ (22,807,824) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation | 5,124,731 | 18,922,507 |
Change in fair value of derivative liabilities | 3,669,030 | 2,201,531 |
Depreciation and amortization expense | 22,123 | 14,559 |
Amortization of debt discount on notes | 1,019,530 | 0 |
Loss on debt extinguishment | 780,104 | 0 |
Changes in operating assets and liabilities: | ||
Deposits | 0 | (10,196) |
Accounts payable | 495,506 | 149,405 |
Accrued expenses | 98,512 | 272,669 |
Net cash used in operating activities | (1,857,015) | (1,255,630) |
Cash flows from investing activities | ||
Payments for software development costs | 0 | (468,450) |
Acquisition of fixed assets | (13,725) | (36,185) |
Net cash used in investing activities | (13,725) | (504,635) |
Cash flows from financing activities | ||
Proceeds from related party loans | 91,000 | 545,107 |
Repayments of related party loans | (112,400) | (120,107) |
Related party advances | 161,380 | 0 |
Proceeds from convertible notes | 1,442,250 | 0 |
Proceeds from sale of common stock and warrants | 308,000 | 1,275,000 |
Net cash provided by financing activities | 1,890,230 | 1,700,000 |
Net change in cash | 19,490 | (60,265) |
Cash at beginning of the period | 2,957 | 67,762 |
Cash at end of the period | 22,447 | 7,497 |
Cash paid for: | ||
Income taxes | 0 | 0 |
Interest | 0 | 100 |
Noncash investing and financing transactions: | ||
Original issue discount on issuance of convertible notes | 473,944 | 0 |
Settlement of related party debt with convertible debt | 150,000 | 0 |
Settlement of debt with convertible debt | 50,000 | 0 |
Conversion of convertible debt and accrued interest to common stock | 798,130 | 0 |
Debt discount - variable conversion feature derivative liabilities | 2,321,296 | 0 |
Debt discount - common stock and warrants | 18,115 | 0 |
Issuance of common stock for related party notes payable and interest | 362,105 | 0 |
Issuance of common stock to settle accrued expenses | 918,184 | 0 |
Stock subscriptions receivable | 17,000 | 0 |
Fair value of warrant derivative liabilities issued in common stock offering | $ 0 | $ 449,624 |
ORGANIZATION AND BUSINESS OPERA
ORGANIZATION AND BUSINESS OPERATIONS | 9 Months Ended |
Sep. 30, 2015 | |
ORGANIZATION AND BUSINESS OPERATIONS | |
ORGANIZATION AND BUSINESS OPERATIONS | 1. ORGANIZATION AND BUSINESS OPERATIONS The Company was incorporated in the State of Nevada on November 29, 2010. The Company was in the GPS tracking system business until late in 2012, when the Company redirected all of its efforts into the social media business. On February 20, 2013, the Company filed Amended and Restated Articles of Incorporation with the Nevada Secretary of State to change its name from Live Event Media, Inc. to Eventure Interactive, Inc. (the Company). Going Concern The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception resulting in an accumulated deficit of $40,801,476 as of September 30, 2015 and further losses are anticipated in the development of its business raising substantial doubt about the Companys ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from business operations when they come due. Management intends to finance its operating costs over the next twelve months with existing cash on hand and loans from directors and/or the private placement of common stock. These financials do not include any adjustments relating to the recoverability and reclassification of recorded asset amounts, or amounts and classifications of liabilities that might result from this uncertainty. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited interim consolidated financial statements of Eventure Interactive, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (SEC), and should be read in conjunction with the audited financial statements and notes thereto contained in the Companys latest Annual Report on Form 10-K filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent year ended December 31, 2014, as reported in Form 10-K, have been omitted. Principles of Consolidation The financial statements include the accounts of the Company and its subsidiary. Intercompany transactions and balances have been eliminated. Use of Estimates and Assumptions The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Companys estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. Basic and Diluted Loss Per Common Share Basic loss per common share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per common share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per common share excludes all potential common shares if their effect is anti-dilutive. Since the Company is in a loss position, it has excluded stock options and warrants from its calculation of diluted net loss per common share. At September 30, 2015, the Company had 9,131,216 stock options, 12,576,452 warrants and 1,922,712,128 shares issuable upon the conversion of convertible debt that would have been included in its calculation of diluted net loss per common share if they were not anti-dilutive. Software Development Costs Costs incurred in the research and development of new software products are expensed as incurred until technological feasibility has been established. After technological feasibility is established, any additional costs are capitalized in accordance with authoritative guidance until the product is available for general release. Fixed Assets Fixed assets are stated at cost and depreciated using the straight-line method over the estimated useful life of the asset. The Companys fixed assets are comprised of computer equipment and the estimated life of computer equipment is three years. Derivative Liabilities The Company reviews the terms of the common stock, convertible debt and warrants it issues to determine whether there are embedded derivative instruments, including embedded conversion options, which are required to be bifurcated and accounted for separately as derivative financial instruments. Bifurcated embedded derivatives are initially recorded at fair value and are then revalued at each reporting date with changes in the fair value reported as non-operating income or expense. The Company uses a Black-Scholes model for valuation of the derivative instrument. Stock-Based Compensation The Company measures stock-based compensation cost at the grant date based on the fair value of the award and recognize it as expense, over the vesting or service period, as applicable, of the stock award using the straight-line method. Fair Value Measurements As defined in FASB ASC Topic No. 820 10, fair value is the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC Topic No. 820 10 requires disclosure that establishes a framework for measuring fair value and expands disclosure about fair value measurements. The statement requires fair value measurements be classified and disclosed in one of the following categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that the Company values using observable market data. Substantially all of these inputs are observable in the marketplace throughout the term of the derivative instruments, can be derived from observable data, or supported by observable levels at which transactions are executed in the marketplace. Level 3: Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e. supported by little or no market activity). The Companys valuation models are primarily industry standard models. Level 3 instruments include derivative warrant instruments. The Company does not have sufficient corroborating evidence to support classifying these assets and liabilities as Level 1 or Level 2. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Companys assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The estimated fair value of the derivative liabilities were calculated using the Black Scholes model. New Accounting Pronouncements The Companys management does not believe that any other recently issued pronouncements will have a material effect on the Companys financial statements. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2015 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 3. RELATED PARTY TRANSACTIONS Related party payables During the nine months ended September 30, 2015, the Companys CFO advanced the Company $156,695 to fund the operations of the Company, the Company paid $34,500 in cash, leaving $122,195 payable as of September 30, 2015. During the nine months ended September 30, 2015, the Companys Chairman advanced the Company $47,829 to fund the operations of the Company, all of which was repaid in full as at September 30, 2015. At September 30, 2015, the Company owes a related party entity $39,185 for marketing services provided to the Company during the nine months ended September 30, 2015. The service fee was $188,147, of which the Company paid $148,962 in cash. The entity is 71% owed by a Director of the Company and 8% owned by the CFO of the Company. Related party notes payable At September 30, 2015 and December 31, 2014, the Company owed its Chairman and former CEO $6,300 and $190,250, respectively, for loans provided to the Company by the Chairman. The loans bear interest at 1% per annum. During the nine month period ended September 30, 2015, the Company received $85,300 from its Chairman. During the nine months ended September 30, 2015, the Company repaid a total of $269,250 of the outstanding loans. At September 30, 2015 and December 31, 2014, the Company owed its CFO $2,000 and $40,000, respectively, for loans provided to the Company by the CFO. The loans bear interest at 1% per annum. On February 2, 2015, an aggregate of $40,000 of related party notes payable and $143 of interest was converted into shares of our restricted common stock at a conversion price of $0.07 per share resulting in the issuance of 573,471 shares of common stock to Mr. Rountree. During the nine month period ended September 30, 2015, the Company received a further $12,000 in loans from its CFO of which $10,000 has been repaid. At September 30, 2015 and December 31, 2014, the Company owed a Director of the Company $115,158 and $275,000, respectively, for loans provided to the Company by the Director. The amounts owed to the Director are past due and in default as at September 30, 2015. The loans bear interest at 1% per annum. At September 30, 2015 and December 31, 2014, the Company owed $0 and $50,000 to a relative of an executive of the Company. The loans bear interest at 1% per annum. The amounts was assigned to a third party and exchanged for convertible notes. No gain or loss was recorded on the debt extinguishment. |
NOTES PAYABLE
NOTES PAYABLE | 9 Months Ended |
Sep. 30, 2015 | |
NOTES PAYABLE | |
NOTES PAYABLE | 4. NOTES PAYABLE During August 2014, the Company received $45,000 in cash for a $50,000 promissory note due in June 2015. The promissory note has no stated interest rate. The Company is recognizing the $5,000 original issue discount as interest expense over the life of the promissory note. During the six months ended June 30, 2015, this loan was assigned to a third party and exchanged for convertible notes. No gain or loss was recorded on the debt extinguishment. During the year ended December 31, 2014, the Company received $100,000 in cash from third parties in exchange for $100,000 of notes payable bearing interest at 1% per annum. During the nine months ended September 30, 2015, $100,000 of these notes payable was assigned to a third party and exchanged for convertible notes. |
CONVERTIBLE NOTES PAYABLE
CONVERTIBLE NOTES PAYABLE | 9 Months Ended |
Sep. 30, 2015 | |
CONVERTIBLE NOTES PAYABLE: | |
CONVERTIBLE NOTES PAYABLE | 5. CONVERTIBLE NOTES PAYABLE Convertible debt with a variable conversion feature consists of the following as of September 30, 2015 and December 31, 2014: September 30, 2015 December 31, 2014 Bluestem Advisors (a) 48,048 - Carebourn Capital (b) 376,081 - GHS Investments (c) 43,253 - JMJ Financial (d) 48,870 55,556 JSJ Investments (e) 50,000 - KBM (f) - 64,000 LG (g) 283,275 110,000 RDW Capital (h) 100,000 - SBI Investments (i) 468,887 - VGI (j) 79,000 Total convertible notes payable $ 1,497,414 $ 229,556 Less: debt discount (1,237,764 ) (223,556 ) Convertible notes payable, net 259,650 6,000 Convertible debt with a variable conversion feature, provided and fully converted or assigned to third parties, during the nine months ended September 30, 2015, consists of the following: Issued During the period Adar Bays (k) $ 44,00 Crown Bridge Partners (l) 158,500 EMA Financial (m) 71,500 FireRock (n) 137,500 Peak One (o) 50,500 Rider Capital (p) 70,000 River North (q) 52,500 Tangiers (r) 55,000 Union Capital (s) 44,00 (a) Bluestem Advisors On September 14, 2015, a convertible note purchase agreement was entered into between River North Equity, LLC (ref (p)) (the Seller) and Bluestem Advisors LLC (the Purchaser). Under the convertible note purchase agreement, the Seller , who held a certain convertible promissory note dated March 18, 2015(the Note) in the original principal amount of $52,500 wishes to sell and the Purchaser wishes to purchase the Note. On September 18, 2015, the convertible note purchase agreement was closed. The Note is a 9% convertible promissory note due on March 18, 2016 in the principal amount of $52,500 and is convertible by the note holder, at its option, any time after 180 days from issuance at a conversion price equal to 60% of the lowest trading price for our common stock during the twenty trading days prior to the date on which the note holder provides us with a conversion notice. The conversion price formula will be reduced from 60% to 50% if the Company is not DWAC eligible. During the nine month period ended September 30, 2015 Bluestem converted $32,230 of principal from the aforementioned note into an aggregate of 48,833,333 shares of common stock. On September 30, 2015, the Company issued Bluestem a 10% convertible promissory note in the principal amount of $27,778 due September 30, 2016. The note is convertible at Bluestems option into common stock of the Company at a conversion price equal to 45% of the lowest bid price during the 20 trading days immediately preceding the date of conversion. (b) Carebourn Capital During the nine months ended September 30, 2015, the Company issued several convertible promissory notes to Carebourn Capital LLC (Carebourn) which are convertible at Carebourns option into common stock of the Company at a conversion price equal to 50% of the average of the lowest three trading prices of the Companys common stock during the 20 trading days immediately preceding the date of conversion. During the nine month period ended September 30, 2015 Carebourn, converted $152,760 of principal into an aggregate of 219,444,843 shares of common stock. Notes # of Shares issued Amount converted September 30, 2015 $45,760 -10% due on January 26, 2016 54,910,676 $ 45,760 $ - $101,800 -10% due on May 30, 2016 - - 101,800 $107,000 -10% due on August 6, 2016 164,534,167 107,000 - $82,000 - 10% due on August 14, 2016 - - 82,000 $132,281-10% convertible note due on June 18, 2016 - - 132,281 $60,000 -10% convertible note due on June 22, 2016 - - 60,000 219,444,843 152,760 376,081 (c) GHS Investments On September 23, 2015, the Company issued GHS Investments, LLC (GHS) an 8% convertible promissory note in the principal amount of $63,412 due March 3, 2016. The note is convertible at GHSs option into common stock of the Company at a conversion price equal to 60% of the lowest closing price during the 20 trading days immediately preceding the date of conversion. The conversion price has a floor of $0.0005. On September 22, 2015, we entered into an Investment Agreement and Registration Rights Agreement (collectively the Agreement) with GHS in order to establish a source of funding. Pursuant to this Agreement, GHS will provide us with an equity line of financing of up to $7,750,000, and upon effectiveness of a Form S-1 Registration Statement. The minimum amount that we must request from GHS is $5,000 at any one time. GHS will purchase common stock from us based on the amount specified in each request for funding from GHS. Pursuant to the Equity Purchase Agreement, GHS and its affiliates will not be required to purchase shares of our common stock that would result in GHSs beneficial ownership equaling more than 9.99% of our outstanding common stock. (d) JMJ On December 15, 2014, we issued a convertible promissory note in the principal amount of $55,556 to JMJ Financial (JMJ) due December 15, 2016 (the JMJ Note). The JMJ Note was subject to an original issue discount resulting in net proceeds of $50,000. The JMJ Note, including accrued interest due thereon, is convertible by JMJ, at its option, any time after 180 days from the date of issuance at a conversion price equal to the lesser of $0.16 or 60% of the average of the two lowest trading prices during the twenty trading days prior to conversion. The JMJ Note may be prepaid by us any time within 120 days from the date of issuance without payment of interest. If we do not prepay the JMJ Note within such 120 day period, a one-time interest charge of 12% will be applied to the principal amount. The JMJ Note becomes immediately due and payable upon certain events of default and subjects us to significant default penalties. JMJ may provide us with additional loans on the same terms pursuant to which JMJ would receive notes which, together with the JMJ Note, aggregate to $250,000. The JMJ Note was amended on January 16, 2015 to, among other things, remove a provision which had provided that if, at any time while the JMJ Note is outstanding, we issued securities on more favorable terms than those contained in the JMJ Note, JMJ had the option to include the more favorable terms in the JMJ Note. On April 28, 2015, the Company issued JMJ a $27,778 convertible promissory note, of which $2,778 was an original issue discount. The note is identical, in all material respects, to the existing JMJ Note. The note has a two-year term and provides for payment of interest on the principal amount at maturity at the rate of 12% per annum. The note, including accrued interest due thereon, is convertible by JMJ, at its option, any time after 180 days from the date of issuance at a conversion price equal to the lesser of $0.16 or 60% of the average of the two lowest trading prices during the twenty trading days prior to conversion. During the nine months ended September 30, 2015 JMJ converted $34,464 of principal into an aggregate of 9,400,000 shares of common stock. (e) JSJ Investments On May 19, 2015, the Company issued JSJ Investments, Inc. (JSJ) a $50,000 convertible promissory note in the principal amount of $50,000 due February 2016. The JSJ note is convertible by JSJ, at its option, any time after 180 days from issuance at a conversion price equal to 45% of the lowest trading prices for our common stock during the twenty-day trading period prior to the date on which JSJ provides us with a conversion notice. (f) KBM On January 29, 2015 and December 19, 2014, the Company issued 8% convertible promissory notes to KBM Worldwide, Inc. (KBM) in the principal amounts of $48,000 and $64,000, respectively due November 2, 2015 and September 19, 2015, respectively, (the KBM Notes). The Company received cash proceeds of $44,100 and $60,000 for these notes. The KBM Notes are convertible by KBM at its option any time after 180 days from issuance at a conversion price equal to 58% of the average of the lowest three trading prices for our common stock during the ten trading day period prior to the date on which KBM provides us with a conversion notice. The KBM Notes may be prepaid by us any time within 180 days from the date of issuance at a premium ranging from 115% for a prepayment within the initial 30 days to 140% for prepayment after 150 days from the date of issuance but on or prior to 180 days from the date of issuance. The prepayment premium for the 31-60 day period is 120%, for the 61-90 day period is 125%, for the 91-120 day period is 130% and for the 121-150 day period is 135%. The KBM Notes become immediately due and payable upon the occurrence of certain events of default and subjects us to significant default penalties. On June 25, 2015, the KBM notes were assigned by the Company to SBI Investments. The assignment was treated as a debt extinguishment by the Company. (g) LG On December 15, 2014, the Company issued to LG Capital Funding, LLC (LG) an 8% convertible promissory note in the principal amount of $110,000 due December 15, 2015 (the LG #1 Note). The LG Note was subject to an original issue discount of $15,000 resulting in net proceeds of $95,000. The LG #1 Note is convertible by LG, at its option, any time after 180 days from the date of issuance at a conversion price equal to 62% of the lowest closing bid price for our common stock for the twenty trading days prior to the date upon which LG provides us with a notice of conversion. The LG #1 Note may be prepaid by us any time within 180 days from the date of issuance at a premium ranging from 115% for a prepayment within the initial 30 days to 145% for a prepayment after 150 days from the date of issuance but on or prior to 180 days from the date of issuance. The prepayment premium for the 31-60 day period is 121%, for the 61-90 day period is 127%, for the 91-120 day period is 133%, and for the 121-150 day period is 139%. The LG #1 Note becomes immediately due and payable upon the occurrence of certain events of default and subjects us to significant default penalties. During the nine months ended September 30, 2015, LG converted $110,000 of principal and $5,670 of interest into an aggregate of 87,115,082 shares of common stock. On July 20, 2015 and September 3, 2015, the Company issued to LG 8% convertible promissory notes in the principal amount of $86,225 due on July 20, 2016 (LG #2 Note), in the principal amount of $127,050 due on September 3, 2016 (LG #3 Note) and in the principal amount of $70,000 due September 3, 2016, respectively. These above notes are convertible by LG, at its option, any time after 180 days from the date of issuance at a conversion price equal to 62% of the lowest closing bid price for our common stock for the twenty trading days prior to the date upon which LG provides us with a notice of conversion. The LG #12 and #3 Notes may be prepaid by us any time within 180 days from the date of issuance at a premium ranging from 115% for a prepayment within the initial 30 days to 145% for a prepayment after 150 days from the date of issuance but on or prior to 180 days from the date of issuance. The prepayment premium for the 31-60 day period is 121%, for the 61-90 day period is 127%, for the 91-120 day period is 133%, and for the 121-150 day period is 139%. The LG #2 and #3 Notes becomes immediately due and payable upon the occurrence of certain events of default and subjects us to significant default penalties. (h) RDW Capital On July 10, 2015, the Company issued RDW Capital LLC (RDW) two10% convertible promissory notes in the principal amount of $100,000 due January 10, 2016 (the RDW Notes). The RDW Notes are convertible at RDWs option into common stock of the Company at a conversion price equal to 50% of the lowest bid price in the 20 days immediately preceding the date of conversion. During the nine months ended September 30, 2015, RDW converted $100,000 of principal into an aggregate of 45,332,000 shares of common stock. (i) SBI Investments During the nine months ended September 30, 2015, the Company issued several convertible promissory notes to SBI Investments LLC (SBI) with convertible at SBIs option into common stock of the Company at a conversion price equal to 50% of the lowest bid price 20 days immediately preceding the date of conversion. During the nine month period ended September 30, 2015 SBI converted $85,498 of principal into an aggregate of 50,066,552 shares of common stock. Notes # of Shares issued Amount converted September 30, 2015 $164,631 -8% due on June 25, 2015 50,066,552 $ 85,498 $ 79,133 $60,369 -8% due on June 25, 2016 - - 60,369 $125,000 -8% due on June 26, 2016 - - 125,000 $50,000 - 8% due on August 6, 2016 - - 50,000 $104,385-10% convertible note due on September 21, 2016 - - 104,385 $50,000 -10% convertible note due on September 20, 2016 - - 50,000 50,066,552 85,498 468,887 (j) VGI On April 8, 2015, we issued to Vires Group, Inc. (VGI), a 12% convertible promissory note in the principal amount of $38,000 due January 2016 (the VGI Note). The VGI Note is convertible by VGI, at its option, any time after 180 days from issuance at a conversion price equal to 50% of the average of the three lowest trading prices for our common stock during the twenty-day trading period prior to the date on which VGI provides us with a conversion notice. The VGI Note becomes immediately due and payable upon the occurrence of certain events of default and subjects the Company to significant default penalties. On May 11, 2015, the Company issued to VGI a 12% convertible promissory note in the principal amount of $10,000 due February 13, 2016 (the Second VGI Note). The Second VGI Note is convertible by VGI, at its option, any time after 180 days from the date of issuance at a conversion price equal to 50% of the average of the three lowest trading prices for our common stock during the twenty-day trading period prior to the date on which VGI provides us with a conversion notice. On June 25, 2015, the VGI notes were assigned by the Company to SBI Investments. The assignment was treated as a debt extinguishment by the Company. On July 13, 2015, the Company issued to VGI an 8% convertible promissory note in the principal amount of $79,000 due April 14, 2016 (the Third VGI Note). The Third VGI Note is convertible by VGI, at its option, any time after 180 days from the date of issuance at a conversion price equal to 50% of the average of the three lowest trading prices for our common stock during the twenty-day trading period prior to the date on which VGI provides us with a conversion notice. (k) Adar Bays On January 23, 2015, we issued to Adar Bays, LLC (Adar) an 8% convertible promissory note in the principal amount of $44,000 due January 23, 2016 (the Adar Note). The Adar Note was subject to an original issue discount of $6,500 resulting in net proceeds of $37,500. The Adar Note, including accrued interest due thereon, is convertible by Adar, at its option, any time after 180 days from the date of issuance at a conversion price equal to 62% of the lowest closing bid price for our common stock during the twenty trading days prior to conversion. In the event that our common stock becomes subject to a DTC chill, the conversion price formula will be reduced from 62% to 52% while the chill remains in effect. The Adar Note may be prepaid by us within 180 days from the date of issuance at a premium ranging from 115% for a prepayment within the initial 30 days to 145% for a prepayment after 150 days from the date of issuance but on or prior to 180 days from the date of issuance. The prepayment premium for the 31-60 day period is 121%, for the 61-90 day period is 127%, for the 91-120 day period is 133% and for the 121-150 day period is 139%. The Adar Note becomes immediately due and payable upon the occurrence of certain events of default and subjects us to significant default penalties. On July 27, 2015, the Adar Note was assigned by the Company to Carebourn Capital LLC. The assignment was treated as a debt extinguishment by the Company. (l) Crown Bridge Partners On April 14, 2015, the Company issued to Crown Bridge Partners, LLC (CBP) a 5% convertible promissory note in the principal amount of $60,000 due April 2016 (the CBP Note). The CBP Note is convertible by CBP, at its option, any time after 180 days from issuance at a conversion price equal to 52% of the lowest trading prices for our common stock during the twenty-day trading period prior to the date on which CBP provides us with a conversion notice. The CBP Note becomes immediately due and payable upon the occurrence of certain events of default and subjects us to significant default penalties. On May 22, 2015, the Company issued to CBP a 5% convertible promissory note in the principal amount of $48,500 due May 2016 (the CBP Note 2). The CBP Note 2 is convertible by CBP, at its option, any time after 180 days from issuance at a conversion price equal to 52% of the lowest trading prices for our common stock during the twenty-day trading period prior to the date on which CBP provides us with a conversion notice. The CBP Note becomes immediately due and payable upon the occurrence of certain events of default and subjects us to significant default penalties. On May 26, 2015, the Company issued to CBP a convertible promissory note in the principal amount of $10,000 due May 2016 (the CBP Note 3). The CBP Note 3 is convertible at CBPs option into common stock of the Company at a conversion price equal to 52% of the lowest trading prices for our common stock during the twenty-day trading period prior to the date on which CBP provides us with a conversion notice. The CBP Note becomes immediately due and payable upon the occurrence of certain events of default and subjects us to significant default penalties. On June 4, 2015, the Company issued to CBP a convertible promissory note in the principal amount of $40,000 due June 2016 (the CBP Note 4). The CBP Note 4 is convertible at CBPs option into common stock of the Company at a conversion price equal to 52% of the lowest trading prices for our common stock during the twenty-day trading period prior to the date on which CBP provides us with a conversion notice. The CBP Note becomes immediately due and payable upon the occurrence of certain events of default and subjects us to significant default penalties. During the nine month period ended September 30, 2015, CBP converted $50,000 of principal into an aggregate of 5,033,506 shares of common stock. On September 18, 2015 the CBP Note 1 and CBP Note 2 were assigned by the Company to Carebourn Capital LLC. The assignment was treated as a debt extinguishment by the Company. (m) EMA Financial On June 1, 2015, the Company issued EMA Financials, LLC (EMA) a $75,000 10% convertible promissory note in the principal amount of $75,000 due June 2016. The EMA note is convertible by JSJ, at its option, any time after 180 days from issuance at a conversion price equal to the lower of the closing sale price of common stock on the principal market on the trading day immediately preceding the closing date and 50% of the lowest trading prices for our common stock during the twenty-day trading period prior to the date on which EMA provides us with a conversion notice. On September 22, 2015 the EMA Note was assigned by the Company to SBI Investments LLC. The assignment was treated as a debt extinguishment by the Company. (n) FireRock On January 6, 2015, we entered into a Securities Purchase Agreement (SPA) with FireRock Global Opportunities Fund L.P., a Delaware limited partnership (FireRock), pursuant to which we issued a convertible promissory note in the principal amount of $137,500 to FireRock (the FireRock Note). The FireRock Note was subject to an original issue discount of $15,000 resulting in our receipt of $122,500 in net proceeds. In connection with the SPA, we also issued 250,000 shares of our restricted common stock and a five-year warrant to purchase 500,000 shares of our common stock at an exercise price of $0.50 per share to FireRock. The SPA and a related Registration Rights Agreement between us and FireRock, dated January 6, 2015, provide for us to register the shares issuable upon conversion of the FireRock Note and the exercise of the warrant. We were required to file a registration statement with respect to the shares underlying the note and warrant within 60 days of the January 6, 2015 issuance date and have such registration statement declared effective not more than 150 days following the issuance date. We filed the registration statement on March 6, 2015. The note has a six-month term and provides for payment of interest on the principal amount at maturity at the rate of 1% per annum. The note, including accrued interest thereon, can be prepaid by us, in whole or in part, at any time prior to maturity, upon three trading days prior written notice, at a premium of 135%. The premium rate also applies to any default interest which may be due at the time of prepayment. Default interest, at the rate of 15% per annum, will become due in the event that we fail to pay principal or interest when due on the Notes. The note is convertible at any time after issuance at the lower of (i) $0.20 per share or (ii) 60% (50% upon an Event of Default) of the volume weighted average price for our common stock during the three consecutive trading days immediately preceding the trading day on which we receive a notice of conversion. The SPA further provides that if we complete a registered primary public offering of our securities at any time during which the notes remains outstanding, that the note can be converted at the closing of such offering at a conversion price equal to a 10% discount to the offering price to investors in the offering. We are required to reserve 20,000,000 shares of our common stock to cover note conversions and register all such shares in the registration statement. We are also required to cause our transfer agent to issue and transfer shares to the holders of the Notes within one trading day of our receipt of a conversion notice. The failure to do so constitutes an Event of Default under the Notes. Other Events of Default including, but are not limited to, our failure to pay principal and interest when due, a material breach by us of any of the terms of the FireRock transaction documents, a breach of any representation or warranty made by us in the FireRock transaction documents having a material adverse effect on the holder of the Notes, our appointment of a receiver or trustee, our becoming bankrupt, our stock becoming delisted, our failure to comply with our reporting requirements under the Securities Exchange Act of 1934, our cessation of operations, our dissolution or liquidation, our failure to maintain any of our material assets, certain restatements of our financial statements, our effectuation of a reverse stock split, and certain unvacated judgments against us involving more than $50,000. Subject to applicable cure periods, the Notes become immediately due and payable upon the occurrence and during the continuation of Events of Default. On July 7, 2015, the FireRock Note was in default due to failure to pay the principal amount and interest on the maturity date. As a result of certain default provisions contained in the note, upon default, the sum of $312,500 is required to be paid at the discretion of FireRock, in the form of conversion into common stock. During nine month period ended September 30, 2015, FireRock converted $205,500 of principal plus $1,297 accrued interest into an aggregate of 73,043,328 shares of common stock. On August 6, 2015, the balance of principal in the amount of $107,000 of the FireRock Note was assigned by the Company to Carebourn Capital LLC. The assignment was treated as a debt extinguishment by the Company. (o) Peak One On May 12, 2015, the Company issued Peak One Opportunity Fund (Peak One) a $70,000 convertible promissory note in the principal amount of $70,000 due May 2018. The Peak One note is convertible at Peak Ones option into common stock of the Company at a conversion price equal to 60% of the lowest bid price 20 days immediately preceding the date of conversion. Pursuant to this agreement, the Company also issued 75,000 shares of common stock to Peak One with a fair value of $8,625 (a relative fair value of $7,000). The relative fair value of the shares issued was recorded as debt discount and will be amortized to interest expense over the term of the note. On September 18, 2015 the Peak One note was assigned by the Company to LG Capital Funding, LLC. The assignment was treated as a debt extinguishment by the Company. (p) Rider Capital On June 15, 2015, the Company issued Rider Capital Corporation (Rider) a $50,000 convertible promissory note in the principal amount of $50,000 due June 2016. The Rider note is convertible by Rider, at its option, any time after 180 days from issuance at a conversion price equal to 30% of the lowest trading prices for our common stock during the sixty-day trading period prior to the date on which Rider provides us with a conversion notice. During June 2015, Rider converted $50,000 of principal into an aggregate of 2,634,882 shares of common stock. (q) River North Equity On March 18, 2015, we issued to River North Equity, LLC (River North) a 9% convertible promissory note in the principal amount of $52,500 (the River North Note). The River North Note was subject to a 10% original issue discount resulting in our receipt of $47,250 in net proceeds. The River North Note is convertible by River North, at its option, any time after 180 days from issuance at a conversion price equal to 60% of the lowest trading price for our common stock during the twenty trading days prior to the date on which River North provides us with a conversion notice. The conversion price formula will be reduced from 60% to 50% if we are not DWAC eligible. The River North Note contains a right of first refusal in favor of River North with regard to certain future borrowings by us for the term of the River North Note. The River North Note may be prepaid by us any time prior to our receipt of a conversion notice from River North in an amount equal to 105% multiplied by the sum of the then outstanding principal amount of the River North Note plus (i) accrued and unpaid interest due on the principal amount; and (ii) default interest and penalty payments, if any, due on the River North Note at the time of prepayment. The River North Note becomes immediately due and payable upon the occurrence of certain events of default and subjects us to significant default penalties. On September 14, 2015 the River North Note was assigned to Bluestem Advisors LLC. The assignment was treated as a debt extinguishment by the Company. (r) Tangiers On January 23, 2015, we issued a one-year 10% convertible promissory note to Tangiers Investment Group, LLC (Tangiers) in the principal amount of $55,000 (the Tangiers Note). The Tangiers Note was subject to an original issue discount of $5,000 resulting in net proceeds of $50,000. The Tangiers Note, including accrued interest due thereon, is convertible by Tangiers, at its option, any time after 180 days from the date of issuance at a conversion price equal to 52% of the lowest trading price for our common stock during the twenty trading days prior to conversion. The conversion price will be further reduced by 10% if we are placed on chill status with the Depository Trust Company until such chill is remedied and will be reduced by 5% if we are not Deposits and Withdrawal at Custodian eligible. The Tangiers Note may be prepaid by us within 180 days from the date of issuance at a premium ranging from 115% for a prepayment within the initial 30 days to 145% for a prepayment after 150 days from the date of issuance but on or prior to 180 days from the date of issuance. The prepayment premium for the 31-60 day period is 121%, for the 61-90 day period is 127%, for the 91-120 day period is 133%, and for the 121-150 day period is 139%. The Tangiers Note becomes immediately due and payable upon the occurrence of certain events of default and subjects us to significant default penalties. By mutual agreement, Tangiers may provide us with additional funding on the same terms up to an aggregate principal amount of $330,000 during the 9-month period which commenced on January 23, 2015. During July 2015, Tangiers converted $55,000 of principal into an aggregate of 32,610,499 shares of common stock. (s) Union Capital On March 3, 2015, we issued an 8% convertible promissory note to Union Capital, LLC (Union) in the principal amount of $44,000 due March 3, 2016 (Union Note). The Note was subject to an original issue discount resulting in net proceeds of $38,000. The Note is convertible by Union, at its option, any time after 180 days from the date of issuance at a conversion price equal to 62% of the lowest closing bid price for our common stock for the twenty trading days prior to the date upon which Union provides us with a notice of conversion. The Note may be prepaid by us any time within 180 days from the date of issuance at a premium ranging from 115% for a prepayment within the initial 30 days to 145% for a prepayment after 150 days from the date of issuance but on or prior to 180 days from the date of issuance. The prepayment premium for the 31-60 day period is 121%, for the 61-90 day period is 127%, for the 91-120 day period is 133%, and for the 121-150 day period is 139%. The Note becomes immediately due and payable upon the occurrence of certain events of default and subjects us to significant default penalties. During September 2015, Union Capital converted $2,420 of principal into an aggregate of 3,132,122 shares of common stock. On September 22, 2015 the balance of $41,580 in principal plus accrued interest in the Union Note was assigned to GHS Investments, LLC. The assignment was treated as a debt extinguishment by the Company. Debt discount The conversion price of the aforementioned convertible notes are based on a variable that is not an input to the fair value of a fixed-for-fixed option as defined under FASB ASC Topic No. 815 - 40. The fair value of the conversion features was recognized as derivative instruments at the issuance dates and are measured at fair value at each reporting period. Debt discount was recorded up to the purchase price of the notes and is amortized to interest expense over the term of the notes. The fair value of the beneficial conversion feature in excess of the principal amount allocated to the notes was expensed immediately as unrealized loss on derivative obligation. Following is a summary of the debt discount for each of the convertible notes: Noteholder December 31, 2014 Discount Debt Extinguishment Expense September 30, 2015 Bluestem Advisors $ - $ 80,278 $ $ (33,974 ) $ 46,304 Carebourn Capital - 528,841 (191,419 ) 337,422 GHS Investments - 63,412 (21,232 ) 42,180 JMJ Financial 55,556 27,778 (7,100 ) (41,563 ) 34,671 JSJ Investments - 50,000 (24,275 ) 25,725 KBM 62,800 48,000 (42,705 ) (68,095 ) - LG 105,200 283,275 (7,500 ) (129,285 ) 251,690 RDW Capital - 200,000 (144,565 ) 55,435 SBI Investments - 554,385 (166,517 ) 387,868 VGI - 127,000 (32,552 ) (37,979 ) 56,469 Adar Bays - 44,000 (22,060 ) (21,940 ) - Crown Bridge Partners - 158,500 (112,188 ) (46,312 ) - EMA Financial - 75,000 (52,664 ) (22,336 ) - FireRock - 301,385 - (301,385 ) - Peak One - 70,000 (62,719 ) (7,281 ) - Rider Capital - 50,000 (50,000 ) - - River North - 52,500 (26,680 ) (25,820 ) - Tangiers - 55,000 - (55,000 ) - Union Capital 44,000 (18,459 ) (25,541 ) - Total $ 223,556 $ 2,813,354 $ (502,127 ) $ (1,364,519 ) $ 1,237,764 |
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES | 9 Months Ended |
Sep. 30, 2015 | |
DERIVATIVE LIABILITIES | |
DERIVATIVE LIABILITIES | 6. DERIVATIVE LIABILITIES Warrants Boeckmann Warrants The Company has determined that certain warrants the Company has issued contain provisions that protect holders from future issuances of the Companys common stock at prices below such warrants respective exercise prices and these provisions could result in modification of the warrants exercise price based on a variable that is not an input to the fair value of a fixed-for-fixed option. The Company issued 1,800,000 warrants in connection with the issuance of 600,000 shares of common stock sold for cash during June 2014. All of the warrants vested immediately. These warrants contain anti-dilution provisions that provide for a reduction in the exercise price of such warrants in the event that future common stock (or securities convertible into or exercisable for common stock) is issued (or becomes contractually issuable) at a price per share (a Lower Price) that is less than the exercise price of such warrant at the relevant time. The amount of any such adjustment is determined in accordance with the provisions of the relevant warrant agreement and depends upon the number of shares of common stock issued (or deemed issued) at the Lower Price and the extent to which the Lower Price is less than the exercise price of the warrant at the relevant time. In addition, the number of shares issuable upon exercise of these warrants will be increased inversely proportional to any decrease in the exercise price, thus preserving the aggregate exercise price of the warrants both before and after any such adjustment. VC Advisors On May 19, 2015, we entered into an Advisory Agreement (the VC Agreement) with VC Advisory, LLC, a Nevada limited liability corporation (VC) pursuant to which VC is providing us with financial consulting services (the Services). (See Note 8 Commitments). The Agreement also requires us to issue 250,000 3-year warrants to VC, each exercisable for the purchase of one share of common stock at an exercise price equal to 102% of the average of the 10 trading day value weighted average closing price for our common stock during the period immediately prior to the date of the VC Agreement. We are required to issue 1,500,000 additional warrants to VC, each exercisable for the purchase of one share of our common stock at an exercise price equal to 102% of the average of the 10 trading day value weighted average closing price for our stock during the period immediately prior to the date of the VC Agreement in the event that VC introduces us to a party during the term who provides us with financing of not less than $5,000,000 during the term or within twelve months thereafter. The fair values of the aforementioned Boeckmann and VC warrants issued were recognized as derivative warrant instruments at issuance and are measured at fair value at each reporting period. The Company determined the fair values of these warrants using a Black-Scholes and lattice pricing model, as applicable. Activity for derivative warrant liabilities during the nine months ended September 30, 2015 was as follows: Balance at December 31, 2014 $ 269,929 Initial valuation of derivative liabilities upon issuance of new warrants (VC Advisors) 250,000 warrants 19,509 Decrease in fair value of derivative liability (39,864 ) Balance at September 30, 2015 $ 249,574 The fair value of the aforementioned warrants was valued on September 30, 2015 using a multi-nomial lattice model as to the Boeckmann Warrants with the following weighted average assumptions: (1) risk free interest rate 1.37%, (2) term of 6.71 years, (3) expected stock volatility of 180%, (4) expected dividend rate of 0%, and (5) common stock price of $0.002. The fair value of the VC Advisors warrants was valued on September 30, 2015 using a Black-Scholes model with the following weighted average assumptions: (1) risk free interest rate 1.01 %, (2) term of 3 years, (3) expected stock volatility of 118.04%, (4) expected dividend rate of 0%, and (5) common stock price of $0.11. Derivative conversion feature on convertible debt Activity for derivative liabilities related to the variable conversion features on convertible debt during the nine months ended September 30, 2015 was as follows: Lender Balance at December 31, 2014 Initial valuation of derivative liabilities upon issuance of variable feature convertible notes Debt extinguishment /conversions Change in fair value of derivative liability Balance at September 30, 2015 Bluestem Advisors $ - $ 229,228 $ (162,125 ) $ 23,712 $ 90,815 Carebourn Capital - 1,285,894 (203,269 ) (317,671 ) 764,954 GHS Investments - 295,488 (93,934 ) (115,550 ) 86,004 JMJ Financial 58,115 25,000 (55,478 ) 85,867 113,504 JSJ Investments - 44,000 - 62,799 106,799 KBM 66,282 45,000 (78,912 ) (32,370 ) - LG 110,867 406,707 (176,374 ) 347,805 689,005 RDW Capital - 224,594 (168,673 ) 114,801 170,722 SBI Investments - 758,819 (188,602 ) 567,442 1,137,659 VGI - 128,716 (49,533 ) 7,328 86,511 Adar Bays - 37,500 (59,520 ) 22,020 - Crown Bridge Partners - 140,000 (541,419 ) 401,419 - EMA Financial - 71,500 (327,585 ) 256,085 - FireRock - 275,271 (314,297 ) 39,026 - Peak One - 48,500 (161,984 ) 113,484 - Rider Capital - 50,000 (89,496 ) 39,496 - River North - 44,750 (182,283 ) 137,533 - Tangiers - 50,000 (123,455 ) 73,455 - Union Capital - 38,000 (198,032 ) 160,032 - Total $ 235,264 $ 4,198,967 $ (3,174,971 ) $ 1,986,713 $ 3,245,973 The fair value of these derivatives was valued on the date of the issuances of the 2015 convertible notes using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rate 0.09% - 0.36%, (2) term of 0.50- 3.0 years, (3) expected stock volatility of 120% - 269%, (4) expected dividend rate of 0%, and (5) common stock price of $0.002 - $0.11. The fair value of these derivatives was valued on September 30, 2015 using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rate 0.31%, (2) term of 0.28 1.58 years, (3) expected stock volatility of 240% - 287%, (4) expected dividend rate of 0%, and (5) common stock price of $0.002. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2015 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | 7. STOCKHOLDERS EQUITY Authorized shares On September 25, 2015, the Company filed a Certificate of Amendment to its Articles of Incorporation with the State of Nevada to increase the number of authorized shares of common stock from 1,000,000,000 shares to 5,000,000,000 shares. Sales of Common Stock for Cash During the nine months ended September 30, 2015, the Company issued 1,000,000 shares of common stock to individuals at a price of $0.05 per share for total cash proceeds of $50,000. Aladdin On November 25, 2014, we entered into an Equity Purchase Agreement and a Registration Rights Agreement with Aladdin Trading, LLC (Aladdin) in order to establish an additional source of funding. Under the Investment Agreement, Aladdin agreed to provide us with up to $5,000,000 of funding upon effectiveness of a registration statement. Following effectiveness of the registration statement, we can deliver puts to Aladdin under the Equity Purchase Agreement under which Aladdin will be obligated to purchase shares of our common stock based on the investment amount specified in each put notice, which investment amount may be any amount up to $5,000,000 less the investment amount received by us from all prior puts, if any. Puts may be delivered by us to Aladdin until the earlier of December 31, 2015 or the date on which Aladdin has purchased an aggregate of $5,000,000 of put shares. The number of shares of our common stock that Aladdin will purchase pursuant to each put notice (Put Shares) will be determined by dividing the investment amount specified in the put by the purchase price. The purchase price per share of common stock will be set at 50% of the Market Price for our common stock with Market Price being defined as the volume weighted average trading price for our common stock during the three consecutive trading days immediately following the date of our put notice to Aladdin (the Pricing Period). There is no minimum amount that we can put to Aladdin at any one time although the amount may be limited to the amount of securities that can be registered at any given time. On the put notice date, we are required to deliver put shares (Estimated Put Shares) to Aladdin in an amount determined by dividing the closing price on the trading day immediately preceding the put notice date multiplied by 50% and Aladdin is required to simultaneously deliver to us the investment amount indicated on the put notice. At the end of the Pricing Period, when the purchase price is established and the number of Put Shares for a particular put is determined, Aladdin must return to us any excess Put Shares provided as Estimated Put Shares or alternatively we must deliver to Aladdin any additional Put Shares required to cover the shortfall between the amount of Estimated Put Shares and the amount of Put Shares. At the end of the pricing period we must also return to Aladdin any excess related to the investment amount previously delivered to us. Pursuant to the Equity Purchase Agreement, Aladdin and its affiliates will not be issued shares of our common stock that would result in Aladdins beneficial ownership equaling more than 9.99% of our outstanding common stock. Pursuant to the Registration Rights Agreement, we will be registering 20,000,000 shares of our common stock for issuance to and sale by Aladdin pursuant to the Equity Purchase Agreement. Unless the price of our common stock increases substantially, we will not have access to the full commitment amount under the Equity Purchase Agreement. On February 2, 2015, we delivered a put notice to Aladdin for $75,000. This resulted in our issuance of 1,153,847 shares to Aladdin. On February 20, 2015, we delivered a second put notice to Aladdin for $100,000. This resulted in our issuance of 1,538,462 shares to Aladdin, of which 198,877 shares were required to be returned to us for cancellation resulting in a net issuance of 1,339,585 shares to Aladdin as the 1,538,462 share issuance represented an estimate as to the number of shares covered by the put. As of March 31, 2015, Aladdin owed us $25,000 from the second put, of which $20,000 was received in May 2015. On March 10, 2015, we delivered a third put notice to Aladdin for $100,000. This resulted in our issuance of 2,352,942 shares to Aladdin. Based upon the price of our common stock for the third put valuation period we were required to issue an additional 58,322 shares to Aladdin resulting in a total issuance of 2,411,265 shares pursuant to the third put. We have deducted 58,322 shares from the share amount required to be returned to us from the second put and are now entitled to the return of 140,554 shares from the second put share issuance. Aladdin owes us $100,000 from the third put. During the six months ended June 30, 2015, the Company received $258,000 from Aladdin for the issuance of common stock (as described above). On August 25, 2015, we terminated our November 25, 2014 Equity Purchase Agreement (EP Agreement) with Aladdin Trading, LLC (Aladdin). Common Stock issued for debt conversion during the period ended September 30, 2015 Note Holder Conversion Price ($) Number of shares issued Amount ($) Carebourn Capital #1 0.001615 7,250,725 11,710 Carebourn Capital #2 0.000950 12,686,153 12,052 Carebourn Capital #3 0.000630 16,947,062 10,677 Carebourn Capital #4 0.000630 15,677,468 9,877 Carebourn Capital #5 0.000615 2,349,268 1,445 Carebourn Partners #1 0.000760 14,441,883 10,976 Carebourn Partners #2 0.000715 15,330,835 10,962 Carebourn Partners #3 0.000715 4,283,398 3,063 Carebourn Partners #4* 0.000615 19,895,732 12,236 Carebourn Partners #5 0.000615 19,895,739 12,236 Carebourn Partners #6 0.000615 21,241,737 13,064 Carebourn Partners #7* 0.000615 24,172,277 14,838 Carebourn Partners #8* 0.000650 25,356,718 16,482 Carebourn Partners #9* 0.000660 19,915,848 13,144 Crown Bridge Partners #1 0.041600 240,384 10,000 Crown Bridge Partners #2 0.031200 400,641 12500 Crown Bridge Partners #3 0.026000 528,846 13750 Crown Bridge Partners #4 0.008800 795,454 7,000 Crown Bridge Partners #5 0.002200 3,068,181 6,750 FireRock Global #1 0.009417 3,185,897 30,000 FireRock Global #2 0.006933 3,605,786 25,000 FireRock Global #3 0.005217 3,833,914 20,000 FireRock Global #4 0.003685 4,070,556 15,000 FireRock Global #5 0.002850 4,561,403 13,000 FireRock Global #6 0.002550 4,430,196 11,297 FireRock Global #7 0.002583 5,032,322 13,000 FireRock Global #8 0.002300 7,173,913 16,500 FireRock Global #9 0.002000 7,500,000 15,000 FireRock Global #10 0.001883 9,292,199 17,500 FireRock Global #11 0.001600 10,000,000 16,000 FireRock Global #12 0.001400 10,357,142 14,500 JMJ Financial #1 0.036000 200,000 7,200 JMJ Financial #2 0.009630 1,000,000 9,630 JMJ Financial #3 0.002340 4,500,000 10,530 JMJ Financial #4 0.001920 3,700,000 7,104 LG Capital #1 0.037200 419,310 15,598 LG Capital #2 0.010540 1,486,470 15667.4 LG Capital #3 0.002852 5,510,767 15,717 LG Capital #4 0.001178 9,814,728 11,562 LG Capital #5 0.000868 13,369,988 11,605 LG Capital #6 0.000806 14,419,392 11,622 LG Capital #7 0.000806 13,133,014 10,585 LG Capital #8 0.000806 14,467,245 11,661 LG Capital #9 0.000806 14,494,168 11,682 RDW Capital (Redwood) #1 0.007500 3,545,000 26,588 RDW Capital (Redwood) #2 0.002520 4,000,000 10,080 RDW Capital (Redwood) #3 0.002280 5,300,000 12,084 RDW Capital (Redwood) #4 0.002280 5,600,000 12,768 RDW Capital (Redwood) #5 0.001980 5,960,000 11,801 RDW Capital (Redwood) #6 0.001380 9,500,000 13,110 RDW Capital (Redwood) #7 0.001200 10,000,000 12,000 RDW Capital (Redwood) #8 0.001100 1,427,000 1,570 Rider Capital #1 0.021001 1,111,111 23,334 Rider Capital #2 0.017500 1,523,771 26,666 SBI (Sea Otter) #1 0.009950 3,381,271 33,644 SBI (Sea Otter) #2 0.001700 7,383,902 12,553 SBI (Sea Otter) #3 0.001000 11,903,343 11,903 SBI (Sea Otter) #4 0.001000 6,294,583 6,295 SBI (Sea Otter) #5 0.001000 21,103,453 21,103 Tangiers Investment Group #1 0.001976 11,133,603 22,000 Tangiers Investment Group #2 0.001716 11,655,012 20,000 Tangiers Investment Group #3 0.001612 9,821,884 15,833 Union Capital #1 0.000806 3,132,122 2,524 Bluestem #1 0.000660 15,151,515 10,000 Bluestem #2 0.000660 33,681,818 22,230 GHS Investments #1 0.000780 25,844,000 20,158 Common Stock issued for Services Gannon Giguiere On February 2, 2015, we entered into Amendment No. 2 to the November 21, 2012 Employment Services Agreement, as amended on March 10, 2014, between us and Gannon Giguiere, our Director and former CEO. The amendment reduced the CEOs base annual salary from $180,000 to $1, clarified the provision under which we can issue bonuses to the CEO, and provided for the issuance of 5,000,000 shares of our common stock (which were granted piggyback registration rights) and 2,000,000 stock options which have a ten-year term and are exercisable for the purchase of 2,000,000 shares of our common stock at a price of $0.10 per share. The stock options vest monthly and ratably over the 36-month period commencing upon issuance. The fair value of the 5,000,000 shares of common stock issued was $0.12 per share ($599,500). During the nine months ended September 30, 2015, the Company recorded stock-based compensation of $599,500 in connection with the issuance of these shares. On February 2, 2015, $351,000 in accrued salary due to Gannon Giguiere, was converted into shares of our restricted common stock at a conversion price of $0.07 per share resulting in the issuance of 5,014,286 shares of common stock which were granted piggyback registration rights. The fair value of the common stock issued was $0.12 per share ($601,213). The Company recorded the difference between the accrued salary and the fair value of the shares issued of $250,213 as stock-based compensation during the nine months ended September 30, 2015. On February 2, 2015, an aggregate of $160,550 of related party notes payable and $431 of interest was converted into shares of our restricted common stock at a conversion price of $0.07 per share resulting in the issuance of 2,299,729 shares of common stock to Mr. Giguiere. Piggyback registration rights apply to these shares. The fair value of the common stock issued was $0.12 per share ($275,738). The Company recorded the difference between the related notes payable and accrued interest and the fair value of the shares issued of $114,757 as stock-based compensation during the nine months ended September 30, 2015. Alan Johnson On February 2, 2015, we entered into Amendment No. 2 to the November 21, 2012 Employment Services Agreement, as amended on March 10, 2014, between us and Alan Johnson, our Chief Corporate Development Officer. The amendment reduced Mr. Johnsons base annual salary from $180,000 to $1, clarified the provision under which we can issue bonuses to Mr. Johnson, and provided for the issuance of 2,000,000 shares of our common stock (which were granted piggyback registration rights) and 1,000,000 stock options to Mr. Johnson upon execution of the amendment. The stock options were issued under our 2015 Equity Incentive Plan as non-statutory stock options. The stock options have a ten-year term and are exercisable for the purchase of 1,000,000 shares of our common stock at a price of $0.10 per share. The stock options vest monthly and ratably over the 36-month period commencing upon issuance. The fair value of the 2,000,000 shares of common stock issued was $0.12 per share ($239,800). During the nine months ended September 30, 2015, the Company recorded stock-based compensation of $239,800 in connection with the issuance of these shares. On February 2, 2015, $339,750 in accrued salary due to Alan Johnson was converted into shares of our restricted common stock at a conversion price of $0.07 per share resulting in the issuance of 4,853,571 shares of common stock to Mr. Johnson. Piggyback registration rights apply to these shares. The fair value of the common stock issued was $0.12 per share ($581,943). The Company recorded the difference between the accrued salary and the fair value of the shares issued of $242,193 as stock-based compensation during the nine months ended September 30, 2015. On February 2, 2015, an aggregate of $159,842 of related party notes payable and $1,139 of interest was converted into shares of our restricted common stock at a conversion price of $0.07 per share resulting in the issuance of 2,299,729 shares of common stock to Mr. Johnson. Piggyback registration rights apply to these shares. The fair value of the common stock issued was $0.12 per share ($275,738). The Company recorded the difference between the related notes payable and accrued interest and the fair value of the shares issued of $114,757 as stock-based compensation during the nine months ended September 30, 2015. Mike Rountree On February 2, 2015, we entered into Amendment No. 1 to the March 10, 2014 Employment Services agreement between us and Michael Rountree, our Chief Financial Officer and Treasurer. The Amendment reduced Mr. Rountrees base annual salary from $180,000 to $1, clarified the provision under which we can issue bonuses to Mr. Rountree and provided for the issuance of 2,000,000 shares of our common stock (which were granted piggyback registration rights) and 1,000,000 stock options to Mr. Rountree upon execution of the amendment. The stock options were issued under our 2015 Equity Incentive Plan as non-statutory stock options. The stock options have a ten-year term and are exercisable for the purchase of 1,000,000 shares of our common stock at a price of $0.10 per share. The stock options vest monthly and ratably over the 36 month period commencing upon issuance. The fair value of the 2,000,000 shares of common stock issued was $0.12 per share ($239,800). During the nine months ended September 30, 2015, the Company recorded stock-based compensation of $239,800 in connection with the issuance of these shares. On February 2, 2015, $227,435 in accrued salary due to Michael Rountree, our Treasurer and Chief Financial Officer, was converted into shares of our restricted common stock at a conversion price of $0.07 per share resulting in the issuance of 3,249,071 shares of common stock to Mr. Rountree. Piggyback registration rights apply to these shares. The fair value of the common stock issued was $0.12 per share ($389,564). The Company recorded the difference between the accrued salary and the fair value of the shares issued of $162,129 as stock-based compensation during the nine months ended September 30, 2015. On February 2, 2015, an aggregate of $40,000 of related party notes payable and $143 of interest was converted into shares of our restricted common stock at a conversion price of $0.07 per share resulting in the issuance of 573,471 shares of common stock to Mr. Rountree. Piggyback registration rights apply to these shares. The fair value of the common stock issued was $0.12 per share ($68,759). The Company recorded the difference between the related notes payable and accrued interest and the fair value of the shares issued of $28,616 as stock-based compensation during the nine months ended September 30, 2015. Other issuances of common stock for services The Company issued 3,400,000 shares of common stock in aggregate for consulting services during the nine months ended September 30, 2015 and recorded stock-based compensation of $399,300 based on the grant date fair value of the common shares issued. The Company issued 8,000,000 shares for services provided to the Company from two entities and recorded consulting fees of $128,000 based on the grant date fair value of the common shares issued. Series A Preferred Stock issued for services On June 3, 2015, the Company issued 1,000,000 shares of the Companys Series A preferred stock to a Director of the Company for services. Each share of Series A preferred stock shall have 1,000 votes on the election of their directors and for all other purposes. The Series A preferred stock is not convertible to common stock and has no dividend rights or liquidation preference. The Company obtained a third party valuation of the preferred stock and recorded stock-based compensation of $920,800 during the nine months ended September 30, 2015. On September 26, 2015, the Company issued 4,000,000 shares of the Companys Series A Preferred Stock to the President of the Company for services. Each share of Series A preferred stock shall have 1,000 votes on the election of their directors and for all other purposes. The Series A preferred stock is not convertible to common stock and has no dividend rights or liquidation preference. The Company obtained a third party valuation of the preferred stock and recorded stock-based compensation of $317,100 during the nine months ended September 30, 2015. 2015 Equity Incentive Plan On February 2, 2015, our board of directors approved our 2015 Equity Incentive Plan. Our shareholders have yet to approve the 2015 Equity Incentive Plan and unless they do so prior to February 2, 2016, we will not be able to issue incentive stock options under the 2015 Equity Incentive Plan. A total of 11,000,000 shares of our common stock are reserved for issuance under the 2015 Plan. If an incentive award granted under the 2015 Plan expires, terminates, is unexercised or is forfeited, or if any shares are surrendered to us in connection with an incentive award, the shares subject to such award and the surrendered shares will become available for further awards under the 2015 Plan. Shares issued under the 2015 Plan through the settlement, assumption or substitution of outstanding awards or obligations to grant future awards as a condition of acquiring another entity are not expected to reduce the maximum number of shares available under the 2015 Plan. In addition, the number of shares of common stock subject to the 2015 Plan and the number of shares and terms of any incentive award are subject to adjustment in the event of any stock dividend, spin-off, split-up, stock split, reverse stock split, recapitalization, reclassification, merger, consolidation, liquidation, business combination or exchange of shares or similar transaction. The compensation committee of the Board, or the Board in the absence of such a committee, will administer the 2015 Plan and grants made thereunder. Subject to the terms of the 2015 Plan, the compensation committee has complete authority and discretion to determine the terms of awards under the 2015 Plan. Any officer or other employee of the Company or its affiliates, or an individual that the Company or an affiliate has engaged to become an officer or employee, or a consultant or advisor who provides services to the Company or its affiliates, including a non-employee director of the Board, is eligible to receive awards under the 2015 Plan. Our Board of Directors or if then in place, the compensation committee of our Board of Directors, may amend, suspend or terminate the 2015 Plan without stockholder approval or ratification at any time or from time to time. No change may be made that increases the total number of shares of our common stock reserved for issuance under the 2015 Plan or reduces the minimum exercise price for options or exchange of options for other incentive awards. Unless sooner terminated, the 2015 Plan terminates ten years after the date on which it was adopted. Stock Option Awards On February 2, 2015, ten-year non-statutory stock options to purchase an aggregate of 6,950,000 shares of our common stock, vesting monthly and ratably over the 36 month period commencing upon issuance on the first day of each month during the vesting period with an initial vesting date of March 1, 2015 and a final vesting date of February 1, 2018 and an exercise price of $0.10 per share were issued under the 2015 Equity Incentive Plan to our employees. The options have a 10-year term. The stock price on the grant date was $0.03 per share. As a result, the intrinsic value for these options on the grant date was $0. The fair value of these options was $816,037 and was valued on the date of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rate 1.68%, (2) term of 10 years, (3) expected stock volatility of 176%, and (4) expected dividend rate of 0%. A summary of stock option activity is presented below: Number of Shares Weighted-average Exercise Price Weighted-average Remaining Contractual Term (years) Aggregate Intrinsic Value Outstanding at December 31, 2014 2,583,744 $ 0.81 $ - Granted 6,950,000 $ 0.10 Forfeited/Cancelled/Expired (551,947 ) $ 0.41 Outstanding at September 30, 2015 8,981,797 $ 0.28 8.98 $ - Exercisable at September 30, 2015 3,159,218 $ 0.44 8.55 $ - During the nine months ended September 30, 2015 and 2014, the Company recognized stock-based compensation expense of $1,177,752 and $2,626,715, respectively, related to stock options. As of September 30, 2015, there was $863,633 of total unrecognized compensation cost related to non-vested stock options. Warrant Awards On May 19, 2015, the Company issued warrants to a third party to purchase 250,000 shares of its common stock granted with an exercise price of $0.1083 per share. The stock price on the grant date was $0.11 per share. As a result, the intrinsic value for these warrants on the grant date was $0. The fair value of these warrants was approximately $23,284 and was valued on the date of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rate 1.01%, (2) term of 3 years, (3) expected stock volatility of 163.47%, and (4) expected dividend rate of 0%. All of the warrants vested immediately. In March 2015, the Company issued 500,000 shares of common stock and 500,000 warrants to an investor for cash proceeds of $25,000. The warrants have a 10-year term and have an exercise price of $0.10 per share. The stock price on the grant date was $0.06 per share. As a result, the intrinsic value for these warrants on the grant date was $0. The fair value of these warrants was $29,000 and was valued on the date of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rate 1.98%, (2) term of 10 years, (3) expected stock volatility of 147%, and (4) expected dividend rate of 0%. All of the warrants vested immediately. In February 2015, the 7 members of our Advisory Board were each issued a ten-year warrant to purchase 100,000 shares of our common stock at an exercise price of $0.10 per share resulting in the issuance of an aggregate of 700,000 warrants. The stock price on the grant date was $0.12 per share. As a result, the aggregate intrinsic value for these warrants on the grant date was $1,400. The fair value of these warrants was $82,650 and was valued on the date of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rate 1.68%, (2) term of 10 years, (3) expected stock volatility of 148%, and (4) expected dividend rate of 0%. All of the warrants vested immediately. In February 2015, 11 advisors/consultants were each issued a ten-year warrant to purchase 100,000 shares of our common stock at an exercise price of $0.10 per share resulting in the issuance of an aggregate of 1,100,000 warrants. The stock price on the grant date was $0.12 per share. As a result, the aggregate intrinsic value for these warrants on the grant date was $2,200. The fair value of these warrants was $129,880 and was valued on the date of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rate 1.68%, (2) term of 10 years, (3) expected stock volatility of 148%, and (4) expected dividend rate of 0%. All of the warrants vested immediately. In January 2015, a lender (FireRock) was issued 500,000 warrants in connection with the issuance of a convertible note agreement. The warrants have a 5-year term and have an exercise price of $0.10 per share. The stock price on the grant date was $0.10 per share. As a result, the intrinsic value for these warrants on the grant date was $0. The fair value of these warrants was $38,774 and was valued on the date of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rate 1.29%, (2) term of 5 years, (3) expected stock volatility of 107%, and (4) expected dividend rate of 0%. All of the warrants vested immediately. On September 1, 2015, the Company issued 1,000,000 warrants to Mike Hogue. The warrants have a 10-year term and have an exercise price of $0.001 per share. The stock price on the grant date was $0.002 per share. As a result, the intrinsic value for these warrants on the grant date was $1,000. The fair value of these warrants was $1,960 and was valued on the date of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rate 2.17%, (2) term of 5 years, (3) expected stock volatility of 135.63%, and (4) expected dividend rate of 0%. All of the warrants vested immediately. A summary of warrant activity is presented below: Number of Shares Weighted-average Exercise Price Remaining Contractual Term (years) Aggregate Intrinsic Value Outstanding at December 31, 2014 3,760,831 $ 0.75 - - Granted 4,050,000 $ 0.10 - - Warrants issued pursuant to anti-dilution adjustments 53,448,344 $ 0.48 - - Exercised - $ - - - Expired/Forfeited (250,000 ) $ 1.00 - - Outstanding and exercisable at September 30, 2015 61,009,175 $ 0.45 7.30 $ 26,500 |
COMMITMENTS
COMMITMENTS | 9 Months Ended |
Sep. 30, 2015 | |
COMMITMENTS | |
COMMITMENTS | 8. COMMITMENTS Consulting Agreements During August 2014, the Company entered into a 2-year consulting services agreement with an individual. Pursuant to the agreement, the individual will be paid $50,000 per year. In connection with the consulting services agreement, the individual assigned to the Company all of the assets owned by the individual related to the individuals business operations being conducted through the name Gift Ya Now including, but not limited to, software code base, original design / creative elements, domain name and all strategic business relationships. The assets assigned to the Company had a fair value of $0. On October 28, 2014, the Company entered into a consulting agreement with OTC Media, LLC (OTC Media) pursuant to which OTC Media provides us with investor and public relations services. The services may include public relations and direct mail campaigns. In connection therewith, we pay OTC Media a service fee equal to 20% of the cost of the campaigns together with reimbursement for the cost of the campaigns. The consulting agreement is in effect until December 31, 2015 and is subject to renewal. On May 19, 2015, the Company entered into a twelve (12) month consulting agreement with VC Advisors (VC) pursuant to which VC provides us with financial consulting services on a non-exclusive basis. The services may be related to corporate finance matters, joint ventures and financial strategies. In connection therewith, we pay VC a service fee equal to $15,000 per month, payable in cash or common stock. Associates, PLC (SD Mitchell) pursuant to which SD Mitchell advise us with certain legal, corporate and business operations and more specifically regarding to public filings and compliance with regard to the Company. In connection therewith, we pay SD Mitchell a service fee equal to $1,500 per month for the review of Form 10-K, Form 10-Q, Form 8-Ks and review of contractual agreements and we pay consultant in the amount of $200 per hour for assistance in preparation of contracts, correspondence, engaging in negotiations, as well as emails and telephone calls. Employment Agreements The Company signed an employment agreement with its Chief Financial Officer. Pursuant to the agreement, in the event the Chief Financial Officer is terminated without cause, the CFO will be entitled to receive all compensation, including any bonus payments, accrued through the date of termination together with all compensation, including bonus payments, earned through the severance period which is defined as a period of 18 months from termination if more than 18 months remain on the term of the employment agreement at the time of termination or as a period of 12 months from termination, if less than 18 months remain on the term of the employment agreement at the time of termination. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2015 | |
FAIR VALUE MEASUREMENTS: | |
FAIR VALUE MEASUREMENTS | 9. FAIR VALUE MEASUREMENTS The following table sets forth, by level within the fair value hierarchy, the Companys financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2015: Quoted Prices In Active Significant Total Markets for Other Significant Carrying Identical Observable Unobservable Value as of Assets Inputs Inputs September 30, Description (Level 1) (Level 2) (Level 3) 2015 Warrant derivatives $ - $ - $ 249,574 $ 249,574 Variable conversion features convertible debt derivatives $ - $ - $ 3,245,974 $ 3,245,974 $ - $ - $ 3,495,548 $ 3,495,548 The following table sets forth, by level within the fair value hierarchy, the Companys financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2014: Quoted Prices In Active Significant Total Markets for Other Significant Carrying Identical Observable Unobservable Value as of Assets Inputs Inputs September 30, Description (Level 1) (Level 2) (Level 3) 2014 Derivative liabilities - warrant instruments $ - $ - $ 2,651,155 $ 2,651,155 The following table sets forth a reconciliation of changes in the fair value of financial liabilities classified as level 3 in the fair value hierarchy: Significant Unobservable Inputs (Level 3) Nine Months Ended September 30, 2015 2014 Beginning balance $ 505,193 $ - Additions 4,198,967 449,624 Debt conversion/extinguishment (3,174,971 ) - Change in fair value 1,966,358 2,201,531 Ending balance $ 3,495,547 $ 2,651,155 Change in unrealized gain included in earnings $ 1,966,358 $ 2,201,531 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2015 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 10. SUBSEQUENT EVENTS Debt issuances Subsequent to September 30, 2015 the Company issued a total of 532,370,521 shares in respect of conversion notices received for a total of $279,513 in principal and interest related to various Convertbile Notes as discusssed in Note 5 above. Change in Registered Public Accounting Firm On October 16, 2015 the Company notified its independent registered public accounting firm, GBH CPAs, PC (GBH), that the Company had decided to change auditors and was therefore dismissing GBH, effective immediately. The Companys decision was approved by the Companys board of directors, acting as the audit committee, on that same day, and concurrent with GBHs dismissal, the board of directors appointed BF Borgers CPA PC (Borgers) as the Companys new independent registered public accounting firm. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES (POLICIES) | 9 Months Ended |
Sep. 30, 2015 | |
SIGNIFICANT ACCOUNTING POLICIES (POLICIES): | |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim consolidated financial statements of Eventure Interactive, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (SEC), and should be read in conjunction with the audited financial statements and notes thereto contained in the Companys latest Annual Report on Form 10-K filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent year ended December 31, 2014, as reported in Form 10-K, have been omitted. |
Principles of Consolidation | Principles of Consolidation |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Companys estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. |
Basic and Diluted Loss Per Common Share | Basic and Diluted Loss Per Common Share Basic loss per common share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per common share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per common share excludes all potential common shares if their effect is anti-dilutive. Since the Company is in a loss position, it has excluded stock options and warrants from its calculation of diluted net loss per common share. At September 30, 2015, the Company had 9,131,216 stock options, 12,576,452 warrants and 1,922,712,128 shares issuable upon the conversion of convertible debt that would have been included in its calculation of diluted net loss per common share if they were not anti-dilutive. |
Software Development Costs | Software Development Costs Costs incurred in the research and development of new software products are expensed as incurred until technological feasibility has been established. After technological feasibility is established, any additional costs are capitalized in accordance with authoritative guidance until the product is available for general release. |
Fixed Assets | Fixed Assets Fixed assets are stated at cost and depreciated using the straight-line method over the estimated useful life of the asset. The Companys fixed assets are comprised of computer equipment and the estimated life of computer equipment is three years. |
Derivative Liabilities | Derivative Liabilities The Company reviews the terms of the common stock, convertible debt and warrants it issues to determine whether there are embedded derivative instruments, including embedded conversion options, which are required to be bifurcated and accounted for separately as derivative financial instruments. Bifurcated embedded derivatives are initially recorded at fair value and are then revalued at each reporting date with changes in the fair value reported as non-operating income or expense. The Company uses a Black-Scholes model for valuation of the derivative instrument. |
Stock-Based Compensation | Stock-Based Compensation The Company measures stock-based compensation cost at the grant date based on the fair value of the award and recognize it as expense, over the vesting or service period, as applicable, of the stock award using the straight-line method. |
Fair Value Measurements | Fair Value Measurements As defined in FASB ASC Topic No. 820 10, fair value is the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC Topic No. 820 10 requires disclosure that establishes a framework for measuring fair value and expands disclosure about fair value measurements. The statement requires fair value measurements be classified and disclosed in one of the following categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that the Company values using observable market data. Substantially all of these inputs are observable in the marketplace throughout the term of the derivative instruments, can be derived from observable data, or supported by observable levels at which transactions are executed in the marketplace. Level 3: Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e. supported by little or no market activity). The Companys valuation models are primarily industry standard models. Level 3 instruments include derivative warrant instruments. The Company does not have sufficient corroborating evidence to support classifying these assets and liabilities as Level 1 or Level 2. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Companys assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The estimated fair value of the derivative liabilities were calculated using the Black Scholes model. |
New Accounting Pronouncements, Policy | New Accounting Pronouncements The Companys management does not believe that any other recently issued pronouncements will have a material effect on the Companys financial statements. |
CONVERTIBLE NOTES PAYABLE (TABL
CONVERTIBLE NOTES PAYABLE (TABLES) | 9 Months Ended |
Sep. 30, 2015 | |
CONVERTIBLE NOTES PAYABLE (TABLES): | |
Convertible debt with a variable conversion feature | Convertible debt with a variable conversion feature consists of the following as of September 30, 2015 and December 31, 2014: September 30, 2015 December 31, 2014 Bluestem Advisors (a) 48,048 - Carebourn Capital (b) 376,081 - GHS Investments (c) 43,253 - JMJ Financial (d) 48,870 55,556 JSJ Investments (e) 50,000 - KBM (f) - 64,000 LG (g) 283,275 110,000 RDW Capital (h) 100,000 - SBI Investments (i) 468,887 - VGI (j) 79,000 Total convertible notes payable $ 1,497,414 $ 229,556 Less: debt discount (1,237,764 ) (223,556 ) Convertible notes payable, net 259,650 6,000 |
Convertible debt fully converted or assigned to third parties, during the nine months ended September 30, 2015 | Convertible debt with a variable conversion feature, provided and fully converted or assigned to third parties, during the nine months ended September 30, 2015, consists of the following: Issued During the period Adar Bays (k) $ 44,00 Crown Bridge Partners (l) 158,500 EMA Financial (m) 71,500 FireRock (n) 137,500 Peak One (o) 50,500 Rider Capital (p) 70,000 River North (q) 52,500 Tangiers (r) 55,000 Union Capital (s) 44,00 |
Carebourn Capital | During the nine month period ended September 30, 2015 Carebourn, converted $152,760 of principal into an aggregate of 219,444,843 shares of common stock. Notes # of Shares issued Amount converted September 30, 2015 $45,760 -10% due on January 26, 2016 54,910,676 $ 45,760 $ - $101,800 -10% due on May 30, 2016 - - 101,800 $107,000 -10% due on August 6, 2016 164,534,167 107,000 - $82,000 - 10% due on August 14, 2016 - - 82,000 $132,281-10% convertible note due on June 18, 2016 - - 132,281 $60,000 -10% convertible note due on June 22, 2016 - - 60,000 219,444,843 152,760 376,081 |
SBI Investments | During the nine month period ended September 30, 2015 SBI converted $85,498 of principal into an aggregate of 50,066,552 shares of common stock. Notes # of Shares issued Amount converted September 30, 2015 $164,631 -8% due on June 25, 2015 50,066,552 $ 85,498 $ 79,133 $60,369 -8% due on June 25, 2016 - - 60,369 $125,000 -8% due on June 26, 2016 - - 125,000 $50,000 - 8% due on August 6, 2016 - - 50,000 $104,385-10% convertible note due on September 21, 2016 - - 104,385 $50,000 -10% convertible note due on September 20, 2016 - - 50,000 50,066,552 85,498 468,887 |
Debt discount | Following is a summary of the debt discount for each of the convertible notes: Noteholder December 31, 2014 Discount Debt Extinguishment Expense September 30, 2015 Bluestem Advisors $ - $ 80,278 $ $ (33,974 ) $ 46,304 Carebourn Capital - 528,841 (191,419 ) 337,422 GHS Investments - 63,412 (21,232 ) 42,180 JMJ Financial 55,556 27,778 (7,100 ) (41,563 ) 34,671 JSJ Investments - 50,000 (24,275 ) 25,725 KBM 62,800 48,000 (42,705 ) (68,095 ) - LG 105,200 283,275 (7,500 ) (129,285 ) 251,690 RDW Capital - 200,000 (144,565 ) 55,435 SBI Investments - 554,385 (166,517 ) 387,868 VGI - 127,000 (32,552 ) (37,979 ) 56,469 Adar Bays - 44,000 (22,060 ) (21,940 ) - Crown Bridge Partners - 158,500 (112,188 ) (46,312 ) - EMA Financial - 75,000 (52,664 ) (22,336 ) - FireRock - 301,385 - (301,385 ) - Peak One - 70,000 (62,719 ) (7,281 ) - Rider Capital - 50,000 (50,000 ) - - River North - 52,500 (26,680 ) (25,820 ) - Tangiers - 55,000 - (55,000 ) - Union Capital 44,000 (18,459 ) (25,541 ) - Total $ 223,556 $ 2,813,354 $ (502,127 ) $ (1,364,519 ) $ 1,237,764 |
DERIVATIVE LIABILITIES (TABLES)
DERIVATIVE LIABILITIES (TABLES) | 9 Months Ended |
Sep. 30, 2015 | |
DERIVATIVE LIABILITIES (TABLES): | |
Activity for derivative warrant liabilities | Activity for derivative warrant liabilities during the nine months ended September 30, 2015 was as follows: Balance at December 31, 2014 $ 269,929 Initial valuation of derivative liabilities upon issuance of new warrants (VC Advisors) 250,000 warrants 19,509 Decrease in fair value of derivative liability (39,864 ) Balance at September 30, 2015 $ 249,574 |
Derivative conversion feature on convertible debt | Activity for derivative liabilities related to the variable conversion features on convertible debt during the nine months ended September 30, 2015 was as follows: Lender Balance at December 31, 2014 Initial valuation of derivative liabilities upon issuance of variable feature convertible notes Debt extinguishment /conversions Change in fair value of derivative liability Balance at September 30, 2015 Bluestem Advisors $ - $ 229,228 $ (162,125 ) $ 23,712 $ 90,815 Carebourn Capital - 1,285,894 (203,269 ) (317,671 ) 764,954 GHS Investments - 295,488 (93,934 ) (115,550 ) 86,004 JMJ Financial 58,115 25,000 (55,478 ) 85,867 113,504 JSJ Investments - 44,000 - 62,799 106,799 KBM 66,282 45,000 (78,912 ) (32,370 ) - LG 110,867 406,707 (176,374 ) 347,805 689,005 RDW Capital - 224,594 (168,673 ) 114,801 170,722 SBI Investments - 758,819 (188,602 ) 567,442 1,137,659 VGI - 128,716 (49,533 ) 7,328 86,511 Adar Bays - 37,500 (59,520 ) 22,020 - Crown Bridge Partners - 140,000 (541,419 ) 401,419 - EMA Financial - 71,500 (327,585 ) 256,085 - FireRock - 275,271 (314,297 ) 39,026 - Peak One - 48,500 (161,984 ) 113,484 - Rider Capital - 50,000 (89,496 ) 39,496 - River North - 44,750 (182,283 ) 137,533 - Tangiers - 50,000 (123,455 ) 73,455 - Union Capital - 38,000 (198,032 ) 160,032 - Total $ 235,264 $ 4,198,967 $ (3,174,971 ) $ 1,986,713 $ 3,245,973 |
STOCKHOLDERS' EQUITY (TABLES)
STOCKHOLDERS' EQUITY (TABLES) | 9 Months Ended |
Sep. 30, 2015 | |
STOCKHOLDERS' EQUITY (TABLES): | |
Common Stock issued for debt conversion during the period ended September 30, 2015 | Common Stock issued for debt conversion during the period ended September 30, 2015 Note Holder Conversion Price ($) Number of shares issued Amount ($) Carebourn Capital #1 0.001615 7,250,725 11,710 Carebourn Capital #2 0.000950 12,686,153 12,052 Carebourn Capital #3 0.000630 16,947,062 10,677 Carebourn Capital #4 0.000630 15,677,468 9,877 Carebourn Capital #5 0.000615 2,349,268 1,445 Carebourn Partners #1 0.000760 14,441,883 10,976 Carebourn Partners #2 0.000715 15,330,835 10,962 Carebourn Partners #3 0.000715 4,283,398 3,063 Carebourn Partners #4* 0.000615 19,895,732 12,236 Carebourn Partners #5 0.000615 19,895,739 12,236 Carebourn Partners #6 0.000615 21,241,737 13,064 Carebourn Partners #7* 0.000615 24,172,277 14,838 Carebourn Partners #8* 0.000650 25,356,718 16,482 Carebourn Partners #9* 0.000660 19,915,848 13,144 Crown Bridge Partners #1 0.041600 240,384 10,000 Crown Bridge Partners #2 0.031200 400,641 12500 Crown Bridge Partners #3 0.026000 528,846 13750 Crown Bridge Partners #4 0.008800 795,454 7,000 Crown Bridge Partners #5 0.002200 3,068,181 6,750 FireRock Global #1 0.009417 3,185,897 30,000 FireRock Global #2 0.006933 3,605,786 25,000 FireRock Global #3 0.005217 3,833,914 20,000 FireRock Global #4 0.003685 4,070,556 15,000 FireRock Global #5 0.002850 4,561,403 13,000 FireRock Global #6 0.002550 4,430,196 11,297 FireRock Global #7 0.002583 5,032,322 13,000 FireRock Global #8 0.002300 7,173,913 16,500 FireRock Global #9 0.002000 7,500,000 15,000 FireRock Global #10 0.001883 9,292,199 17,500 FireRock Global #11 0.001600 10,000,000 16,000 FireRock Global #12 0.001400 10,357,142 14,500 JMJ Financial #1 0.036000 200,000 7,200 JMJ Financial #2 0.009630 1,000,000 9,630 JMJ Financial #3 0.002340 4,500,000 10,530 JMJ Financial #4 0.001920 3,700,000 7,104 LG Capital #1 0.037200 419,310 15,598 LG Capital #2 0.010540 1,486,470 15667.4 LG Capital #3 0.002852 5,510,767 15,717 LG Capital #4 0.001178 9,814,728 11,562 LG Capital #5 0.000868 13,369,988 11,605 LG Capital #6 0.000806 14,419,392 11,622 LG Capital #7 0.000806 13,133,014 10,585 LG Capital #8 0.000806 14,467,245 11,661 LG Capital #9 0.000806 14,494,168 11,682 RDW Capital (Redwood) #1 0.007500 3,545,000 26,588 RDW Capital (Redwood) #2 0.002520 4,000,000 10,080 RDW Capital (Redwood) #3 0.002280 5,300,000 12,084 RDW Capital (Redwood) #4 0.002280 5,600,000 12,768 RDW Capital (Redwood) #5 0.001980 5,960,000 11,801 RDW Capital (Redwood) #6 0.001380 9,500,000 13,110 RDW Capital (Redwood) #7 0.001200 10,000,000 12,000 RDW Capital (Redwood) #8 0.001100 1,427,000 1,570 Rider Capital #1 0.021001 1,111,111 23,334 Rider Capital #2 0.017500 1,523,771 26,666 SBI (Sea Otter) #1 0.009950 3,381,271 33,644 SBI (Sea Otter) #2 0.001700 7,383,902 12,553 SBI (Sea Otter) #3 0.001000 11,903,343 11,903 SBI (Sea Otter) #4 0.001000 6,294,583 6,295 SBI (Sea Otter) #5 0.001000 21,103,453 21,103 Tangiers Investment Group #1 0.001976 11,133,603 22,000 Tangiers Investment Group #2 0.001716 11,655,012 20,000 Tangiers Investment Group #3 0.001612 9,821,884 15,833 Union Capital #1 0.000806 3,132,122 2,524 Bluestem #1 0.000660 15,151,515 10,000 Bluestem #2 0.000660 33,681,818 22,230 GHS Investments #1 0.000780 25,844,000 20,158 |
Stock Option Awards | A summary of stock option activity is presented below: Number of Shares Weighted-average Exercise Price Weighted-average Remaining Contractual Term (years) Aggregate Intrinsic Value Outstanding at December 31, 2014 2,583,744 $ 0.81 $ - Granted 6,950,000 $ 0.10 Forfeited/Cancelled/Expired (551,947 ) $ 0.41 Outstanding at September 30, 2015 8,981,797 $ 0.28 8.98 $ - Exercisable at September 30, 2015 3,159,218 $ 0.44 8.55 $ - |
Warrant Awards | A summary of warrant activity is presented below: Number of Shares Weighted-average Exercise Price Remaining Contractual Term (years) Aggregate Intrinsic Value Outstanding at December 31, 2014 3,760,831 $ 0.75 - - Granted 4,050,000 $ 0.10 - - Warrants issued pursuant to anti-dilution adjustments 53,448,344 $ 0.48 - - Exercised - $ - - - Expired/Forfeited (250,000 ) $ 1.00 - - Outstanding and exercisable at September 30, 2015 61,009,175 $ 0.45 7.30 $ 26,500 |
FAIR VALUE MEASUREMENTS (TABLES
FAIR VALUE MEASUREMENTS (TABLES) | 9 Months Ended |
Sep. 30, 2015 | |
FAIR VALUE MEASUREMENTS (TABLES): | |
Financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2015: | The following table sets forth, by level within the fair value hierarchy, the Companys financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2015: Quoted Prices In Active Significant Total Markets for Other Significant Carrying Identical Observable Unobservable Value as of Assets Inputs Inputs September 30, Description (Level 1) (Level 2) (Level 3) 2015 Warrant derivatives $ - $ - $ 249,574 $ 249,574 Variable conversion features convertible debt derivatives $ - $ - $ 3,245,974 $ 3,245,974 $ - $ - $ 3,495,548 $ 3,495,548 |
Financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2014: | The following table sets forth, by level within the fair value hierarchy, the Companys financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2014: Quoted Prices In Active Significant Total Markets for Other Significant Carrying Identical Observable Unobservable Value as of Assets Inputs Inputs September 30, Description (Level 1) (Level 2) (Level 3) 2014 Derivative liabilities - warrant instruments $ - $ - $ 2,651,155 $ 2,651,155 |
Reconciliation of changes in the fair value of financial liabilities | The following table sets forth a reconciliation of changes in the fair value of financial liabilities classified as level 3 in the fair value hierarchy: Significant Unobservable Inputs (Level 3) Nine Months Ended September 30, 2015 2014 Beginning balance $ 505,193 $ - Additions 4,198,967 449,624 Debt conversion/extinguishment (3,174,971 ) - Change in fair value 1,966,358 2,201,531 Ending balance $ 3,495,547 $ 2,651,155 Change in unrealized gain included in earnings $ 1,966,358 $ 2,201,531 |
ORGANIZATION AND BUSINESS OPE21
ORGANIZATION AND BUSINESS OPERATIONS (Details Narrative) | Sep. 30, 2015USD ($) |
Organization And Business Operations Details Narrative | |
Accumulated deficit | $ 40,801,476 |
SUMMARY OF SIGNIFICANT ACCOUN22
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | Sep. 30, 2015shares |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES {2} | |
Company had stock options | 9,131,216 |
Company had warrants | 12,576,452 |
Shares issuable upon conversion of convertible debt | 1,922,712,128 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
RELATED PARTY TRANSACTIONS DETAILS | ||
Service fee | $ 188,147 | |
Company paid in cash | $ 148,962 | |
Owned by a director of the company | 71.00% | |
Owned by the CFO of the company | 8.00% | |
Loans provided to the Company by the Chairman | $ 6,300 | $ 190,250 |
Loans bear interest at per annum | 1.00% | |
Loans provided to the Company by the CFO | $ 2,000 | 40,000 |
Loans provided to the company by the director | 115,158 | 275,000 |
Company owed to a relative of an executive of the Company | $ 0 | $ 50,000 |
RELATED PARTY PAYABLES (Details
RELATED PARTY PAYABLES (Details) | 9 Months Ended |
Sep. 30, 2015USD ($) | |
RELATED PARTY PAYABLES | |
CFO advanced the company to fund the operations | $ 156,695 |
Company paid in cash | 148,962 |
Leaving payable | 122,195 |
Chairman advanced the Company to fund the operations | 47,829 |
Company owes a related party for marketing services | 39,185 |
Company received from its Chairman | 85,300 |
Company repaid a total outstanding loans | 269,250 |
Company received a further in loans from its CFO | 12,000 |
Repaid | $ 10,000 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | 6 Months Ended | 9 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | |
NOTES PAYABLE DETAILS | |||
Promissory note in amount | $ 50,000 | ||
Company received in cash for promissory note | 45,000 | ||
Interest Expense, Debt | $ 5,000 | ||
Company received in cash from third parties in exchange for notes payable | $ 100,000 | ||
Third parties in exchange for notes payable | $ 100,000 | ||
Notes bearing interest rate per annum | 1.00% | ||
Notes payable was assigned to a third party and exchanged for convertible notes | $ 100,000 |
Convertible debt with a variabl
Convertible debt with a variable conversion feature (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Convertible debt with a variable conversion feature {1} | ||
Bluestem Advisors | $ 48,048 | |
Carebourn Capital | 376,081 | |
GHS Investments | 43,253 | |
JMJ Financial | 48,870 | $ 55,556 |
JSJ Investments | 50,000 | |
KBM | 64,000 | |
LG | 283,275 | 110,000 |
RDW Capital | 100,000 | |
SBI Investments | 468,887 | |
VGI | 79,000 | |
Total convertible notes payable | 1,497,414 | 229,556 |
Less: debt discount | (1,237,764) | (223,556) |
Convertible notes payable, net | $ 259,650 | $ 6,000 |
Convertible debt with a varia27
Convertible debt with a variable conversion feature Issued During the period (Details) | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Convertible debt with a variable conversion feature Issued During the period | |
Adar Bays | $ 4,400 |
Crown Bridge Partners | 158,500 |
EMA Financial | 71,500 |
FireRock | 137,500 |
Peak One | 50,500 |
Rider Capital | 70,000 |
River North | 52,500 |
Tangiers | 55,000 |
Union Capital | $ 4,400 |
CONVERTIBLE NOTES PAYABLE - Blu
CONVERTIBLE NOTES PAYABLE - Bluestem Advisors (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
CONVERTIBLE NOTES PAYABLE - Bluestem Advisors | ||
Company issued Bluestem a convertible promissory note in the principal amount | $ 52,500 | $ 27,778 |
Bluestem Advisors note bears interest at a rate per annum | 9.00% | 10.00% |
Convertible after 180 days at a conversion price equal to a percentage of the lowest trading price during the twenty trading days prior to the date | 60.00% | 45.00% |
Bluestem converted principal from the aforementioned note | $ 32,230 | |
Bluestem converted principal from the aforementioned note into an aggregate ofshares of common stock. | 48,833,333 |
CONVERTIBLE NOTES PAYABLE - Car
CONVERTIBLE NOTES PAYABLE - Carebourn Capital (Details) | 9 Months Ended |
Sep. 30, 2015USD ($)shares | |
Company issued several convertible promissory notes to Carebourn Capital LLC | |
Note due on January 26, 2016 | $ 45,760 |
Note due on May 30, 2016 | 101,800 |
Note due on August 6, 2016 | 107,000 |
Note due on August 14, 2016 | 82,000 |
Convertible note due on June 18, 2016 | 132,281 |
Convertible note due on June 22, 2016 | $ 60,000 |
Carebourn Capital note bears interest at a rate per annum | 10.00% |
Total principal amount of Carebourn notes converted | $ 152,760 |
Total shares of common stock issued on Carebourn notes conversion | shares | 219,444,843 |
Carebourn Capital note convertible at a conversion price equal to a percentage of the average of the lowest three trading prices during the twenty trading days prior to the date | 50.00% |
Principal amount outstanding after conversion of Carebourn Capital note | $ 376,081 |
CONVERTIBLE NOTES PAYABLE - GHS
CONVERTIBLE NOTES PAYABLE - GHS Investments (Details) - USD ($) | Sep. 23, 2015 | Sep. 22, 2015 |
CONVERTIBLE NOTES PAYABLE - GHS Investments | ||
Company issued GHS Investments, LLC a convertible promissory note in the principal amount | $ 63,412 | |
GHS Investments note bears interest at a rate per annum | 8.00% | |
The note is convertible at GHS's option at a conversion price equal to the lowest closing price during the 20 trading days prior to the date | 60.00% | |
The conversion price has a floor price | $ 0.0005 | |
Company entered in to an agreement with GHS to provide an equity line of financing | $ 7,750,000 | |
The minimum amount that company must request from GHS at any one time | $ 5,000 |
CONVERTIBLE NOTES PAYABLE - JMJ
CONVERTIBLE NOTES PAYABLE - JMJ (Details) - USD ($) | Sep. 30, 2015 | Apr. 28, 2015 | Jan. 16, 2015 | Dec. 15, 2014 |
CONVERTIBLE NOTES PAYABLE - JMJ | ||||
Company issued a convertible promissory note in the principal amount to JMJ Financial | $ 27,778 | $ 55,556 | ||
Net proceeds of the JMJ Note after original issue discount | $ 50,000 | |||
JMJ note bears interest at a rate per annum | 12.00% | |||
Original issue discount on JMJ note | $ 2,778 | |||
JMJ note is convertible after 180 days at a conversion price equal to a percentage of the lowest trading price during the twenty trading days prior to the date | 60.00% | 60.00% | ||
JMJ may provide company with additional loans on the same terms pursuant to which JMJ would receive notes | $ 250,000 | |||
JMJ converted an amount of principal into shares of common stock. | $ 34,464 | |||
JMJ converted note into an aggregate number of shares of common stock. | 9,400,000 |
CONVERTIBLE NOTES PAYABLE - JSJ
CONVERTIBLE NOTES PAYABLE - JSJ Investments (Details) | May. 19, 2015USD ($) |
CONVERTIBLE NOTES PAYABLE - JSJ Investments | |
Company issued JSJ Investments convertible promissory note in the principal amount | $ 50,000 |
JSJ note is convertible after 180 days at a conversion price equal to a percentage of the lowest trading price during the twenty trading days prior to the date | 45.00% |
CONVERTIBLE NOTES PAYABLE - KBM
CONVERTIBLE NOTES PAYABLE - KBM (Details) - USD ($) | Jan. 29, 2015 | Dec. 19, 2014 |
CONVERTIBLE NOTES PAYABLE - KBM | ||
Company issued convertible promissory notes to KBM Worldwide, Inc.in the principal amounts | $ 48,000 | $ 64,000 |
KBM note bears interest at a rate per annum | 8.00% | 8.00% |
The Company received cash proceeds for KBM notes | $ 44,100 | $ 60,000 |
KBM note is convertible after 180 days at a conversion price equal to a percentage of the lowest trading price during the twenty trading days prior to the date | 58.00% | 58.00% |
The KBM Notes may be prepaid by us any time within 180 days at a premium for a prepayment within the initial 30 days | 115.00% | 115.00% |
The KBM Notes may be prepaid by us any time within 180 days at a premium for a prepayment after 150 days and before 180 days | 140.00% | 140.00% |
The prepayment premium for the 31-60 day period | 120.00% | 120.00% |
The prepayment premium for the 61-90 day period | 125.00% | 125.00% |
The prepayment premium for the 91-120 day period | 130.00% | 130.00% |
The prepayment premium for the 121-150 day period | 135.00% | 135.00% |
CONVERTIBLE NOTES PAYABLE - LG
CONVERTIBLE NOTES PAYABLE - LG (Details) - USD ($) | Sep. 30, 2015 | Sep. 03, 2015 | Jul. 20, 2015 | Dec. 15, 2014 |
CONVERTIBLE NOTES PAYABLE - LG | ||||
Company issued convertible promissory notes to LG in the principal amounts | $ 127,050 | $ 86,225 | $ 110,000 | |
LG note bears interest at a rate per annum | 8.00% | |||
The Company received net proceeds for LG notes | $ 95,000 | |||
The LG Note was subject to an original issue discount | $ 15,000 | |||
LG note is convertible after 180 days at a conversion price equal to a percentage of the lowest trading price during the twenty trading days prior to the date | 62.00% | 62.00% | 62.00% | |
The LG Notes may be prepaid by us any time within 180 days at a premium for a prepayment within the initial 30 days | 115.00% | 115.00% | 115.00% | |
The LG Notes may be prepaid by us any time within 180 days at a premium for a prepayment after 150 days and before 180 days | 145.00% | 145.00% | 145.00% | |
The LG Notes prepayment premium for the 31-60 day period | 121.00% | 121.00% | 121.00% | |
The LG Notes prepayment premium for the 61-90 day period | 127.00% | 127.00% | 127.00% | |
The LG Notes prepayment premium for the 91-120 day period | 133.00% | 133.00% | 133.00% | |
The LG Notes prepayment premium for the 121-150 day period | 139.00% | 139.00% | 139.00% | |
LG converted principal amount of note in to shares of common stock. | $ 110,000 | |||
LG converted interest amount into shares of common stock. | $ 5,670 | |||
LG converted principal and interest into an aggregate of shares of common stock. | 87,115,082 |
CONVERTIBLE NOTES PAYABLE - RDW
CONVERTIBLE NOTES PAYABLE - RDW Capital (Details) - USD ($) | Sep. 30, 2015 | Jul. 10, 2015 |
CONVERTIBLE NOTES PAYABLE - RDW Capital | ||
Company issued RDW Capital LLC two convertible promissory notes in the principal amount | $ 100,000 | |
RDW Capital note bears interest at a rate per annum | 10.00% | |
The note is convertible at RDW's option at a conversion price equal to the lowest closing price during the 20 trading days prior to the date | 50.00% | |
RDW converted principal amount into shares of common stock. | $ 100,000 | |
RDW converted note into an aggregate of shares of common stock. | 45,332,000 |
CONVERTIBLE NOTES PAYABLE - SBI
CONVERTIBLE NOTES PAYABLE - SBI Investments (Details) | 9 Months Ended |
Sep. 30, 2015USD ($)shares | |
Company issued several convertible promissory notes to SBI Investments LLC | |
Note due on June 25, 2015 | $ 164,631 |
Note due on June 25, 2016 | 60,369 |
Note due on June 26, 2016 | 125,000 |
Note due on August 6, 2016 | 107,000 |
Convertible note due on September 21, 2016 | 104,385 |
Convertible note due on September 20, 2016 | $ 50,000 |
SBI Investments note bears interest at a rate per annum | 8.00% |
Total principal amount of SBI Investments note converted | $ 85,498 |
Total shares of common stock issued on SBI Investments note conversion | shares | 50,066,552 |
SBI Investments note convertible at a conversion price equal to a percentage of the average of the lowest three trading prices during the twenty trading days prior to the date | 50.00% |
Principal amount outstanding after conversion of SBI Investments note | $ 468,887 |
CONVERTIBLE NOTES PAYABLE - VGI
CONVERTIBLE NOTES PAYABLE - VGI (Details) - USD ($) | Jul. 13, 2015 | May. 11, 2015 | Apr. 08, 2015 |
CONVERTIBLE NOTES PAYABLE - VGI | |||
Company issued VGI convertible promissory notes in the principal amount | $ 79,000 | $ 10,000 | $ 38,000 |
VGI note bears interest at a rate per annum | 8.00% | 12.00% | 12.00% |
VGI note is convertible after 180 days at a conversion price equal to a percentage of the lowest trading price during the twenty trading days prior to the date | 50.00% | 50.00% | 50.00% |
CONVERTIBLE NOTES PAYABLE - Ada
CONVERTIBLE NOTES PAYABLE - Adar Bays (Details) | Jan. 23, 2015USD ($) |
CONVERTIBLE NOTES PAYABLE - Adar Bays | |
Company issued Adar Bays convertible promissory notes in the principal amount | $ 44,000 |
Adar Bays note bears interest at a rate per annum | 8.00% |
The Company received net proceeds for Adar Bays notes | $ 37,500 |
The Adar Bays Note was subject to an original issue discount | $ 6,500 |
Adar Bays note is convertible after 180 days at a conversion price equal to a percentage of the lowest trading price during the twenty trading days prior to the date | 62.00% |
Adar Bays Notes may be prepaid by us any time within 180 days at a premium for a prepayment within the initial 30 days | 115.00% |
Adar Bays Notes may be prepaid by us any time within 180 days at a premium for a prepayment after 150 days and before 180 days | 145.00% |
Adar Bays Notes prepayment premium for the 31-60 day period | 121.00% |
Adar Bays Notes prepayment premium for the 61-90 day period | 127.00% |
Adar Bays Notes prepayment premium for the 91-120 day period | 133.00% |
Adar Bays Notes prepayment premium for the 121-150 day period | 139.00% |
CONVERTIBLE NOTES PAYABLE - Cro
CONVERTIBLE NOTES PAYABLE - Crown Bridge Partners (Details) - USD ($) | Sep. 30, 2015 | Jun. 04, 2015 | May. 26, 2015 | May. 22, 2015 | Apr. 14, 2015 |
CONVERTIBLE NOTES PAYABLE - Crown Bridge Partners | |||||
Company issued Crown Bridge Partners convertible promissory notes in the principal amount | $ 10,000 | $ 10,000 | $ 48,500 | $ 60,000 | |
Crown Bridge Partners note bears interest at a rate per annum | 5.00% | 5.00% | |||
Crown Bridge Partners note is convertible after 180 days at a conversion price equal to a percentage of the lowest trading price during the twenty trading days prior to the date | 52.00% | 52.00% | 52.00% | 52.00% | |
CBP converted principal into shares of common stock. | $ 50,000 | ||||
CBP converted principal of note into an aggregate of shares of common stock. | 5,033,506 |
CONVERTIBLE NOTES PAYABLE - EMA
CONVERTIBLE NOTES PAYABLE - EMA Financial (Details) | Jun. 01, 2015USD ($) |
CONVERTIBLE NOTES PAYABLE - EMA Financial | |
Company issued EMA Financial convertible promissory notes in the principal amount | $ 75,000 |
EMA Financial note bears interest at a rate per annum | 10.00% |
EMA Financial note is convertible after 180 days at a conversion price equal to a percentage of the lowest trading price during the twenty trading days prior to the date | 50.00% |
CONVERTIBLE NOTES PAYABLE - Fir
CONVERTIBLE NOTES PAYABLE - FireRock (Details) - USD ($) | Sep. 30, 2015 | Aug. 06, 2015 | Jul. 07, 2015 | Jan. 06, 2015 |
CONVERTIBLE NOTES PAYABLE - FireRock | ||||
Company issued FireRock Financial convertible promissory notes in the principal amount | $ 137,500 | |||
The Company received net proceeds for FireRock notes | 122,500 | |||
The FireRock Note was subject to an original issue discount | $ 15,000 | |||
FireRock note is convertible at a conversion price equal to a percentage of the lowest trading price during the twenty trading days prior to the date | 60.00% | |||
The LG Notes may be prepaid by us any time at any time prior to maturity at a premium for a prepayment | 135.00% | |||
Company issued shares of restricted common stock to FireRock | 250,000 | |||
Company issued five-year warrant to purchase shares of our common stock to FireRock | 500,000 | |||
Company issued five-year warrant to purchase shares of our common stock at an exercise price per share to FireRock | $ 0.50 | |||
Company is required to reserve shares of our common stock to cover note conversions | 20,000,000 | |||
Amount payable due to failure to pay the principal amount and interest on the maturity date to FireRock | $ 312,500 | |||
Balance of principal in the amount of the FireRock Note was assigned by the Company to Carebourn Capital LLC | $ 107,000 | |||
FireRock converted an amount of principal into shares of common stock. | $ 205,500 | |||
FireRock converted an amount of accrued interest into shares of common stock. | $ 1,297 | |||
FireRock converted principal plus accrued interest into an aggregate of shares of common stock. | 73,043,328 |
CONVERTIBLE NOTES PAYABLE - Pea
CONVERTIBLE NOTES PAYABLE - Peak One (Details) | May. 12, 2015USD ($)shares |
CONVERTIBLE NOTES PAYABLE - Peak One | |
Company issued Peak One convertible promissory notes in the principal amount | $ 70,000 |
The note is convertible at Peak One's option at a conversion price equal to the lowest closing price during the 20 trading days prior to the date | 60.00% |
Company issued shares of common stock to Peak One | shares | 75,000 |
Company issued shares of common stock to Peak One with a fair value The relative fair value of the shares issued was recorded as debt discount | $ 8,625 |
The relative fair value of the shares issued to Peak One was recorded as debt discount | $ 7,000 |
CONVERTIBLE NOTES PAYABLE - Rid
CONVERTIBLE NOTES PAYABLE - Rider Capital (Details) - USD ($) | Jun. 30, 2015 | Jun. 15, 2015 |
CONVERTIBLE NOTES PAYABLE - Rider Capital | ||
Company issued Rider Capital convertible promissory notes in the principal amount | $ 50,000 | |
Rider Capital note is convertible after 180 days at a conversion price equal to a percentage of the lowest trading price during the twenty trading days prior to the date | 30.00% | |
Rider converted amount of principal into shares of common stock | $ 50,000 | |
Rider converted principal into an aggregate of shares of common stock | 2,634,882 |
CONVERTIBLE NOTES PAYABLE - Riv
CONVERTIBLE NOTES PAYABLE - River North Equity (Details) - USD ($) | Sep. 14, 2015 | Mar. 18, 2015 |
CONVERTIBLE NOTES PAYABLE - River North Equity | ||
Company issued River North Equity two convertible promissory notes in the principal amount | $ 52,500 | |
River North Equity note bears interest at a rate per annum | 9.00% | |
The Company received net proceeds for River North Equity notes | $ 47,250 | |
The River North Equity Note was subject to an original issue discount in percentage | 10.00% | |
River North Equity note is convertible after 180 days at a conversion price equal to a percentage of the lowest trading price during the twenty trading days prior to the date | 60.00% | |
River North Note was assigned to Bluestem Advisors LLC | $ 52,500 |
CONVERTIBLE NOTES PAYABLE - Tan
CONVERTIBLE NOTES PAYABLE - Tangiers (Details) - USD ($) | Jul. 31, 2015 | Jan. 23, 2015 |
CONVERTIBLE NOTES PAYABLE - Tangiers | ||
Company issued convertible promissory notes to Tangiers in the principal amounts | $ 55,000 | |
Tangiers note bears interest at a rate per annum | 10.00% | |
The Company received net proceeds for Tangiers notes | $ 50,000 | |
The Tangiers Note was subject to an original issue discount | $ 5,000 | |
Tangiers note is convertible after 180 days at a conversion price equal to a percentage of the lowest trading price during the twenty trading days prior to the date | 52.00% | |
Tangiers Notes may be prepaid by us any time within 180 days at a premium for a prepayment within the initial 30 days | 115.00% | |
Tangiers Notes may be prepaid by us any time within 180 days at a premium for a prepayment after 150 days and before 180 days | 145.00% | |
Tangiers Notes prepayment premium for the 31-60 day period | 121.00% | |
Tangiers Notes prepayment premium for the 61-90 day period | 127.00% | |
Tangiers Notes prepayment premium for the 91-120 day period | 133.00% | |
Tangiers Notes prepayment premium for the 121-150 day period | 139.00% | |
Tangiers converted principal amount of note in to shares of common stock. | $ 55,000 | |
Tangiers converted principal and interest into an aggregate of shares of common stock. | 32,610,499 | |
By mutual agreement, Tangiers may provide us with additional funding on the same terms up to an aggregate principal amount | $ 330,000 |
CONVERTIBLE NOTES PAYABLE - Uni
CONVERTIBLE NOTES PAYABLE - Union Capital (Details) - USD ($) | Sep. 22, 2015 | Mar. 03, 2015 |
CONVERTIBLE NOTES PAYABLE - Union Capital | ||
Company issued convertible promissory notes to Union Capital in the principal amounts | $ 44,000 | |
Union Capital note bears interest at a rate per annum | 8.00% | |
The Company received net proceeds for Union Capital notes | $ 38,000 | |
Union Capital note is convertible after 180 days at a conversion price equal to a percentage of the lowest trading price during the twenty trading days prior to the date | 62.00% | |
Union Capital Notes may be prepaid by us any time within 180 days at a premium for a prepayment within the initial 30 days | 115.00% | |
Union Capital Notes may be prepaid by us any time within 180 days at a premium for a prepayment after 150 days and before 180 days | 145.00% | |
Union Capital Notes prepayment premium for the 31-60 day period | 121.00% | |
Union Capital Notes prepayment premium for the 61-90 day period | 127.00% | |
Union Capital Notes prepayment premium for the 91-120 day period | 133.00% | |
Union Capital Notes prepayment premium for the 121-150 day period | 139.00% | |
Union Capital converted principal amount of note in to shares of common stock. | $ 2,420 | |
Union Capital converted principal and interest into an aggregate of shares of common stock. | 3,132,122 | |
Amount of principal plus accrued interest in the Union Note was assigned to GHS Investments, LLC | $ 41,580 |
BOECKMANN WARRANTS (Details)
BOECKMANN WARRANTS (Details) | 6 Months Ended |
Jun. 30, 2014shares | |
BOECKMANN WARRANTS | |
Company issued warrants | 1,800,000 |
Company issued warrants in connection with issuance of shares of common stock sold for cash | 600,000 |
VC ADVISORS (Details)
VC ADVISORS (Details) | May. 19, 2015shares |
VC ADVISORS | |
Issue 3-year warrants to VC | 250,000 |
Each exercisable for purchase of one share of common stock at an exercise price equal to average 10 trading day | 102.00% |
Issue additional warrants to VC | 1,500,000 |
Financing not less than during the term or within twelve months thereafter | 5,000,000 |
DERIVATIVE WARRANT LIABILITIES
DERIVATIVE WARRANT LIABILITIES (Details) | 9 Months Ended |
Sep. 30, 2015USD ($)shares | |
DERIVATIVE WARRANT LIABILITIES | |
Balance at December 31, 2014 | $ | $ 269,929 |
Initial valuation of derivative liabilities upon issuance of new warrants (VC Advisors) - 250,000 warrants | shares | 19,509 |
Decrease in fair value of derivative liability | shares | (39,864) |
Balance at September 30, 2015 | $ | $ 249,574 |
FAIR VALUE OF WARRANTS USING MU
FAIR VALUE OF WARRANTS USING MULTI-NATIONAL LATTICE MODEL WITH WEIGHTED AVERAGE ASSUMPTIONS (Details) | Sep. 30, 2015$ / shares |
FAIR VALUE OF WARRANTS USING MULTI-NATIONAL LATTICE MODEL WITH WEIGHTED AVERAGE ASSUMPTIONS | |
Risk free interest rate | 1.37% |
Term in years | 6.71 |
Expected stock volatility | 180.00% |
Expected dividend rate | 0.00% |
Common stock price | $ 0.002 |
FAIR VALUE OF VC WARRANTS USING
FAIR VALUE OF VC WARRANTS USING BLACK SCHOLES MODEL WITH WEIGHTED AVERAGE ASSUMPTIONS (Details) | Sep. 30, 2015$ / shares |
FAIR VALUE OF VC WARRANTS USING BLACK SCHOLES MODEL WITH WEIGHTED AVERAGE ASSUMPTIONS | |
Risk free interest rate | 1.01% |
Term in years | 3 |
Expected stock volatility | 118.04% |
Expected dividend rate | 0.00% |
Common stock price | $ 0.11 |
FAIR VALUE OF DERIVATIVES OF 20
FAIR VALUE OF DERIVATIVES OF 2015 CONVERTIBLE NOTE USING BLACK SCHOLES OPTION PRICING MODEL (Details) | Sep. 30, 2015$ / shares |
FAIR VALUE OF DERIVATIVES OF 2015 CONVERTIBLE NOTE USING BLACK SCHOLES OPTION PRICING MODEL | |
Minimum Risk free interest rate | 0.09% |
Maximum Risk free interest rate | 0.36% |
Minimum Term in years | 0.50 |
Maximum Term in years | 3 |
Minimum Expected stock volatility | 120.00% |
Maximum Expected stock volatility | 269.00% |
Expected dividend rate | 0.00% |
Minimum Common stock price | $ 0.002 |
Maximum Common stock price | $ 0.11 |
FAIR VALUE OF DERIVATIVES USING
FAIR VALUE OF DERIVATIVES USING BLACK SCHOLES OPTION PRICING MODEL (Details) | Sep. 30, 2015$ / shares |
FAIR VALUE OF DERIVATIVES USING BLACK SCHOLES OPTION PRICING MODEL | |
Risk free interest rate | 0.31% |
Minimum Term in years | 0.28 |
Maximum Term in years | 1.58 |
Minimum Expected stock volatility | 240.00% |
Maximum Expected stock volatility | 287.00% |
Expected dividend rate | 0.00% |
Common stock price | $ 0.002 |
AUTHORIZED SHARES (Details)
AUTHORIZED SHARES (Details) | Sep. 25, 2015shares |
AUTHORIZED SHARES | |
Authorized shares of common stock before increase | 1,000,000,000 |
Authorized shares of common stock after increase | 5,000,000,000 |
SALES OF COMMON STOCK FOR CASH
SALES OF COMMON STOCK FOR CASH (Details) - USD ($) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2015 | Sep. 30, 2015 | |
SALES OF COMMON STOCK FOR CASH | ||
Company issued shares of common stock to individuals | 1,000,000 | |
Company issued shares of common stock to individuals at a price | $ 0.05 | |
Company issued shares of common stock to individuals for total cash proceeds | $ 50,000 | |
Company received from Aladdin for the issuance of common stock | $ 258,000 |
SALES OF COMMON STOCK FOR CASH-
SALES OF COMMON STOCK FOR CASH- ALADDIN (Details) - USD ($) | May. 31, 2015 | Mar. 31, 2015 | Mar. 10, 2015 | Feb. 20, 2015 | Feb. 02, 2015 | Nov. 25, 2014 |
SALES OF COMMON STOCK FOR CASH- ALADDIN | ||||||
Aladdin agreed to provide funding | $ 5,000,000 | |||||
Market Price for common stock | 50.00% | |||||
Aladdin's beneficial ownership equaling more than of outstanding common stock | 9.99% | |||||
Shares to be registered for sale to Aladdin pursuant to Equity Purchase Agreement | 20,000,000 | |||||
Delivered put notice to Aladdin for | $ 75,000 | |||||
Issuance of shares to Aladdin | 2,352,942 | 1,538,462 | 1,153,847 | |||
Delivered second put notice to Aladdin for | $ 100,000 | |||||
Shares were required to returned for cancellation | 198,877 | |||||
Net issuance of shares to Aladdin | 1,339,585 | |||||
Share issuance represented an estimate number of shares covered by the put | 1,538,462 | |||||
Aladdin owed from the second put | $ 25,000 | |||||
Received | $ 20,000 | |||||
Delivered third put notice to Aladdin for | $ 100,000 | |||||
Additional shares to Aladdin | 58,322 | |||||
Total issuance shares pursuant to the third put | 2,411,265 | |||||
Deducted shares from the share amount required to be returned to us from the second put | 58,322 | |||||
Return shares from the second put share issuance | 140,554 | |||||
Aladdin owes from third put | $ 100,000 |
SALES OF COMMON STOCK FOR CAS57
SALES OF COMMON STOCK FOR CASH- GANNON GIGUIERE (Details) | Feb. 02, 2015USD ($)$ / sharesshares |
SALES OF COMMON STOCK FOR CASH- GANNON GIGUIERE | |
Reduced CEO's base annual salary from $180,000 to | $ 1 |
Issuance of shares of common stock | shares | 5,000,000 |
Stock options which have a ten-year term | shares | 2,000,000 |
Stock options exercisable for purchase shares of common stock | shares | 2,000,000 |
Stock options exercisable for purchase shares of common stock at a price | $ / shares | $ 0.10 |
Stock options vest over the month period | 36 |
Fair value of 5,000,000 shares of common stock issued | $ 599,500 |
Per share value of 5,000,000 shares of common stock issued | $ / shares | $ 0.12 |
Stock-based compensation in connection with issuance of shares | $ 599,500 |
Accrued salary due to Gannon Giguiere | $ 351,000 |
Accrued salary due to Gannon Giguiere, was converted into shares of restricted common stock par value | $ / shares | $ 0.07 |
Issuance of shares of common stock granted piggyback registration | shares | 5,014,286 |
Issuance of shares of common stock granted piggyback registration fair value | $ 601,213 |
Issuance of shares of common stock granted piggyback registration par value | $ / shares | $ 0.12 |
Stock-based compensation difference between accrued salary and fair value of shares issued | $ 250,213 |
Related party notes payable | 160,550 |
Related party notes payable interest | $ 431 |
Related party notes payable interest was converted into shares of restricted common stock at a conversion price | $ / shares | $ 0.07 |
Issuance of shares of common stock to Mr. Giguiere | shares | 2,299,729 |
Fair value of issuance of shares of common stock to Mr. Giguiere | $ 275,738 |
Par value of issuance of shares of common stock to Mr. Giguiere | $ / shares | $ 0.12 |
Stock-based compensation between related notes payable and accrued interest and fair value of shares issued | $ 114,757 |
SALES OF COMMON STOCK FOR CAS58
SALES OF COMMON STOCK FOR CASH- ALAN JOHNSON (Details) | Feb. 02, 2015USD ($)$ / sharesshares |
SALES OF COMMON STOCK FOR CASH- ALAN JOHNSON | |
Reduced Mr. Johnson's base annual salary from $180,000 to | $ 1 |
Issuance of shares of common stock | shares | 2,000,000 |
Stock options to Mr. Johnson | shares | 1,000,000 |
Stock options term in years | 10 |
Stock options exercisable for purchase shares of common stock | shares | 1,000,000 |
Stock options exercisable for purchase shares of common stock at a price | $ / shares | $ 0.10 |
Stock options vest over the month period | 36 |
Fair value of 2,000,000 shares of common stock issued | $ 239,800 |
Per share value of 2,000,000 shares of common stock issued | $ / shares | $ 0.12 |
Stock-based compensation in connection with issuance of shares | $ 239,800 |
Accrued salary due to Alan Johnson | $ 339,750 |
Accrued salary due to Alan Johnson , was converted into shares of restricted common stock par value | $ / shares | $ 0.07 |
Issuance of shares of common stock to Mr. Johnson | shares | 4,853,571 |
Issuance of shares of common stock to Mr. Johnson fair value | $ 581,943 |
Issuance of shares of common stock to Mr. Johnson par value | shares | 0.12 |
Stock-based compensation difference between accrued salary and fair value of shares issued | $ 242,193 |
Related party notes payable | 159,842 |
Related party notes payable interest | $ 1,139 |
Related party notes payable interest was converted into shares of restricted common stock at a conversion price | $ / shares | $ 0.07 |
Issuance of shares of common stock to Mr. Johnson | shares | 2,299,729 |
Fair value of issuance of shares of common stock to Mr. Johnson | $ 275,738 |
Par value of issuance of shares of common stock to Mr. Johnson | $ / shares | $ 0.12 |
Stock-based compensation between related notes payable and accrued interest and fair value of shares issued | $ 114,757 |
SALES OF COMMON STOCK FOR CAS59
SALES OF COMMON STOCK FOR CASH- MIKE ROUNTREE (Details) | Feb. 02, 2015USD ($)$ / sharesshares |
SALES OF COMMON STOCK FOR CASH- MIKE ROUNTREE | |
Reduced Mr. Rountree's base annual salary from $180,000 to | $ 1 |
Issuance of shares of common stock | shares | 2,000,000 |
Stock options to Mr. Rountree | shares | 1,000,000 |
Stock options term in years | 10 |
Stock options exercisable for purchase shares of common stock | shares | 1,000,000 |
Stock options exercisable for purchase shares of common stock at a price | $ / shares | $ 0.10 |
Stock options vest over the month period | 36 |
Fair value of 2,000,000 shares of common stock issued | $ 239,800 |
Per share value of 2,000,000 shares of common stock issued | $ / shares | $ 0.12 |
Stock-based compensation in connection with issuance of shares | $ 239,800 |
Accrued salary due to to Michael Rountree | $ 227,435 |
Accrued salary due to to Michael Rountree , was converted into shares of restricted common stock par value | $ / shares | $ 0.07 |
Issuance of shares of common stock to to Michael Rountree | shares | 3,249,071 |
Issuance of shares of common stock to to Michael Rountree fair value | $ 389,564 |
Issuance of shares of common stock to to Michael Rountree par value | shares | 0.12 |
Stock-based compensation difference between accrued salary and fair value of shares issued | $ 162,129 |
Related party notes payable | 40,000 |
Related party notes payable interest | $ 143 |
Related party notes payable interest was converted into shares of restricted common stock at a conversion price | $ / shares | $ 0.07 |
Issuance of shares of common stock to Mr. Rountree | shares | 573,471 |
Fair value of issuance of shares of common stock to Mr. Rountree | $ 68,759 |
Par value of issuance of shares of common stock to Mr. Rountree | $ / shares | $ 0.12 |
Stock-based compensation between related notes payable and accrued interest and fair value of shares issued | $ 28,616 |
STOCK- BASED COMPENSATION (Deta
STOCK- BASED COMPENSATION (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
OTHER ISSUANCES OF COMMON STOCK FOR SERVICES | ||
Company issued shares of common stock for consulting services | $ 3,400,000 | |
Stock-based compensation based on grant date fair value of common shares issued | 399,300 | |
Company issued shares for services | 8,000,000 | |
Consulting fees | 128,000 | |
SERIES A PREFERRED STOCK ISSUED FOR SERVICES | ||
Third party valuation of preferred stock and recorded stock-based compensation on June 3, 2015 | 920,800 | |
Third party valuation of preferred stock and recorded stock-based compensation on September 26, 2015 | 317,100 | |
STOCK OPTION AWARDS | ||
Company recognized stock-based compensation expense | 1,177,752 | $ 2,626,715 |
Total unrecognized compensation cost related to non-vested stock options | $ 863,633 |
SERIES A PREFERRED STOCK ISSUED
SERIES A PREFERRED STOCK ISSUED FOR SERVICES (Details) - shares | Sep. 26, 2015 | Jun. 03, 2015 | Feb. 02, 2015 |
SERIES A PREFERRED STOCK ISSUED FOR SERVICES DETAILS | |||
Company issued shares of Series A preferred stock to a Director for services | 4,000,000 | 1,000,000 | |
Each share of Series A preferred stock shall have votes | 1,000 | 1,000 | |
2015 EQUITY INCENTIVE PLAN | |||
Total of shares of common stock are reserved for issuance under the 2015 Plan | 11,000,000 |
STOCK OPTION AWARDS (Details)
STOCK OPTION AWARDS (Details) | Feb. 02, 2015$ / sharesshares |
STOCK OPTION AWARDS | |
Ten-year non-statutory stock options to purchase shares of common stock | shares | 6,950,000 |
Stock options vest over the month period | 36 |
Exercise price per share were issued under the 2015 Equity Incentive Plan | $ / shares | $ 0.10 |
Options term in year | 10 |
Stock price on the grant date | $ / shares | $ 0.03 |
Intrinsic value for options | shares | 0 |
BLACK SCHOLES OPTION PRICING MO
BLACK SCHOLES OPTION PRICING MODEL WITH WEIGHTED AVERAGE ASSUMPTIONS (Details) | Feb. 02, 2015 |
BLACK SCHOLES OPTION PRICING MODEL WITH WEIGHTED AVERAGE ASSUMPTIONS | |
Risk free interest rate | 1.68% |
Term in years | 10 |
Expected stock volatility | 176.00% |
Expected dividend rate | 0.00% |
STOCK OPTION ACTIVITY (Details)
STOCK OPTION ACTIVITY (Details) {Stockholder Equity} | 9 Months Ended |
Sep. 30, 2015shares | |
Number of Shares | |
Stock option Outstanding | 2,583,744 |
Stock option Granted | 6,950,000 |
Stock option Forfeited/Cancelled/Expired | (551,947) |
Stock option Outstanding | 8,981,797 |
Stock option Exercisable | 3,159,218 |
Weighted-average Exercise Price | |
Stock option Outstanding | 0.81 |
Stock option Granted | 0.1 |
Stock option Forfeited/Cancelled/Expired | 0.41 |
Stock option Outstanding | 0.28 |
Stock option Exercisable | 0.44 |
Weighted-average Remaining Contractual Term (years) | |
Stock option Outstanding | 8.98 |
Stock option Exercisable | 8.55 |
Aggregate Intrinsic Value | |
Stock option Outstanding | 0 |
WARRANT AWARDS (Details)
WARRANT AWARDS (Details) - $ / shares | Sep. 01, 2015 | May. 19, 2015 | Mar. 31, 2015 | Feb. 28, 2015 | Feb. 01, 2015 | Jan. 31, 2015 |
WARRANT AWARDS | ||||||
Company issued warrants to a third party to purchase shares of common stock granted | 250,000 | |||||
Company issued warrants to a third party to purchase shares of common stock granted with an exercise price | $ 0.1083 | |||||
Stock price | $ 0.002 | $ 0.11 | $ 0.06 | $ 0.12 | $ 0.12 | $ 0.10 |
Intrinsic value for warrants on the grant date | 1,000 | 0 | 0 | 2,200 | 1,400 | 0 |
Fair value of warrants | 1,960 | 23,284 | 29,000 | 129,880 | 82,650 | 38,774 |
Risk free interest rate of warrants | 2.17% | 1.01% | 1.98% | 1.68% | 1.68% | 1.29% |
Term in years of warrants | 5 | 3 | 10 | 10 | 10 | 5 |
Expected stock volatility of warrants | 135.63% | 163.47% | 147.00% | 148.00% | 148.00% | 107.00% |
Expected dividend rate of warrants | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
Company issued shares of common stock to an investor | 500,000 | |||||
Company issued warrants to an investor | 500,000 | |||||
Company issued common stock and warrants to an investor for cash proceeds | 25,000 | |||||
Warrants term in year | 10 | 10 | 5 | |||
Company issued common stock and warrants to an investor at an exercise price | $ 0.10 | |||||
Issued a ten-year warrant to purchase shares of common stock | 100,000 | 100,000 | ||||
Issued a ten-year warrant to purchase shares of common stock at an exercise price | 0.10 | 0.10 | ||||
Issuance of an aggregate warrants | 1,100,000 | 700,000 | ||||
Issued warrants with the issuance of a convertible note agreement | 500,000 | |||||
Issued warrants with the issuance of a convertible note agreement at an exercise price | $ 0.10 | |||||
Company issued warrants to Mike Hogue | 1,000,000 | |||||
Company issued warrants to Mike Hogue at an exercise price | $ 0.001 |
WARRANT ACTIVITY (Details) {Sto
WARRANT ACTIVITY (Details) {Stockholder Equity} | 9 Months Ended |
Sep. 30, 2015shares | |
Number of Shares | |
Warrant Outstanding | 3,760,831 |
Warrant Granted | 4,050,000 |
Warrants issued pursuant to anti-dilution adjustments | 53,448,344 |
Warrant Exercised | 0 |
Warrant Expired/Forfeited | (250,000) |
Warrant Outstanding and exercisable | 61,009,175 |
Weighted-average Exercise Price | |
Warrant Outstanding | 0.75 |
Warrant Granted | 0.1 |
Warrants issued pursuant to anti-dilution adjustments | 0.48 |
Warrant Expired/Forfeited | 1 |
Warrant Outstanding and exercisable | 0.45 |
Weighted-average Remaining Contractual Term (years) | |
Warrant Outstanding and exercisable | 7.3 |
Aggregate Intrinsic Value | |
Warrant Outstanding and exercisable | 26,500 |
COMMITMENTS (DETAILS)
COMMITMENTS (DETAILS) | May. 19, 2015USD ($) | Oct. 28, 2014 | Aug. 31, 2014USD ($) |
COMMITMENTS DETAILS | |||
Company entered into consulting services agreement individual will be paid | $ 50,000 | ||
The assets assigned to the Company had a fair value of | $ 0 | ||
OTC Media a service fee equal to | 20.00% | ||
Company entered into consulting agreement with VC Advisors in months | 12 | ||
VC a service fee equal to per month, payable in cash | $ 15,000 | ||
Mitchell a service fee equal to | 1,500 | ||
VC a service fee equal to per month, payable in cash per hour | $ 200 |
FAIR VALUE MEASUREMENTS (DETAIL
FAIR VALUE MEASUREMENTS (DETAILS) | Sep. 30, 2015shares |
Quoted Prices In Active Markets for Identical Assets (Level 1) | |
Warrant derivatives Quoted Prices | 0 |
Variable conversion features convertible debt derivatives Quoted Prices | 0 |
Total Warrant derivatives Quoted Prices | 0 |
Significant Other Observable Inputs (Level 2) | |
Warrant derivatives Significant Other Observable | 0 |
Variable conversion features convertible debt derivatives Significant Other Observable | 0 |
Total Warrant derivatives Significant Other Observable | 0 |
Significant Unobservable Inputs (Level 3) | |
Warrant derivatives Significant Unobservable | 249,574 |
Variable conversion features convertible debt derivatives Significant Unobservable | 3,245,974 |
Total Warrant derivatives Significant Unobservable | 3,495,548 |
Total Carrying Value as of September 30,2015 | |
Warrant derivatives Total Carrying Value | 249,574 |
Variable conversion features convertible debt derivatives Total Carrying Value | 3,245,974 |
Total Warrant derivatives Total Carrying Value | 3,495,548 |
FAIR VALUE ON A RECURRING BASIS
FAIR VALUE ON A RECURRING BASIS AS OF SEPTEMBER 30, 2014 (DETAILS) | Sep. 30, 2015shares |
Quoted Prices In Active Markets for Identical Assets (Level 1) | |
Derivative liabilities - warrant instruments Level 1 | 0 |
Significant Other Observable Inputs (Level 2) | |
Derivative liabilities - warrant instruments Level 2 | 0 |
Significant Unobservable Inputs (Level 3) | |
Derivative liabilities - warrant instruments Level 3 | 2,651,155 |
Total Carrying Value as of September 30,2015 | |
Derivative liabilities - warrant instruments Total Carrying Value | 2,651,155 |
FINANCIAL LIABILITES CLASSIFIED
FINANCIAL LIABILITES CLASSIFIED AS LEVEL 3 (DETAILS) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
FINANCIAL LIABILITES CLASSIFIED AS LEVEL 3 DETAILS | ||
Beginning balance | $ 505,193 | $ 0 |
Additions | 4,198,967 | 449,624 |
Debt conversion-extinguishment | (3,174,971) | 0 |
Change in fair value | 1,966,358 | 2,201,531 |
Ending balance | 3,495,547 | 2,651,155 |
Change in unrealized gain included in earnings | $ 1,966,358 | $ 2,201,531 |
SUBSEQUENT EVENTS (DETAILS)
SUBSEQUENT EVENTS (DETAILS) | Sep. 30, 2015shares |
SUBSEQUENT EVENTS DETAILS | |
Company issued a total of shares | 532,370,521 |
Conversion notices received for a total in principal and interest | 279,513 |