Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 07, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | LIFEAPPS BRANDS INC. | |
Entity Central Index Key | 1,510,247 | |
Document Type | 10-Q | |
Trading Symbol | LFAP | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 20,515,731 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,016 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash | $ 3,322 | $ 4,968 |
Other current assets | 940 | 940 |
Total current assets | 4,262 | 5,908 |
Fixed assets, net of depreciation | 649 | |
Intangible asset, net of amortization | 1,575 | 10,274 |
Total Assets | 5,837 | 16,831 |
Current liabilities: | ||
Accounts payable and accrued expenses | 117,632 | 126,871 |
Amount due to related party | 441,189 | 329,554 |
Total current liabilities | 558,821 | 456,425 |
Stockholders' Equity (Deficit) | ||
Preferred stock, $.001 par value, 10,000,000 authorized, none issued or outstanding | ||
Common stock, $0.001 par value, 300,000,000 shares authorized, 20,515,731 and 19,918,186 shares issued and outstanding, as of June 30, 2016 and December 31, 2015, respectively | 20,515 | 19,918 |
Additional paid in capital | 2,070,705 | 2,063,244 |
Accumulated (deficit) | (2,644,204) | (2,522,756) |
Total stockholders' (deficit) | (552,984) | (439,594) |
Total Liabilities and Stockholders' Equity (Deficit) | $ 5,837 | $ 16,831 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ .001 | $ .001 |
Preferred stock, authorized | 10,000,000 | 10,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ .001 | $ .001 |
Common stock, authorized | 300,000,000 | 300,000,000 |
Common stock, issued | 20,515,731 | 19,918,186 |
Common stock, outstanding | 20,515,731 | 19,918,186 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | ||
Income Statement [Abstract] | |||||
Revenue | $ 4,433 | $ 48,685 | $ 11,021 | $ 110,002 | |
Cost of revenue | 1,615 | 39,230 | 8,071 | 80,074 | |
Gross profit (loss) | 2,818 | 9,455 | 2,950 | 29,928 | |
Operating expenses: | |||||
General and administrative | 60,953 | 85,041 | 115,049 | 198,363 | |
Depreciation and amortization | 322 | 9,666 | 9,349 | 19,333 | |
Total operating expenses | 61,275 | 94,707 | 124,398 | 217,696 | |
Operating loss | (58,457) | (85,252) | (121,448) | (187,768) | |
Other income and expenses: | |||||
Change in derivative liability | 54,765 | 189,660 | |||
Loss on debt conversion | 47,500 | ||||
Interest (income) expense | 13,463 | 28,094 | |||
Total other income and expenses | 68,228 | 265,254 | |||
Net (loss) | $ (58,457) | $ (153,480) | $ (121,448) | $ (453,022) | |
Per share information - basic and fully diluted: | |||||
Weighted average shares outstanding (in shares) | 20,515,731 | 9,534,178 | 20,492,493 | 8,105,425 | |
Net (loss) per share (in dollars per share) | [1] | $ 0 | $ 0 | $ 0 | $ 0 |
[1] | Denotes a loss of less than $(0.01) per share. |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Statement of Cash Flows [Abstract] | ||
Net cash used in operations | $ (38,281) | $ (61,185) |
Cash flows from investing activities: | ||
Net Cash used in investing activities | ||
Cash flow from financing activities: | ||
Related party advances | 38,635 | 63,050 |
Repayments of advances from related parties | (2,000) | (1,800) |
Net cash provided by financing activities | 36,635 | 61,250 |
Net (decrease) increase in cash | (1,646) | 65 |
Cash at beginning of period | 4,968 | 19,941 |
Cash at end of period | 3,322 | 20,006 |
Non-cash financing activities: | ||
Conversion of notes payable to common stock | 166,895 | |
Conversion of related party loans to common stock | $ 78,750 |
Nature of Business
Nature of Business | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | Note 1. Nature of Business Throughout this report, the terms our, we, us, and the Company refer to LifeApps Digital Media Inc., including its subsidiaries. The accompanying unaudited condensed consolidated financial statements of LifeApps Digital Media Inc. at June 30, 2016 and 2015 have been prepared in accordance with generally accepted accounting principles (GAAP) for interim financial statements, instructions to Form 10-Q, and Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2015. In management's opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation to make our financial statements not misleading have been included. The results of operations for the periods ended June 30, 2016 and 2015 presented are not necessarily indicative of the results to be expected for the full year. The December 31, 2015 balance sheet has been derived from our audited financial statements included in our annual report on Form 10-K for the year ended December 31, 2015. We are building health, fitness and sports communities across multiple digital platforms including mobile apps, digital sports and fitness publications, sports and fitness products, sporting events, gateway platforms, online websites and social media. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies The accompanying financial statements have been prepared in conformity with generally accepted accounting principles (GAAP), which contemplates our continuation as a going concern. We have incurred losses to date of $2,644,204. To date we have funded our operations through advances from a related party, issuance of convertible debt, and the sale of our common stock. We intend to raise additional funding through third party equity or debt financing. There is no certainty that funding will be available as needed. These factors raise substantial doubt about our ability to continue operating as a going concern. Our ability to continue our operations as a going concern, realize the carrying value of our assets, and discharge our liabilities in the normal course of business is dependent upon our ability to raise capital sufficient to fund our commitments and ongoing losses, and ultimately generate profitable operations. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and our wholly owned subsidiaries, LifeApps Inc. and Sports One Group Inc. All material inter-company transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the years reported. Actual results may differ from these estimates. Financial Instruments The estimated fair values for financial instruments were determined at discrete points in time based on relevant market information. These estimates involved uncertainties and could not be determined with precision. The carrying amounts of accounts receivable, accounts payable and accrued liabilities approximated fair value because of the short-term maturities of these instruments. The fair value of notes payable approximated to their carrying value as generally their interest rates reflected our effective annual borrowing rate. Intangibles Intangibles, which include websites and databases acquired, internet domain name costs, and customer lists, are being amortized over the expected useful lives which we estimate to be three to five years. In accordance with Financial Accounting Standards Board (FASB), Accounting Standards Codification (ASC) Topic 350 Intangibles Goodwill and Other Fixed Assets Fixed assets consists of furniture and equipment and are stated at cost less accumulated depreciation and accumulated impairment loss, if any. Depreciation is calculated on a straight line basis over the estimated useful lives of the assets. The estimated useful lives used for financial statement purposes is 3 years. Derivative Financial Instruments: We do not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, we used a Black Scholes valuation model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. Revenue Recognition Revenue is derived primarily from the sale of sports and fitness apparel and equipment, and software applications designed for use on mobile devices such as smart phones and tablets. Revenue is recognized only when persuasive evidence of an arrangement exists, the fee is fixed or determinable, the product or service has been delivered, and collectability is probable. We sell our software directly via Internet download through third party agents. We recognize revenue when payment is received from the agent. Payment is received net of commission paid to the agent, usually 70% to us and 30% to the agent. We record the net amount received as revenue. We also publish and sell digital magazines through the internet. Magazines can be purchased as individual volumes or as a subscription. To date we have not had any subscription sales. Cost of Revenue Cost of revenue includes the cost of amounts paid for articles, photography, editorial and production cost of the magazine and ongoing web hosting costs. Cost of revenue related to product sales includes the direct cost of those products sold. Research and development, Website Development Costs, and Software Development Costs All research and development costs are expensed as incurred. Software development costs eligible for capitalization under ASC 350-50, Website Development Cost Software-Costs of Software to be Sold, Leased or Marketed Advertising Costs We recognize advertising expense when incurred. Advertising expense was $130 and $912 for the three months ended June 30, 2016 and 2015, respectively and $130 and $2,851 for six months ended June 30, 2016 and 2015, respectively. Rent Expense We recognize rent expense on a straight-line basis over the reasonably assured lease term as defined in ASC Topic 840, Leases Equity-Based Compensation Stock-based compensation is presented in accordance with the guidance of ASC Topic 718, Compensation Stock Compensation Income Taxes The provision for income taxes is determined in accordance with the provisions of ASC Topic 740, Accounting for Income Taxes ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements, uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. For the for three and six months ended June 30, 2016 and 2015 we did not have any interest, penalties or any significant unrecognized uncertain tax positions. Earnings per share We calculate earnings per share in accordance with ASC Topic 260 Earnings Per Share Recent Pronouncements From time to time, new accounting pronouncements are issued that we adopt as of the specified effective date. We believe that the recently issued standards that are not yet effective may not have an impact on our results of operations and financial position. |
Fixed Assets
Fixed Assets | 6 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets | Note 3. Fixed Assets At June 30, 2016 and December 31, 2015, fixed assets consisted of the following: 2016 2015 Furniture and Equipment $ 7,670 $ 7,670 Less accumulated depreciation (7,670 ) (7,021 ) $ - $ 649 The amount charged to depreciation expense furniture and equipment was $42 and $639 for of the three months ended June 30, 2016 and 2015, respectively and was $649 and $1,278 for of the six months ended June 30, 2016 and 2015, respectively. |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 4. Intangible Assets At June 30 2016 and December 31, 2015, intangible assets consist of the following: 2016 2015 Internet domain names $ 58,641 $ 58,641 Less accumulated amortization (58,641 ) (55,062 ) $ - $ 3,580 Website and data bases $ 56,050 $ 56,050 Less accumulated amortization (56,050 ) (51,380 ) $ - $ 4,760 Customer and supplier lists $ 4,500 $ 4,500 Less accumulated amortization (2,925 ) (2,475 ) $ 1,575 $ 2,025 Total intangibles $ 119,191 $ 119,191 (117,616 ) (108,917 ) $ 1,575 $ 10,274 We recognized goodwill and identifiable intangibles arising from the allocation of the purchase prices of assets acquired in accordance with ASC 805. Goodwill represents the excess of cost over fair value of all identifiable assets less any liabilities assumed. We have not recognized any goodwill in these financial statements. Additionally, ASC 805 gives guidance on five types of assets: marketing-related, customer-related, artistic-related, contract-related, and technology based intangible assets. We identified identifiable intangibles that are marketing-related, customer-related, and technology based. The amount charged to amortization expense for all intangibles was $280 and $9,028 for the three months ended June 30, 2016 and 2015, respectively and was $8,699 and $18,055 for the six months ended June 30, 2016 and 2015, respectively. Estimated future amortization expense related to the intangibles as of June 30, 201 is as follows: Year Ended December 31, 2016 450 2017 900 2018 225 $ 1,575 |
Amounts Due Related Parties
Amounts Due Related Parties | 6 Months Ended |
Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
Amounts Due Related Parties | Note 5. Amounts Due Related Parties Parties, which can be a corporation or an individual, are considered to be related if we have the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence. Amount due to related parties represent cash advances, salary accruals and amounts paid on our behalf by officers and shareholders of the Company. These advances are non-interest bearing, short term in nature and due on demand. The balance at June 30, 2016 and December 31, 2015, was $441,189 and $329,554, respectively. Salary accruals for each period amounted to $75,000 and net cash advances amounted to $38,638 and $63,050, respectively for the six months ended June 30, 2016 and 2015. On March 25, 2015, we entered into a debt conversion agreement with our CEO and principal stockholder. The agreement provided the CEO with the right to convert $31,250 owed to him for working capital loans made to the Company for 1,666,667 restricted shares of our common stock. The conversion price was based on the following formula - equal to the lesser of $1.02 or 60% of the lowest trade price ($0.0025) in the 25 trading days previous to the conversion. (In the event that Conversion Shares are not deliverable by DWAC, an additional 10% discount shall apply; if the shares are ineligible for deposit into the DTC system and only eligible for Xclearing deposit, an additional 5% discount shall apply; and in the case of both, an additional cumulative 15% discount shall apply.) The conversion price as calculated was $0.01875 per share (post-split basis). We recognized a loss on conversion of $47,500, the difference between the conversion price and the closing trading price on the date of the conversion. |
Convertible Notes Payable
Convertible Notes Payable | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable | Note 6. Convertible Notes Payable During 2014, we executed a Promissory Note (the Note) and received three draws totaling $135,000. The Note is due March 17, 2016 and provides for an original issue discount of $15,185, which was to be amortized over 24 months, and face interest rate of 12% per annum. The Lender had the right, at any time at its election to convert all or part of the outstanding and unpaid principal and accrued interest into shares of our common stock. The conversion price is the lesser of $0.0485 or 60% of the lowest trading price in the 25 trading days prior the conversion. The Note provides for additional penalties if we cannot deliver the underlying common stock on a timely basis. The Note also provides that the principal amount may be increased, with the consent of the lender to $445,000. We evaluated the terms of the conversion features of the convertible debenture in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity's Own Stock and determined it is indexed to the Company's common stock and that the conversion features meet the definition of a liability and therefore bifurcated the conversion feature and accounted for it as a separate derivative liability. We valued the conversion feature at origination of all draws at $230,408 using the Black Scholes valuation model with the following assumptions: dividend yield of zero, 1.25 to 2 years to maturity, risk free interest rate of 0.38% to 0.58% and annualized volatility of 97.34% to 146%. $135,000 of the value assigned to the derivative liability was recognized as a debt discount on the convertible debenture. The debt discount was recorded as reduction (contra-liability) to the convertible debenture and is being amortized over the life of the convertible debenture. The balance of $95,408 of the value assigned to the derivative liability was recognized as origination interest on the derivative liability and expensed on origination. We valued the derivative liability and the end of each accounting period the difference in value is recognized as gain or loss. At June 30, 2015 we determined the valuation using the Black-Sholes valuation model with the following assumptions: dividend yield of zero, 0.96 years to maturity, risk free interest rate of 0.56% and annualized volatility of 167%. We recognized $189,660 of expense for the change in value of the derivative for the six months ended June 30, 2015. During the six months ended June 30, 2015, the lender converted $64,920 of the principal of the Note into 3,589,115 shares of our $0.001 common stock. The loans were fully converted to common stock during August of 2015. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Note 7. Stockholders Equity During the six months ended June 30, 2015 we issued 5,255,782 shares of common stock as a result of conversion of debt. As more fully described in Notes 5 and 6 above, of the shares issued, 3,589,115 were to an unrelated note holder and 1,666,667 were to officers and/or directors of the Company. During the six months ended June 30, 2016 we issued 597,545 shares of common stock in settlement of $8,058 in previously accrued legal services. |
Stock Based Compensation
Stock Based Compensation | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Based Compensation | Note 8. Stock Based Compensation In prior periods, our Board of Directors adopted the 2012 Equity Incentive Plan (2012 Plan), which was approved by our shareholders. The 2012 Plan provided for the issuance of up to 666,667 shares of our common stock. During October 2015 the Board of Directors amended the plan to increase the number of shares issuable under the LifeApps Digital Media Inc. 2012 Equity Incentive Plan to 20,000,000, on a post-Reverse Stock Split basis. The plan provides for the award of options, stock appreciation rights, performance share awards, and restricted stock and stock units. The plan is administered by the Board of Directors. Pursuant to the 2012 Plan our Board of Directors granted options to purchase 418,333 shares of our common stock in periods prior to December 31, 2015. All of those options have been cancelled or lapsed as of June 30, 2016. On May 24, 2016 our Board of Directors granted options to purchase 15,000,000 shares of our common stock to officers and or directors and a consultant. The options are exercisable quarterly from the grant date over a four-year term. The fair value of the options granted, $39,000, was estimated at the date of grant using the Black-Scholes option pricing model, with the following assumptions: Expected life (in years) 4 Volatility 383 % Risk Free interest rate 0.68 % Dividend yield (on common stock) - There was no stock based compensation expense recorded for the periods ended June 30, 2016 and 2015 as the prior year options were fully vested during 2014 and none of the 2016 grants are currently vested. The following is a summary of stock option issued to employees and directors: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding January 1, 2016 240,000 $ 0.57 - - Granted 10,000,000 $ .0026 3.9 - Exercised - $ - - - Cancelled 240,000 $ .057 - - Outstanding June 30, 2016 10,000,000 $ .0026 3.9 - Exercisable June 30, 2016 - $ - - - There will be approximately $26,000 of additional compensation expense recognized in future periods. The following is a summary of stock options issued to non-employees, excluding Directors: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value at date of grant Outstanding January 1, 2016 375,000 $ 0.87 - - Granted 5,000,000 $ .0026 3.9 - Exercised - $ - - - Cancelled 375,000 $ .87 - - Outstanding June 30, 2016 5,000,000 $ 0.0026 3.9 $ - Exercisable June 30, 2016 - $ - - $ - There will be approximately $13,000 of additional compensation expense recognized in future periods. |
Outstanding Warrants
Outstanding Warrants | 6 Months Ended |
Jun. 30, 2016 | |
Warrants and Rights Note Disclosure [Abstract] | |
Outstanding Warrants | Note 9. Outstanding Warrants There were no warrants issued during the periods ended June 30, 2016 or 2015. The following is a summary of outstanding warrants as of June 30, 2016: Number of warrants Exercise price per share Average remaining term in years Aggregate intrinsic value at date of grant Warrants issued in connection with private placement of units in 2012 400,000 $ 15.00 1.25 $ - The warrants expire on September 20, 2017. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 10. Income Taxes Income tax provision (benefit) for the periods ended June 30, 2016 and 2015, is summarized below: 2016 2015 Current: Federal $ - $ - State - - Total current - - Deferred: Federal (41.300 ) (63,800 ) State (6,700 ) (10,300 ) Total deferred (48,000 ) (74,100 ) Increase in valuation allowance 48,000 74,100 Total provision $ - $ - The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences as of June 30, 2016 and 2015 are as follows: 2016 2015 Income tax provision at the federal statutory rate 34.0 % 34.0 % State income taxes, net of federal benefit 5.5 % 5.5 % Increase in valuation allowance (39.5 )% (39.5) % 0.0 % 0.0 % There are open statutes of limitations for taxing authorities in federal and state jurisdictions to audit our tax returns from 2010 through the current period. Our policy is to account for income tax related interest and penalties in income tax expense in the consolidated statement of operations. There have been no income tax related interest or penalties assessed or recorded. |
Business Segments
Business Segments | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Business Segments | Note 11. Business Segments We currently have two business segments; (i) the sale of physical products (Products) and (ii) digital publishing (Publishing). The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The publishing segment does not meet the quantitative threshold for disclosure as outlined ASC Topic 280 Segment Reporting. All of our revenue is generated in the United States and accordingly no geographic segment reporting is included. No customers accounted for more than 10% of our revenues in the periods June 30, 2016 and 2015. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 12. Subsequent Events Management has evaluated all activity and concluded that no subsequent events have occurred that would require recognition in these financial statements or disclosure in the notes to these financial statements. On May 21, 2016, we entered into an agreement (the Agreement) with FemCap Inc. (FemCap) providing for the exclusive right for a 90-day period for us to purchase FemCaps operating assets, subject to the satisfaction of certain terms and conditions set forth in the Agreement. Under the Agreement, we have a 90-day exclusive right to purchase FemCaps operating assets used to market and sell FemCap and FemmyCycle® feminine hygiene products. Such operating assets include molds, equipment, contract rights, customer lists, leases, accounting records and intellectual property. Terms of the Agreement include the following being delivered to FemCap: a. $2.0 million upfront on the closing date for the transaction; b. One million shares of our restricted common stock, with one-third vesting on each one-year anniversary of the closing date based on the founders continued employment by us; c. A 5% royalty on gross sales revenue from the sales of FemCap and FemmyCycle® products for a period of five years from the closing date; and d. A three-year employment agreement with the founder of FemCap Inc. for part-time employment to assist with the transition of knowledge and continuing development of the business and other products. Conditions to closing include negotiation of definitive agreements to the satisfaction of both parties, and our raising a minimum of $3.5 million in capital to provide for the upfront payment, with sufficient funds remaining for development of additional products. We will not be able to complete the purchase of FemCaps operating assets within the 90-day exclusivity period and may never complete such purchase. Following the end of the exclusivity period, we will have the non-exclusive right to acquire the FemCap operating assets. |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and our wholly owned subsidiaries, LifeApps Inc. and Sports One Group Inc. All material inter-company transactions and balances have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the years reported. Actual results may differ from these estimates. |
Financial Instruments | Financial Instruments The estimated fair values for financial instruments were determined at discrete points in time based on relevant market information. These estimates involved uncertainties and could not be determined with precision. The carrying amounts of accounts receivable, accounts payable and accrued liabilities approximated fair value because of the short-term maturities of these instruments. The fair value of notes payable approximated to their carrying value as generally their interest rates reflected our effective annual borrowing rate. |
Intangibles | Intangibles Intangibles, which include websites and databases acquired, internet domain name costs, and customer lists, are being amortized over the expected useful lives which we estimate to be three to five years. In accordance with Financial Accounting Standards Board (FASB), Accounting Standards Codification (ASC) Topic 350 Intangibles Goodwill and Other |
Fixed Assets | Fixed Assets Fixed assets consists of furniture and equipment and are stated at cost less accumulated depreciation and accumulated impairment loss, if any. Depreciation is calculated on a straight line basis over the estimated useful lives of the assets. The estimated useful lives used for financial statement purposes is 3 years. |
Derivative Financial Instruments | Derivative Financial Instruments: We do not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, we used a Black Scholes valuation model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. |
Revenue Recognition | Revenue Recognition Revenue is derived primarily from the sale of sports and fitness apparel and equipment, and software applications designed for use on mobile devices such as smart phones and tablets. Revenue is recognized only when persuasive evidence of an arrangement exists, the fee is fixed or determinable, the product or service has been delivered, and collectability is probable. We sell our software directly via Internet download through third party agents. We recognize revenue when payment is received from the agent. Payment is received net of commission paid to the agent, usually 70% to us and 30% to the agent. We record the net amount received as revenue. We also publish and sell digital magazines through the internet. Magazines can be purchased as individual volumes or as a subscription. To date we have not had any subscription sales. |
Cost of Revenue | Cost of Revenue Cost of revenue includes the cost of amounts paid for articles, photography, editorial and production cost of the magazine and ongoing web hosting costs. Cost of revenue related to product sales includes the direct cost of those products sold. |
Research and development, Website Development Costs, and Software Development Costs | Research and development, Website Development Costs, and Software Development Costs All research and development costs are expensed as incurred. Software development costs eligible for capitalization under ASC 350-50, Website Development Cost Software-Costs of Software to be Sold, Leased or Marketed |
Advertising Costs | Advertising Costs We recognize advertising expense when incurred. Advertising expense was $130 and $912 for the three months ended June 30, 2016 and 2015, respectively and $130 and $2,851 for six months ended June 30, 2016 and 2015, respectively. |
Rent Expense | Rent Expense We recognize rent expense on a straight-line basis over the reasonably assured lease term as defined in ASC Topic 840, Leases |
Equity-Based Compensation | Equity-Based Compensation Stock-based compensation is presented in accordance with the guidance of ASC Topic 718, Compensation Stock Compensation |
Income Taxes | Income Taxes The provision for income taxes is determined in accordance with the provisions of ASC Topic 740, Accounting for Income Taxes ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements, uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. For the for three and six months ended June 30, 2016 and 2015 we did not have any interest, penalties or any significant unrecognized uncertain tax positions. |
Earnings per share | Earnings per share We calculate earnings per share in accordance with ASC Topic 260 Earnings Per Share |
Recent Pronouncements | Recent Pronouncements From time to time, new accounting pronouncements are issued that we adopt as of the specified effective date. We believe that the recently issued standards that are not yet effective may not have an impact on our results of operations and financial position. |
Fixed Assets (Tables)
Fixed Assets (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of fixed assets | At June 30, 2016 and December 31, 2015, fixed assets consisted of the following: 2016 2015 Furniture and Equipment $ 7,670 $ 7,670 Less accumulated depreciation (7,670 ) (7,021 ) $ - $ 649 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | At June 30 2016 and December 31, 2015, intangible assets consist of the following: 2016 2015 Internet domain names $ 58,641 $ 58,641 Less accumulated amortization (58,641 ) (55,062 ) $ - $ 3,580 Website and data bases $ 56,050 $ 56,050 Less accumulated amortization (56,050 ) (51,380 ) $ - $ 4,760 Customer and supplier lists $ 4,500 $ 4,500 Less accumulated amortization (2,925 ) (2,475 ) $ 1,575 $ 2,025 Total intangibles $ 119,191 $ 119,191 (117,616 ) (108,917 ) $ 1,575 $ 10,274 |
Schedule of estimated future amortization expense related to the intangibles | Estimated future amortization expense related to the intangibles as of June 30, 201 is as follows: Year Ended December 31, 2016 450 2017 900 2018 225 $ 1,575 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of fair value of the options of grant using the Black-Scholes option pricing model | The fair value of the options granted, $39,000, was estimated at the date of grant using the Black-Scholes option pricing model, with the following assumptions: Expected life (in years) 4 Volatility 383 % Risk Free interest rate 0.68 % Dividend yield (on common stock) - |
Schedule of stock option issued employees and directors | The following is a summary of stock option issued to employees and directors: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding January 1, 2016 240,000 $ 0.57 - - Granted 10,000,000 $ .0026 3.9 - Exercised - $ - - - Cancelled 240,000 $ .057 - - Outstanding June 30, 2016 10,000,000 $ .0026 3.9 - Exercisable June 30, 2016 - $ - - - |
Schedule of stock option issued to non employees | The following is a summary of stock options issued to non-employees, excluding Directors: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value at date of grant Outstanding January 1, 2016 375,000 $ 0.87 - - Granted 5,000,000 $ .0026 3.9 - Exercised - $ - - - Cancelled 375,000 $ .87 - - Outstanding June 30, 2016 5,000,000 $ 0.0026 3.9 $ - Exercisable June 30, 2016 - $ - - $ - |
Outstanding Warrants (Tables)
Outstanding Warrants (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Warrants and Rights Note Disclosure [Abstract] | |
Schedule of outstanding warrants | The following is a summary of outstanding warrants as of June 30, 2016: Number of Exercise price Average Aggregate Warrants issued in connection with private placement of units in 2012 400,000 $ 15.00 1.25 $ - |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax provision (benefit) | Income tax provision (benefit) for the periods ended June 30, 2016 and 2015, is summarized below: 2016 2015 Current: Federal $ - $ - State - - Total current - - Deferred: Federal (41.300 ) (63,800 ) State (6,700 ) (10,300 ) Total deferred (48,000 ) (74,100 ) Increase in valuation allowance 48,000 74,100 Total provision $ - $ - |
Schedule of sources and tax effects | The sources and tax effects of the differences as of June 30, 2016 and 2015 are as follows: 2016 2015 Income tax provision at the federal statutory rate 34.0 % 34.0 % State income taxes, net of federal benefit 5.5 % 5.5 % Increase in valuation allowance (39.5 )% (39.5) % 0.0 % 0.0 % |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Accumulated (deficit) | $ (2,644,204) | $ (2,644,204) | $ (2,522,756) | ||
Percentage of commissions paid to us | 70.00% | ||||
Percentage of commissions paid to agent | 30.00% | ||||
Furniture and equipment estimated useful lives | 3 years | ||||
Research and development expenses | 200 | $ 0 | $ 200 | $ 7,977 | |
Advertising expense | 130 | 912 | 130 | 2,851 | |
Rent expense | $ 1,430 | $ 1,290 | $ 3,575 | $ 3,354 | |
Minimum [Member] | |||||
Intangibles assets estimated useful life | 3 years | ||||
Maximum [Member] | |||||
Intangibles assets estimated useful life | 5 years |
Fixed Assets (Details Narrative
Fixed Assets (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Furniture And Equipment [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation expense | $ 42 | $ 639 | $ 649 | $ 1,278 |
Fixed Assets (Details)
Fixed Assets (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Less accumulated depreciation | $ (7,670) | $ (7,021) |
Net | 649 | |
Furniture And Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross | $ 7,670 | $ 7,670 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 280 | $ 9,028 | $ 8,699 | $ 18,055 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Gross intangibles | $ 119,191 | $ 119,191 |
Less accumulated amortization | (117,616) | (108,917) |
Total intangibles | 1,575 | 10,274 |
Internet Domain Names [Member] | ||
Gross intangibles | 58,641 | 58,641 |
Less accumulated amortization | (58,641) | (55,062) |
Total intangibles | 3,580 | |
Website And Databases [Member] | ||
Gross intangibles | 56,050 | 56,050 |
Less accumulated amortization | (56,050) | (51,380) |
Total intangibles | 4,760 | |
Customer And Supplier Lists [Member] | ||
Gross intangibles | 4,500 | 4,500 |
Less accumulated amortization | (2,925) | (2,475) |
Total intangibles | $ 1,575 | $ 2,025 |
Intangible Assets (Details 1)
Intangible Assets (Details 1) | Jun. 30, 2016USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
2,016 | $ 450 |
2,017 | 900 |
2,018 | 225 |
Estimated future amortization expense | $ 1,575 |
Amounts Due Related Parties (De
Amounts Due Related Parties (Details Narrative) | Mar. 25, 2015USD ($)Number$ / shares | Jun. 30, 2015USD ($)Number | Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($) |
Amount due to related party | $ 441,189 | $ 329,554 | ||
Accrued salary | $ 75,000 | 75,000 | ||
Net cash advances | $ 63,050 | $ 38,638 | ||
Number of shares isssued for conversion | Number | 5,255,782 | |||
Mr. Robert Gayman [Member] | ||||
Number of shares isssued for conversion | Number | 1,666,667 | |||
Mr. Robert Gayman [Member] | Debt Conversion Agreement [Member] | ||||
Debt conversion type of equity security | Restricted common shares | |||
Debt beneficial conversion feature | $ 31,250 | |||
Number of shares isssued for conversion | Number | 1,666,667 | |||
Debt conversion price (in dollars per share) | $ / shares | $ 0.01875 | |||
Description of conversion price | The conversion price was based on the following formula - equal to the lesser of $1.02 or 60% of the lowest trade price ($0.0025) in the 25 trading days previous to the conversion. (In the event that Conversion Shares are not deliverable by DWAC, an additional 10% discount shall apply; if the shares are ineligible for deposit into the DTC system and only eligible for Xclearing deposit, an additional 5% discount shall apply; and in the case of both, an additional cumulative 15% discount shall apply.) | |||
Loss on conversion debt | $ 47,500 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details Narrative) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2016USD ($)$ / shares | Jun. 30, 2015USD ($)$ / shares | Jun. 30, 2016USD ($)$ / shares | Jun. 30, 2015USD ($)Number$ / shares | Dec. 31, 2014USD ($)Number | Dec. 31, 2015$ / shares | |
Dividend yield | 0.00% | |||||
Expected term | 11 months 16 days | |||||
Risk free interest rate | 0.56% | |||||
Volatility rate | 167.00% | |||||
Increase (decrease) in derivative liabilities | $ 54,765 | $ 189,660 | ||||
Number of shares issued for conversion | Number | 5,255,782 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ .001 | $ .001 | $ .001 | |||
Unrelated Note Holder [Member] | ||||||
Debt beneficial conversion feature | $ 64,920 | |||||
Number of shares issued for conversion | Number | 3,589,115 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||||
12% Convertible Promissory Note Due 2016-03-17 [Member] | ||||||
Number of draws | Number | 3 | |||||
Note face amount | $ 135,000 | |||||
Unamortized debt discount | $ 15,185 | |||||
Debt term | 24 months | |||||
Description of conversion terms | The conversion price is the lesser of $0.0485 or 60% of the lowest trading price in the 25 trading days prior the conversion. | |||||
Debt beneficial conversion feature | $ 230,408 | |||||
Dividend yield | 0.00% | |||||
Increase (decrease) in derivative liabilities | $ 189,660 | |||||
12% Convertible Promissory Note Due 2016-03-17 [Member] | Maximum [Member] | ||||||
Note face amount | $ 445,000 | |||||
Expected term | 2 years | |||||
Risk free interest rate | 0.58% | |||||
Volatility rate | 146.00% | |||||
12% Convertible Promissory Note Due 2016-03-17 [Member] | Minimum [Member] | ||||||
Expected term | 1 year 3 months | |||||
Risk free interest rate | 0.38% | |||||
Volatility rate | 97.34% | |||||
Convertible Debenture [Member] | ||||||
Unamortized debt discount | $ 135,000 | |||||
Derivative liabilities | $ 95,408 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) | 6 Months Ended | |
Jun. 30, 2016USD ($)shares | Jun. 30, 2015Number | |
Number of shares issued for conversion | 5,255,782 | |
Number of shares issued for settlement | shares | 597,545 | |
Accrued legal services | $ | $ 8,058 | |
Mr. Robert Gayman [Member] | ||
Number of shares issued for conversion | 1,666,667 | |
Unrelated Note Holder [Member] | ||
Number of shares issued for conversion | 3,589,115 |
Stock Based Compensation (Detai
Stock Based Compensation (Details Narrative) - USD ($) | May 24, 2016 | Jun. 30, 2016 | Oct. 31, 2015 |
Employees [Member] | |||
Compensation expense recognized in future periods | $ 26,000 | ||
Non Employees [Member] | |||
Compensation expense recognized in future periods | $ 13,000 | ||
2012 Equity Incentive Plan [Member] | |||
Number of options authorized | 666,667 | ||
Number of options to purchase | 418,333 | ||
Fair value of options | $ 39,000 | ||
2012 Equity Incentive Plan [Member] | Director [Member] | |||
Number of options to purchase | 15,000,000 | ||
Expiration term | 4 years | ||
Amended 2012 Equity Incentive Plan [Member] | |||
Number of options authorized | 20,000,000 |
Stock Based Compensation (Det34
Stock Based Compensation (Details) | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Expected life (in years) | 4 years |
Volatility | 383.00% |
Risk Free interest rate | 0.68% |
Dividend yield (on common stock) |
Stock Based Compensation (Det35
Stock Based Compensation (Details 1) | 6 Months Ended |
Jun. 30, 2016USD ($)$ / sharesshares | |
Employees [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding beginning | shares | 240,000 |
Granted | shares | 10,000,000 |
Exercised | shares | |
Cancelled | shares | 240,000 |
Outstanding ending | shares | 10,000,000 |
Exercisable ending | shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Outstanding beginning | $ 0.57 |
Granted | 0.0026 |
Exercised | |
Cancelled | 0.057 |
Outstanding ending | 0.0026 |
Exercisable ending | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term [Roll Forward] | |
Granted | 3 years 10 months 24 days |
Exercisable ending | 3 years 10 months 24 days |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Aggregate Intrinsic Value At Date Grant[Roll Forward] | |
Outstanding beginning | $ | |
Granted | |
Exercised | $ | |
Cancelled | |
Outstanding ending | $ | |
Exercisable ending | $ | |
Non Employees [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding beginning | shares | 375,000 |
Granted | shares | 5,000,000 |
Exercised | shares | |
Cancelled | shares | 375,000 |
Outstanding ending | shares | 5,000,000 |
Exercisable ending | shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Outstanding beginning | $ 0.87 |
Granted | 0.0026 |
Exercised | |
Cancelled | 0.87 |
Outstanding ending | 0.0026 |
Exercisable ending | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term [Roll Forward] | |
Granted | 3 years 10 months 24 days |
Exercisable ending | 3 years 10 months 24 days |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Aggregate Intrinsic Value At Date Grant[Roll Forward] | |
Outstanding beginning | $ | |
Granted | |
Exercised | $ | |
Cancelled | |
Outstanding ending | $ | |
Exercisable ending | $ |
Outstanding Warrants (Details)
Outstanding Warrants (Details) - 2012 Private Placement [Member] - Warrant [Member] | 6 Months Ended |
Jun. 30, 2016USD ($)$ / sharesshares | |
Number of warrants | shares | 400,000 |
Exercise price per share (in dollars per share) | $ / shares | $ 15 |
Average remaining term in years | 1 year 3 months |
Aggregate intrinsic value at date of grant | $ | |
Warrants expiration date | Sep. 20, 2017 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Current: | ||
Federal | ||
State | ||
Total current | ||
Deferred: | ||
Federal | (41,300) | (63,800) |
State | (6,700) | (10,300) |
Total deferred | (48,000) | (74,100) |
Increase in valuation allowance | 48,000 | 74,100 |
Total provision |
Income Taxes (Details 1)
Income Taxes (Details 1) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||
Income tax provision at the federal statutory rate | 34.00% | 34.00% |
State income taxes, net of federal benefit | 5.50% | 5.50% |
Increase in valuation allowance | (39.50%) | (39.50%) |
Effective income tax rate reconciliation | 0.00% | 0.00% |
Business Segments (Details Narr
Business Segments (Details Narrative) - Number | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Product Information [Line Items] | ||
Number of reportable segments | 2 | |
Revenue [Member] | ||
Product Information [Line Items] | ||
Percentage of customers accounted revenues | 10.00% | 10.00% |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Definitive Agreements (90-day Exclusive Right) [Member] - FemCap Inc [Member] | May 21, 2016USD ($)shares |
Agreement upfront fee | $ 200,000 |
Number of issued restricted common stock | shares | 1,000,000 |
Description of vesting period | One-third vesting on each one-year anniversary of the closing date based on the founders continued employment by us. |
Percentage of royalty fee | 5.00% |
Description of royalty payment | A 5% royalty on gross sales revenue from the sales of FemCap and FemmyCycle® products for a period of five years from the closing date. |
Minimum capital raising | $ 3,500,000 |