Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 20, 2016 | |
Document and Entity Information: | ||
Entity Registrant Name | AXIM BIOTECHNOLOGIES, INC. | |
Entity Trading Symbol | axim | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | false | |
Entity Central Index Key | 1,514,946 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 46,802,659 | |
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 | 2,016 | |
Document Fiscal Period Focus | Q2 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash | $ 18,612 | $ 134,170 |
Inventory | 231,704 | 200,784 |
Reservation fee deposit | 65,170 | 65,170 |
Prepaid expenses | 83,603 | 777,657 |
Loan receivable | 5,000 | 5,000 |
Total current assets | 404,089 | 1,182,781 |
Property and equipment, net of accumulated depreciation of $2,797 and $1,119, respectively. | 13,983 | 15,661 |
Other Assets: | ||
Acquired intangible asset - intellectual property licensing agreement, net | 63,167 | 63,167 |
Total other assets | 63,167 | 63,167 |
TOTAL ASSETS | 481,239 | 1,261,609 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 325,720 | 324,014 |
Due to shareholder | 5,000 | 5,000 |
Convertible loan | 0 | 50,000 |
Due to first insurance funding | 68,000 | 22,964 |
Due to related party | 1,515,910 | 1,085,910 |
Promissory note - related party (including accrued interest of $73,047 and $57,726 respectively) | 1,073,047 | 1,057,726 |
Total current liabilities | 2,987,677 | 2,545,614 |
Long-term liabilities: | ||
Convertible note payable | 45,000 | 0 |
Convertible note payable(including accrued interest of $0 and $11,197 respectively) | 265,490 | 411,197 |
Total long-term liabilities | 310,490 | 411,197 |
TOTAL LIABILITIES | 3,298,167 | 2,956,811 |
STOCKHOLDERS' DEFICIT | ||
Preferred stock, $0.0001 par value, 5,000,000 shares authorized; Series A Convertible Preferred stock, $0.0001 par value, 1,000,000 shares designated, -0- and 1,000,000 shares issued and outstanding; respectively | 0 | 100 |
Undesignated Preferred stock, $0.0001 par value, 4,000,000 shares authorized, 1,000,000 shares issued and outstanding | 100 | 100 |
Common stock, $0.0001 par value, 300,000,000 shares authorized 41,802,659 and 39,633,706 shares issued and outstanding, respectively; | 4,180 | 3,963 |
Additional paid in capital | 10,632,371 | 9,032,865 |
Common stock to be issued | 173,825 | 52,500 |
Accumulated deficit | (13,627,404) | (10,784,730) |
TOTAL STOCKHOLDERS' DEFICIT | (2,816,928) | (1,695,202) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 481,239 | $ 1,261,609 |
Consolidated Balance Sheets Par
Consolidated Balance Sheets Parentheticals - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
PARENTHETICALS | ||
Property & Equipment, accumulated depreciation | $ 2,797 | $ 1,119 |
Promissory note - related party , accrued interest | 73,047 | 57,726 |
Convertible note payable, accrued interest | $ 0 | $ 11,197 |
Preferred Stock, Par or Stated Value | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 |
Series A Convertible Preferred stock,Par or Stated Value | $ 0.0001 | $ 0.0001 |
Designated Preferred Stock Shares Authorized | 1,000,000 | 1,000,000 |
Designated Preferred Stock Shares Issued | 0 | 1,000,000 |
Designated Preferred Stock Shares Outstanding | 0 | 1,000,000 |
Undesignated Preferred stock, Par or Stated Value | $ 0.0001 | $ 0.0001 |
Undesignated Preferred stock Shares Authorized | 4,000,000 | 4,000,000 |
Undesignated Preferred stock,Shares Issued | 1,000,000 | 1,000,000 |
Undesignated Preferred stock,Shares Outstanding | 1,000,000 | 1,000,000 |
Common Stock, Par or Stated Value | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 300,000,000 | 300,000,000 |
Common Stock, Shares Issued | 41,802,659 | 39,633,706 |
Common Stock, Shares Outstanding | 41,802,659 | 39,633,706 |
Condensed Consolidated Statemen
Condensed Consolidated Statement of Operations (unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenue | ||||
Revenues | $ 11,241 | $ 12,112 | $ 25,246 | $ 12,112 |
Cost of goods sold | 12,082 | 0 | 27,296 | 0 |
Gross loss | (841) | 12,112 | (2,050) | 12,112 |
Expenses: | ||||
Research and development expenses | 45,049 | 251,025 | 76,229 | 373,927 |
Selling, general and administrative | 444,756 | 1,321,586 | 1,353,708 | 1,687,502 |
Depreciation | 839 | 0 | 1,678 | 0 |
Total operating expenses | 490,644 | 1,572,611 | 1,431,615 | 2,061,429 |
Loss from operations | (491,485) | (1,560,499) | (1,433,665) | (2,049,317) |
Other (Income) expenses: | ||||
Loss on extinguishment of debt | 1,385,000 | 0 | 1,385,000 | 0 |
Interest expense | 12,087 | 188 | 24,009 | 18,316 |
Total other income and Expense | 1,397,087 | 188 | 1,409,009 | 18,316 |
Loss before provision of income tax | (1,888,572) | (1,560,687) | (2,842,674) | (2,067,633) |
Provision for income tax | 0 | 0 | 0 | 0 |
NET LOSS | $ (1,888,572) | $ (1,560,687) | $ (2,842,674) | $ (2,067,633) |
Loss per common share - basic and diluted | $ (0.05) | $ (0.04) | $ (0.07) | $ (0.06) |
Weighted average common shares outstanding - basic and diluted | 39,762,659 | 36,290,915 | 39,736,261 | 34,662,306 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Stockholders' Deficit - 6 months ended Jun. 30, 2016 - USD ($) | Common Stock Shares | Common Stock Amount | Preferred Stock Shares | Preferred Stock Amount | Series A Convertible Shares | Series A ConvertiblePreferred Stock Amount | Common Stock to Be Issued | Additional Paid In Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2015 | 39,633,706 | 3,963 | 1,000,000 | 100 | 1,000,000 | 100 | 52,500 | 9,032,865 | (10,784,730) | (1,695,202) |
Common stock to be issued for officer's compensation. | 125,000 | 13 | (52,500) | 52,487 | ||||||
Common stock to be issued for officer's compensation; | 115,625 | 115,625 | ||||||||
Common stock issued for consulting services. | 3,953 | 3,123 | 3,123 | |||||||
Common stock issued for consulting services; | 58,200 | 58,200 | ||||||||
Common stock issued in exchange for debt | 2,040,000 | 204 | 158,796 | 159,000 | ||||||
Fair value of convertible note over the face value of note | $ 1,385,000 | $ 1,385,000 | ||||||||
Cancellation/Rescission of the Series "A" convertible preferred stock issued in 2015 | (1,000,000) | (100) | 100 | |||||||
Net Loss | $ (2,842,674) | $ (2,842,674) | ||||||||
Balance at. at Jun. 30, 2016 | 41,802,659 | 4,180 | 1,000,000 | 100 | 173,825 | 10,632,371 | (13,627,404) | (2,816,928) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (2,842,674) | $ (2,067,633) |
Loss from operations | (2,842,674) | (2,067,633) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation expense | 1,678 | 0 |
Amortization of prepaid services | 736,438 | 460,274 |
Loss on extinguishment of debt. | 1,385,000 | 0 |
Amortization of prepaid insurance | 42,616 | 73,493 |
Stock based compensation | 176,948 | 509,000 |
Inventory written off | 9,753 | 0 |
Change in operating assets and liabilities: | ||
Accounts payable and accrued expenses | 1,706 | 209,057 |
Accrued Interest payable | 23,614 | 17,618 |
Inventory | (40,673) | 0 |
Reservation fee Deposit | 0 | (61,605) |
Prepaid Insurance | (85,000) | (85,000) |
Change in due to related party | 0 | 301,240 |
Due to first insurance funding | 45,036 | 13,980 |
NET CASH USED IN OPERATING ACTIVITIES | (545,558) | (629,576) |
CASH FLOWS FROM INVESTING ACTIVITIES: | 0 | 0 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from due to related party | 430,000 | 0 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 430,000 | 0 |
NET CHANGE IN CASH | (115,558) | (629,576) |
CASH BALANCES | ||
Beginning of period | 134,170 | 661,128 |
End of period | 18,612 | 31,552 |
CASH PAID DURING THE PERIOD FOR: | ||
Interest | 302 | 698 |
Income taxes-net of tax refund | 0 | 651 |
SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING AND INVESTING TRANSACTIONS: | ||
Excess fair value of convertible note issued for prepaid services | 0 | 2,000,000 |
Convertible Note issued for services | 0 | 400,000 |
Acquisition of Intellectual property through subsidiary acquisition | 0 | 983,262 |
Common stock issued against common stock to be issued | 52,500 | 0 |
Common stock issued against conversion of debt | 159,000 | 0 |
Cancellation of Series A convertible preferred shares | $ 100 | $ 0 |
ORGANIZATION
ORGANIZATION | 6 Months Ended |
Jun. 30, 2016 | |
ORGANIZATION | |
ORGANIZATION | NOTE 1: ORGANIZATION The Company was originally incorporated in Nevada on November 18, 2010, as Axim International Inc. On July 24, 2014, the Company changed its name to AXIM Biotechnologies, Inc. to better reflect its business operations. The Companys principal executive office is located at 18 East 50th Street, 5th Floor, New York, NY 10022. On August 7, 2014, the Company formed a wholly owned Nevada subsidiary named Axim Holdings, Inc. This subsidiary will be used to help facilitate the anticipated activities planned by the Company. On May 11, 2015 the Company acquired a 100% interest in Can Chew License Company a Nevada incorporated licensing Company, through the exchange of 5,826,706 shares of its common stock. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2016 | |
BASIS OF PRESENTATION: | |
BASIS OF PRESENTATION | NOTE 2: BASIS OF PRESENTATION: The unaudited condensed consolidated financial statements of AXIM Biotechnologies, Inc. (formerly Axim International, Inc.) The following (a) balance sheets as of June 30, 2016 (unaudited) and December 31, 2015, which have been derived from audited financial statements, and (b) the unaudited interim statements of operations and cash flows of AXIM Biotechnologies, Inc. (the "Company") have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2016 are not necessarily indicative of results that may be expected for the year ending December 31, 2016. These unaudited financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2015 included in the Companys Annual Report on Form 10-K, filed with the Securities and Exchange Commission (SEC) on April 14, 2016. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2016 | |
SIGNIFICANT ACCOUNTING POLICIES: | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 3: SIGNIFICANT ACCOUNTING POLICIES Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenue and expenses during reporting periods. Actual results could differ from these estimates. Cash equivalents The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. Inventory Inventory consists of finished goods available for sale and raw materials owned by the Company and are stated at the lower of cost or market. During the three and six months ended June 30, 2016, the Company wrote off finished goods inventory worth $9,659 and $9,753; respectively. As of June 30, 2016 the finished goods inventory totaled $166,145 and the shelf life of the finished goods inventory is set to expire on April 6, 2017. As of June 30, 2016 the raw materials inventory totaled $65,559. Property and equipment Property and equipment are carried at cost less accumulated depreciation. Depreciation is computed using straight-line method over the estimated useful life. New assets and expenditures that extend the useful life of property or equipment are capitalized and depreciated. Expenditures for ordinary repairs and maintenance are charged to operations as incurred. For the three and six months ended June 30, 2016 the Company recorded $839 and $1,678; respectively, of depreciation expense. Intangible Assets As required by generally accepted accounting principles, trademarks and patents are not amortized since they have an indefinite life. Instead, they are tested annually for impairment. Intangible assets as of June 30, 2016 amounted to $63,167 net of accumulated impairment losses of $652,265. Revenue Recognition The Company recognizes revenue on four basic criteria that must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the fee is fixed or determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on managements judgments regarding the fixed nature of the fee charged for services rendered and products delivered and the collectability of those fees. Revenue is generally recognized upon shipment. Revenues from continuing operations recognized for the three months ended June 30, 2016 and 2015 amounted to $11,241 and $12,112, respectively. Revenues from continuing operations recognized for the six months ended June 30, 2016 and 2015 amounted to $25,246 and $12,112, respectively. Principles of consolidation The unaudited condensed consolidated financial statements include the accounts of Axim Biotechnologies, Inc. and its wholly owned subsidiaries Axim Holdings, Inc. and Can Chew License Company as of June 30, 2016 and 2015. All significant intercompany transactions and balances have been eliminated in consolidation. Fair value of financial instruments The Company follows paragraph 825-10-50-10 Fair Value Measurements and Disclosures of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification ("Paragraph 820-10-35-37") to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value, and expands disclosures about fair value measurements. Income taxes The Company follows Section 740-10, Income tax (ASC 740-10) Fair Value Measurements and Disclosures of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Operations in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that the Company believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including reversals of any existing taxable temporary differences, projected future taxable income, tax planning strategies, and the results of recent operations. If the Company determines that it would be able to realize a deferred tax asset in the future in excess of any recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company adopted section 740-10-25 of the FASB Accounting Standards Codification ("Section 740-10-25"). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25. Concentrations of Credit Risk Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents. The Company places its cash and temporary cash investments with credit quality institutions. At times, such amounts may be in excess of the FDIC insurance limit. The Company does not have accounts receivable and allowance for doubtful accounts at June 30, 2016 and December 31, 2015. Net loss per common share Net loss per common share is computed pursuant to section 260-10-45 Earnings Per Share (ASC 260-10) of the FASB Accounting Standards Codification. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding and the member potentially outstanding during each period. In periods when a net loss is experienced, only basic net loss per share is calculated because to do otherwise would be anti-dilutive. There were 41,802,659 common share equivalents at June 30, 2016 and 39,364,706 at June 30, 2015. For the three and six months ended June 30, 2016 and 2015 these potential shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would reduce net loss per share. Stock Based Compensation All stock-based payments to employees and to nonemployee directors for their services as directors, including any grants of restricted stock and stock options, are measured at fair value on the grant date and recognized in the statements of operations as compensation or other expense over the relevant service period. Stock-based payments to nonemployees are recognized as an expense over the period of performance. Such payments are measured at fair value at the earlier of the date a performance commitment is reached or the date performance is completed. In addition, for awards that vest immediately and are non-forfeitable the measurement date is the date the award is issued. Cost of Sales Cost of sales includes the purchase cost of products sold and all costs associated with getting the products to the customers including buying and transportation costs. Research and Development The Company accounts for research and development costs in accordance with the Accounting Standards Codification subtopic 730-10, Research and Development (ASC 730-10). Under ASC 730-10, all research and development costs must be charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and development costs are expensed when the contracted work has been performed or as milestone results have been achieved. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred. The Company incurred research and development expenses of $76,229 and $373,927 for the six months ended June 30, 2016 and 2015. The Company incurred research and development expenses of $45,049 and $251,025 for the three months ended June 30, 2016 and 2015. Shipping Costs Shipping and handling costs billed to customers are recorded in sales. Shipping costs incurred by the company are recorded in general and administrative expenses. Recently issued accounting standards In April 2016, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) ASU 2016 10 Revenue from Contract with Customers: identifying Performance Obligations and Licensing. The amendments in this Update clarify the two following aspects (a) contracts with customers to transfer goods and services in exchange for consideration and (b) determining whether an entitys promise to grant a license provides a customer with either a right to use the entitys intellectual property (which is satisfied at a point in time) or a right to access the entitys intellectual property (which is satisfied over time). The amendments in this Update are intended to reduce the degree of judgment necessary to comply with Topic 606. This guidance has no effective date as yet. The Company is currently evaluating the impact of adopting this guidance. In March 2016, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) ASU 2016 09 Improvements to Employee Share-Based Payment Accounting which is intended to improve the accounting for employee share-based payments. The ASU simplifies several aspects of the accounting for share-based payment award transactions, including; the income tax consequences, classification of awards as either equity or liabilities, and the classification on the statement of cash flows. The new standard is effective for fiscal years and interim periods beginning after December 15, 2016, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance. In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, which amends the guidance in U.S. GAAP on accounting for operating leases, a lessee will be required to recognize assets and liabilities for operating leases with lease terms of more than 12 months on the balance sheet. The new standard is effective for fiscal years and interim periods beginning after December 15, 2018, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted. The Company is currently evaluating the impact of adopting this guidance. In January 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-01, which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Changes to the current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Company is currently evaluating the impact of adopting this guidance. The amendments also clarify that the guidance in Topic 275, Risks and Uncertainties, is applicable to entities that have not commenced planned principal operations. Other recent accounting pronouncements issued by the FASB and the SEC did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements |
PREPAID EXPENSES
PREPAID EXPENSES | 6 Months Ended |
Jun. 30, 2016 | |
PREPAID EXPENSES | |
PREPAID EXPENSES | NOTE 4: PREPAID EXPENSES Prepaid expenses consist of the following as of June 30, 2016 and December 31, 2015: June 30, 2016 December 31, 2015 Prepaid service contract $ - $ 736,438 Prepaid insurance contract 83,603 41,219 $ 83,603 $ 777,657 For the three months ended June 30, 2016 and 2015 the Company recognized amortization expense of $159,506 and $497,260, respectively. For the six months ended June 30, 2016 and 2015 the Company recognized amortization expense of $779,054 and $533,767, respectively. |
RESERVATION FEE DEPOSIT
RESERVATION FEE DEPOSIT | 6 Months Ended |
Jun. 30, 2016 | |
RESERVATION FEE DEPOSIT | |
RESERVATION FEE DEPOSIT | NOTE 5: RESERVATION FEE DEPOSIT The Company entered into a reservation agreement with the Municipality of Almere in the Netherlands. In October 2015 the Company paid the reservation fee in the amount of $65,170.The reservation fee deposit gives the company an exclusive right to purchase the building land for a purchase price of 1,110,000. Starting in October 2015 the second reservation period was extended for a period of twelve (12) months expiring September 2016.If the company proceeds to purchase the building land the reservation fee will be offset against the purchase price. The Company is not entitled to a refund of the reservation fee if the current agreement is terminated by the Company in the event of insolvency or a moratorium on the transfer or assignment of rights or in the event of a failure to notify or notify on time. The agreement is not transferable. The rights and obligations of this agreement cannot be assigned. The municipality is entitled to terminate the agreement by means of a registered letter if during the reservation period compelling objections exist or arise, or through the insolvency of the Company. |
PROMISSORY NOTE - RELATED PARTY
PROMISSORY NOTE - RELATED PARTY | 6 Months Ended |
Jun. 30, 2016 | |
PROMISSORY NOTE - RELATED PARTY | |
PROMISSORY NOTE - RELATED PARTY | NOTE 6: PROMISSORY NOTE - RELATED PARTY On August 8, 2014 the Company entered into a Promissory Note Agreement with CanChew Biotechnologies, LLC (CCB), a related party (the owners of CCB also own a majority of the outstanding shares of the Company), under which it borrowed $1,000,000 to fund working capital. The original loan was a demand note bearing interest at the rate of 7% per annum, which amount, along with principal, was payable upon demand. The demand note was amended effective January 1, 2015 to reduce the annual interest rate to 3%. All other terms and conditions shall remain in full force and effect. The Company is in discussions to have the demand note modified or exchanged for a longer term, fixed maturity note. The following table summarizes promissory note payable as of June 30, 2016 and December 31, 2015: June 30, 2016 December 31, 2015 Promissory note payable, due on demand, interest at 3% and 7%, respectively. $ 1,000,000 $ 1,000,000 Accrued interest 73,047 57,726 $ 1,073,047 $ 1,057,726 For the three months ended June 30, 2016 and 2015 the Company recognized interest expense of $7,704 and $(2,950), respectively. For the six months ended June 30, 2016 and 2015 the Company recognized interest expense of $15,321 and $14,550, respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2016 | |
RELATED PARTY TRANSACTIONS: | |
RELATED PARTY TRANSACTIONS | NOTE 7: RELATED PARTY TRANSACTIONS The Company has received working capital advances from CCB and Maxillofacial totaling $1,515,910 as of June 30, 2016, which includes $430,000 received during the six-month period ended June 30, 2016. The advances currently bear no interest and are payable on demand. The Company is in discussions to have the advances reduced to a longer term, fixed maturity note. The Company owes $5,000 to the president of the Company for a working capital advance of $5,000 made in May of 2014. |
DUE TO FIRST INSURANCE FUNDING
DUE TO FIRST INSURANCE FUNDING | 6 Months Ended |
Jun. 30, 2016 | |
DUE TO FIRST INSURANCE FUNDING | |
DUE TO FIRST INSURANCE FUNDING | NOTE 8: DUE TO FIRST INSURANCE FUNDING The Company owes $68,000 to First Insurance Funding for financing of its D&O insurance policy. Under the terms of the insurance financing, payments of $7,730, which include interest at the rate of 5.5% per annum, are due each month for nine months commencing on July 25, 2016. The total outstanding due to First Insurance Funding as of June 30, 2016 and December 31, 2015 is $68,000 and $22,964; respectively. |
CONVERTIBLE NOTE PAYABLE
CONVERTIBLE NOTE PAYABLE | 6 Months Ended |
Jun. 30, 2016 | |
CONVERTIBLE NOTE PAYABLE | |
CONVERTIBLE NOTE PAYABLE | NOTE 9: CONVERTIBLE NOTES PAYABLE On June 29, 2016 the Company entered into a Debt Exchange Agreement whereby it exchanged a convertible loan payable having a balance due of $50,000 as of December 31, 2015, which was convertible into the Company's common stock at a conversion price of $0.10 per share, interest free and had been in default for over four years, for a long-term convertible note in the amount of $50,000. The new Convertible Note bears interest at the rate of 3.5% per annum, payable annually beginning on July 1, 2017, and matures on July 1, 2028. The Note is convertible, in whole or in part at any time at the option of the holder, into the Company's common stock at a conversion price of $0.01, provided however, the holder of the Note is not permitted to convert an amount of the Note that would result in the holder and its affiliates owning more than 4.9% of the Company's outstanding common stock. The Company determined fair value of new debt $1,435,000 and as a result was recorded $1,385,000 as a loss on debt extinguishment during the period ended June 30, 2016. On June 30, 2016 the holder of the Note converted $5,000 face value into 500,000 shares of the Company's common stock. The balance on the Note as of June 30, 2016 is $45,000, including interest accrued thereon of $0 The Company has outstanding convertible note payable having a balance due of $265,490 and $400,000 as of June 30, 2016 and December 31, 2015 respectively. The Note bears interest at the rate of 4% per annum which accrues until maturity at April 21, 2025. The Note was issued in April of 2015 to a third-party as a non-refundable payment for consultancy services to be provided to the Company for a period of at least one year. The Note is convertible, in whole or in part at any time at the option of the holder, into "S-8" shares of the Company's common stock at a conversion price of $0.10, provided however, the holder of the Note is not permitted to convert an amount of the Note that would result in the holder and its affiliates owning more than 4.9% of the Company's outstanding common stock. On June 30, 2016 the holder of the Note converted $154,000 due under the Note, including interest of $19,490, into 1,540,000 S-8 shares of the Company's common stock. The balance on the Note as of June 30, 2016 is $265,490, including interest accrued thereon of $0. |
STOCK INCENTIVE PLAN
STOCK INCENTIVE PLAN | 6 Months Ended |
Jun. 30, 2016 | |
STOCK INCENTIVE PLAN: | |
STOCK INCENTIVE PLAN | NOTE 10: STOCK INCENTIVE PLAN On May 29, 2015 the Company adopted its 2015 Stock Incentive Plan. Under the Plan the Company may issue up to 10,000,000 S-8 shares to officers, employees, directors or consultants for services rendered to the Company or its affiliates or to incentivize such parties to continue to render services. S-8 shares are registered immediately upon the filing of the Plan and are unrestricted shares that are free-trading upon issuance. There were 8,460,000 and 10,000,000 shares available for issuance under the Plan as of June 30, 2016 and December 31, 2015 respectively. |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 6 Months Ended |
Jun. 30, 2016 | |
STOCKHOLDERS' DEFICIT {1} | |
STOCKHOLDERS' DEFICIT | NOTE 11: STOCKHOLDERS DEFICIT Preferred Stock The Company has authorized 5,000,000 shares of preferred stock, with a par value of $0.0001 per share. Of the 5,000,000 authorized preferred shares, 4,000,000 are undesignated "blank check" preferred stock. The Company may issue such preferred shares and designate the rights, privileges and preferences of such shares at the time of designation and issuance. As of June 30, 2016 and December 31, 2015 there are 4,000,000 shares of undesignated preferred shares issued and outstanding. Series A Convertible Preferred Stock The Company has designated authorized 1,000,000 shares of Series A Convertible Preferred Stock, which had been previously issued to Sanammad Foundation and subsequently assigned and transferred by Sanammad to Treo Holdings, LLC ("Treo"). On June 28, 2016 the Company, Sanammad and Treo agreed that the issuance of the Series A Convertible Preferred be rescinded and that such share issuance be cancelled. The Company accounted this cancelation of preferred stock as equity transaction and accordingly the par value of preferred stock adjusted against additional paid in capital account. Each share of the Series A Convertible Preferred Stock is convertible into five (5) shares of the Company's common stock at any time at the discretion of the holder. The Series A Convertible Preferred Stock provides for a liquidation preference as follows; In the event of any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary (a "Liquidation"), the assets of the Company available for distribution to its stockholders shall be distributed as follows. The holders of the Series A Convertible Preferred Stock shall be entitled to receive, prior to the holders of the other series of preferred stock, if any, and prior and in preference to any distribution of the assets or surplus funds of the Company to the holders of any other shares of stock of the Company by reason of their ownership of such stock: (i) all shares of common stock of any subsidiary of the Company which are held by the Company: and (ii) an amount equal to $1.00 per share with respect to each share of Series A Convertible Preferred stock, plus all declared but unpaid dividends with respect to such share. The Series A Convertible Preferred Stock also contains super-majority voting rights and a number of protective covenants. As of June 30, 2016 and December 31, 2015 there are 0 and 1,000,000 Series A Convertible Preferred shares issued and outstanding; respectively. Common Stock The Company has authorized 300,000,000 shares of common stock, with a par value of $0.0001 per share. As of June 30, 2016 and December 31, 2015, the Company had 41,802,659 and 39,633,706 shares of common stock issued and outstanding, respectively. On June 13, 2014, the Company entered into an employment agreement with Dr. George Anastassov, its Chief Executive Officer, Chief Financial Officer and Secretary. On September 13, 2015 following fifteen (15) months of continuous employment, and every three months thereafter, the Company was obligated to issue 125,000 restricted shares of the Companys common stock based upon the average ten (10) day closing price immediately preceding the grant date, as quoted on Yahoo.com. During the period ended March 31, 2016, the Company issued 125,000 shares of common stock towards common stock to be issued against expenses incurred worth $52,500 in prior year. On March 13, 2016 and June 13, 2016, the Company was obligated to issue 125,000 restricted shares; respectively, of the Companys common stock based upon the average ten (10) day closing price immediately preceding the grant date, as quoted on Yahoo.com. As of June 30, 2016, the Company have not issues these shares. During the three and six months ended June 30, 2016 the Company accrued $67,375 and $48,250; respectively, of compensation expense in the accompanying unaudited condensed consolidated financial statements, to record for the required issuance of the incentive shares. On January 1, 2016, the Company entered into an employment agreement with Mr. Lekhram Changoer, its Chief Technology Officer. The agreement has an initial term of one-year and renews each year until terminated by the Company or Mr. Changoer. Under the agreement Mr. Changoer receives an annual base compensation of $126,000 and quarterly incentive payments of either 120,000 shares of the Company's common stock or, in the discretion of the Company, an amount of cash equal to the fair market value of 120,000 shares of stock. On April 1, 2016 the Company was obligated to issue 120,000 restricted shares of the Companys common stock pursuant to the terms of the employment agreement. As of June 30, 2016 the Company accrued $58,200 of compensation expense in the accompanying unaudited condensed consolidated financial statements to account for the required issuance of the incentive shares. On March 17, 2016, the Company issued 3,953 restricted shares of common stock as payment for consultant services performed for the Company. The Company recorded $3,123 of compensation expense in the accompanying unaudited condensed consolidated financial statements as a result of the issuance. On June 30, 2016 the Company issued 500,000 restricted shares of its common stock in exchange for the conversion of $5,000 of a convertible note payable, On June 30, 2016 the Company issued 1,540,000 unrestricted S-8 shares in exchange for the conversion of $134,510 of a convertible note payable and $19,490 of accrued interest. |
COMMITMENT AND CONTINGENCIES
COMMITMENT AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2016 | |
COMMITMENT AND CONTINGENCIES | |
COMMITMENT AND CONTINGENCIES | NOTE 12: COMMITMENT AND CONTINGENCIES On June 13, 2014, the Company entered into an employment agreement with Dr. George Anastassov, its Chief Executive Officer. The agreement has an initial term of one-year and renews each year until terminated by the Company or Dr. Anastassov. Under the agreement Dr. Anastassov receives an annual base compensation of $240,000 and received a one-time incentive payment of 500,000 restricted shares of the Company's common stock (after one-year of continuous employment) and thereafter is entitled to quarterly incentive payments of either 125,000 shares of the Company's common stock or, in the discretion of the Company, an amount of cash equal to the fair market value of 125,000 shares of stock. On March 13, 2016 and June 13, 2016 the Company was obligated to issue 125,000 restricted shares, respectively, of the Companys common stock pursuant to the terms of the employment agreement. As of June 30, 2016 the Company accrued $115,625 of compensation expense in the accompanying unaudited condensed consolidated financial statements to account for the required issuance of the incentive shares. On January 1, 2016, the Company entered into an employment agreement with Mr. Lekhram Changoer, its Chief Technology Officer. The agreement has an initial term of one-year and renews each year until terminated by the Company or Mr. Changoer. Under the agreement Mr. Changoer receives an annual base compensation of $126,000 and quarterly incentive payments of either 120,000 shares of the Company's common stock or, in the discretion of the Company, an amount of cash equal to the fair market value of 120,000 shares of stock. On April 1, 2016 the Company was obligated to issue 120,000 restricted shares of the Companys common stock pursuant to the terms of the employment agreement. As of June 30, 2016 the Company accrued $58,200 of compensation expense in the accompanying unaudited condensed consolidated financial statements to account for the required issuance of the incentive shares. The Company entered into a reservation agreement with the Municipality of Almere in the Netherlands. In October 2015 the Company paid the reservation fee in the amount of $65,170.The reservation fee deposit gives the company an exclusive right to purchase the building land for a purchase price of 1,110,000. Starting in October 2015 the second reservation period was extended for a period of twelve (12) months expiring September 2016. The Company does not have the ability to acquire the land prior to the expiration of the extended reservation term. Therefore the Company intends to seek another extension of the reservation period, however, there can be no assurance that the municipality will agree to such an extension in which case the reservation fee would be forfeited. |
GOING CONCERN
GOING CONCERN | 6 Months Ended |
Jun. 30, 2016 | |
GOING CONCERN: | |
GOING CONCERN | NOTE 13; GOING CONCERN The Companys unaudited condensed consolidated financial statements have been presented assuming that the Company will continue as a going concern. As shown in the unaudited condensed consolidated financial statements, the Company has negative working capital of $2,583,588, has an accumulated deficit of $13,627,404, has cash used in operating activities of continuing operations $545,558 and presently does not have the resources to accomplish its objectives during the next twelve months. These conditions raise substantial doubt about the ability of the Company to continue as a going concern. The unaudited condensed consolidated The Company intends to raise additional capital through private placements of debt and equity securities, but there can be no assurance that these funds will be available on terms acceptable to the Company, or will be sufficient to enable the Company to fully complete its development activities or sustain operations. If the Company is unable to raise sufficient additional funds, it will have to develop and implement a plan to further extend payables, reduce overhead, or scale back its current business plan until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 6 Months Ended |
Jun. 30, 2016 | |
SUBSEQUENT EVENT | |
SUBSEQUENT EVENT | NOTE 14: SUBSEQUENT EVENTS On August 15, 2016 the Company issued 1 ,000,000 shares of its Series A Convertible Preferred Stock in exchange for 1,000,000 shares of its Undesignated Preferred Stock (see Footnote 10 - "Preferred Stock" for a discussion of the Company's preferred stock). The Undesignated Preferred Stock was held by Sanammad Foundation and MJNA Investment Holdings, LLC (500,000 shares each), which parties together own a majority of the common stock of the Company. Under the terms of the exchange, the 1,000,000 shares of Series A Convertible Preferred received in the exchange were immediately converted into 5,000,000 restricted shares of the Company's common stock (2,500,000 shares for each of Sanammad Foundation and MJNA Investment Holdings, LLC). As a result, the Series A Convertible Preferred Stock is retired and no longer available for future issuance. The three members of the Sanammad Foundation also serve as the current three directors of the Company and Sanammad, along with MJNA Investment Holdings, LLC, hold a majority of the outstanding stock of the Company On August 17, 2016 the Company designated up to 500,000 shares of a new Series B Convertible Preferred Stock. The holders of the Series B Preferred are entitled to elect three members to the Company's board of directors and are entitled to cast 100 votes per share on all other matters presented to the shareholders for a vote. Each share of Series B Convertible Preferred is convertible into one share of the Company's common stock. The Series B Convertible Preferred designation contains a number of protective and restrictive covenants that restrict the Company from taking a number of actions without the prior approval of the holders of the Series B Preferred or the unanimous vote of all three Series B Directors. On August 17, 2016 the Company designated up to 500,000 shares of a new Series C Convertible Preferred Stock. The holders of the Series C Preferred are entitled to elect four members to the Company's board of directors and are entitled to cast 100 votes per share on all other matters presented to the shareholders for a vote. Each share of Series C Convertible Preferred is convertible into one share of the Company's common stock. The Series C Convertible Preferred designation contains a number of protective and restrictive covenants that restrict the Company from taking a number of actions without the prior approval of the holders of the Series C Preferred or the unanimous vote of all four Series C Directors. If at any time there are four Series C Directors, one such director must be independent as that term is defined in the Series C designation. Any challenge to the independence of a Series C Director is a right conferred only upon the holders of the Series B Convertible Preferred Stock and may only be made by the holders of the Series B Convertible Preferred Stock. On August 17, 2016 the Company amended its Bylaws to achieve the following: (i) to fix the number of authorized directors at seven (7), comprised of three (3) seats authorized for Series B Directors and four (4) seats authorized for Series C Directors, (ii) ) to set forth that upon there being four Series C Directors, one such director shall be independent as such term is defined in the certificate of designation for the Series C Convertible Preferred Stock and to set forth that the term, conditions and procedures for electing, determining and challenging such director independence are governed by the certificate of designation for the Series C Convertible Preferred Stock, (iii) to set forth that the holders of the Series B Convertible Preferred Stock and the holders of the Series C Convertible Preferred Stock have the right at any time without a meeting and without prior notice to elect their respective Series B and Series C Directors, (iv) that the holders of two-thirds (2/3) of the Series B or Series C Convertible Preferred Stock have the right at any time without a meeting and without prior notice to remove their respective Series B and Series C Directors, (v) to reduce the number of directors needed to constitute a quorum to a majority of the directors then in office, (vi) to subject the right of the board of directors to form a committee to the rights of the holders of the Series B and Series C Convertible Preferred Stock (and to eliminate any committee related provision that might conflict with the rights of the Series B and Series C holders), and (vii) to clarify and set forth that neither the stockholders (other than the holders of the Series B and Series C Convertible Preferred Stock) nor the board of directors has the right to repeal, amend or adopt bylaws without the prior consent of the holders of both the Series B Convertible Preferred Stock and the holders of the Series C Convertible Preferred Stock. On August 18, 2016 the Company issued all 500,000 shares of its newly designated Series B Preferred Stock to Sanammad Foundation in exchange for cash of $50,000. As the holders of the Series B Preferred Stock, Sanammad has designated the current directors, Dr. George E. Anastassov, Dr. Philip A. Van Damme and Mr. Lekhram Changoer as their three Series B Directors. On August 18, 2016 the Company issued all 500,000 shares of its newly designated Series C Preferred Stock to MJNA Investment Holdings, LLC in exchange for cash of $65,000. At this time the holders of the Series C Preferred Stock have decided not to elect any Series C Directors. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies: | |
Use of Estimates, Policy | Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenue and expenses during reporting periods. Actual results could differ from these estimates. |
Cash Equivalents, Policy | Cash equivalents The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. |
Inventory, Policy | Inventory Inventory consists of finished goods available for sale and raw materials owned by the Company and are stated at the lower of cost or market. During the three and six months ended June 30, 2016, the Company wrote off finished goods inventory worth $9,659 and $9,753; respectively. As of June 30, 2016 the finished goods inventory totaled $166,145 and the shelf life of the finished goods inventory is set to expire on April 6, 2017. As of June 30, 2016 the raw materials inventory totaled $65,559. |
Property and equipment | Property and equipment Property and equipment are carried at cost less accumulated depreciation. Depreciation is computed using straight-line method over the estimated useful life. New assets and expenditures that extend the useful life of property or equipment are capitalized and depreciated. Expenditures for ordinary repairs and maintenance are charged to operations as incurred. For the three and six months ended June 30, 2016 the Company recorded $839 and $1,678; respectively, of depreciation expense. |
Intangible Assets, Policy | Intangible Assets As required by generally accepted accounting principles, trademarks and patents are not amortized since they have an indefinite life. Instead, they are tested annually for impairment. Intangible assets as of June 30, 2016 amounted to $63,167 net of accumulated impairment losses of $652,265. |
Revenue Recognition, Policy | Revenue Recognition The Company recognizes revenue on four basic criteria that must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the fee is fixed or determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on managements judgments regarding the fixed nature of the fee charged for services rendered and products delivered and the collectability of those fees. Revenue is generally recognized upon shipment. Revenues from continuing operations recognized for the three months ended June 30, 2016 and 2015 amounted to $11,241 and $12,112, respectively. Revenues from continuing operations recognized for the six months ended June 30, 2016 and 2015 amounted to $25,246 and $12,112, respectively. |
Principles of consolidation | Principles of consolidation The unaudited condensed consolidated financial statements include the accounts of Axim Biotechnologies, Inc. and its wholly owned subsidiaries Axim Holdings, Inc. and Can Chew License Company as of June 30, 2016 and 2015. All significant intercompany transactions and balances have been eliminated in consolidation. |
Fair Value of Financial Instruments, Policy | Fair value of financial instruments The Company follows paragraph 825-10-50-10 Fair Value Measurements and Disclosures of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification ("Paragraph 820-10-35-37") to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value, and expands disclosures about fair value measurements. |
Income Taxes, Policy | Income taxes The Company follows Section 740-10, Income tax (ASC 740-10) Fair Value Measurements and Disclosures of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Operations in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that the Company believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including reversals of any existing taxable temporary differences, projected future taxable income, tax planning strategies, and the results of recent operations. If the Company determines that it would be able to realize a deferred tax asset in the future in excess of any recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company adopted section 740-10-25 of the FASB Accounting Standards Codification ("Section 740-10-25"). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents. The Company places its cash and temporary cash investments with credit quality institutions. At times, such amounts may be in excess of the FDIC insurance limit. The Company does not have accounts receivable and allowance for doubtful accounts at June 30, 2016 and December 31, 2015. |
Net loss per common share | Net loss per common share Net loss per common share is computed pursuant to section 260-10-45 Earnings Per Share (ASC 260-10) of the FASB Accounting Standards Codification. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding and the member potentially outstanding during each period. In periods when a net loss is experienced, only basic net loss per share is calculated because to do otherwise would be anti-dilutive. There were 41,802,659 common share equivalents at June 30, 2016 and 39,364,706 at June 30, 2015. For the three and six months ended June 30, 2016 and 2015 these potential shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would reduce net loss per share. |
Stock Based Compensation | Stock Based Compensation All stock-based payments to employees and to nonemployee directors for their services as directors, including any grants of restricted stock and stock options, are measured at fair value on the grant date and recognized in the statements of operations as compensation or other expense over the relevant service period. Stock-based payments to nonemployees are recognized as an expense over the period of performance. Such payments are measured at fair value at the earlier of the date a performance commitment is reached or the date performance is completed. In addition, for awards that vest immediately and are non-forfeitable the measurement date is the date the award is issued. |
Cost of Sales, Policy | Cost of Sales Cost of sales includes the purchase cost of products sold and all costs associated with getting the products to the customers including buying and transportation costs. |
Research and Development | Research and Development The Company accounts for research and development costs in accordance with the Accounting Standards Codification subtopic 730-10, Research and Development (ASC 730-10). Under ASC 730-10, all research and development costs must be charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and development costs are expensed when the contracted work has been performed or as milestone results have been achieved. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred. The Company incurred research and development expenses of $76,229 and $373,927 for the six months ended June 30, 2016 and 2015. The Company incurred research and development expenses of $45,049 and $251,025 for the three months ended June 30, 2016 and 2015. |
Shipping Costs | Shipping Costs Shipping and handling costs billed to customers are recorded in sales. Shipping costs incurred by the company are recorded in general and administrative expenses. |
Recently issued accounting standards | Recently issued accounting standards In April 2016, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) ASU 2016 10 Revenue from Contract with Customers: identifying Performance Obligations and Licensing. The amendments in this Update clarify the two following aspects (a) contracts with customers to transfer goods and services in exchange for consideration and (b) determining whether an entitys promise to grant a license provides a customer with either a right to use the entitys intellectual property (which is satisfied at a point in time) or a right to access the entitys intellectual property (which is satisfied over time). The amendments in this Update are intended to reduce the degree of judgment necessary to comply with Topic 606. This guidance has no effective date as yet. The Company is currently evaluating the impact of adopting this guidance. In March 2016, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) ASU 2016 09 Improvements to Employee Share-Based Payment Accounting which is intended to improve the accounting for employee share-based payments. The ASU simplifies several aspects of the accounting for share-based payment award transactions, including; the income tax consequences, classification of awards as either equity or liabilities, and the classification on the statement of cash flows. The new standard is effective for fiscal years and interim periods beginning after December 15, 2016, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance. In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, which amends the guidance in U.S. GAAP on accounting for operating leases, a lessee will be required to recognize assets and liabilities for operating leases with lease terms of more than 12 months on the balance sheet. The new standard is effective for fiscal years and interim periods beginning after December 15, 2018, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted. The Company is currently evaluating the impact of adopting this guidance. In January 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-01, which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Changes to the current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Company is currently evaluating the impact of adopting this guidance. The amendments also clarify that the guidance in Topic 275, Risks and Uncertainties, is applicable to entities that have not commenced planned principal operations. Other recent accounting pronouncements issued by the FASB and the SEC did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements |
PREPAID EXPENSES (TABLES)
PREPAID EXPENSES (TABLES) | 6 Months Ended |
Jun. 30, 2016 | |
PREPAID EXPENSES (TABLES): | |
PREPAID EXPENSES (TABLES) | Prepaid expenses consist of the following as of June 30, 2016 and December 31, 2015: June 30, 2016 December 31, 2015 Prepaid service contract $ - $ 736,438 Prepaid insurance contract 83,603 41,219 $ 83,603 $ 777,657 |
Schedule of Summary of Promisso
Schedule of Summary of Promissory Notes Payable (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Schedule of Summary of Promissory Notes Payable: | |
Schedule of Summary of Promissory Notes Payable | The following table summarizes promissory note payable as of June 30, 2016 and December 31, 2015: June 30, 2016 December 31, 2015 Promissory note payable, due on demand, interest at 3% and 7%, respectively. $ 1,000,000 $ 1,000,000 Accrued interest 73,047 57,726 $ 1,073,047 $ 1,057,726 |
ORGANIZATION (Details)
ORGANIZATION (Details) | May 11, 2015shares |
ORGANIZATION Details | |
Acquired interest in Can Chew License Company | 100.00% |
Acquired interest in Can Chew License Company through the exchange of shares of common stock | 5,826,706 |
SIGNIFICANT ACCOUNTING POLICI25
SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Inventory {2} | ||||
Company written off inventory | $ 9,659 | $ 9,753 | ||
Inventory totaled | 166,145 | |||
Raw materials invent totaled | 65,559 | |||
Depreciation Details | ||||
Depreciation expense | 839 | 1,678 | ||
Intangible Assets Details | ||||
Impairment loss | 652,265 | |||
Intangible assets | 63,167 | |||
Revenue Recognition | ||||
Revenues from continuing operations recognized | $ 11,241 | $ 12,112 | $ 25,246 | $ 12,112 |
Net loss per common share | ||||
Potential shares were excluded from the shares used to calculate diluted earnings per share . | 41,802,659 | 39,364,706 | 41,802,659 | 39,364,706 |
Research and Development | ||||
The Company incurred research and development expenses | $ 45,049 | $ 251,025 | $ 76,229 | $ 7,927 |
Prepaid expenses consist of the
Prepaid expenses consist of the following (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Prepaid expenses consist of the following | ||
Prepaid service contract | $ 0 | $ 736,438 |
Prepaid insurance contract | 83,603 | 41,219 |
Total prepaid expense | $ 83,603 | $ 777,657 |
Amortization expense (Details)
Amortization expense (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Amortization expense Details | ||||
Company recognized amortization expense | $ 159,506 | $ 497,260 | $ 779,054 | $ 533,767 |
RESERVATION FEE DEPOSIT (Detail
RESERVATION FEE DEPOSIT (Details) | Oct. 31, 2015USD ($) |
RESERVATION FEE DEPOSIT Details | |
Company paid the reservation fee | $ 65,170 |
Building and land purchase price in Euro(€) | $ 1,110,000 |
RELATED PARTY PROMISSORY NOTE (
RELATED PARTY PROMISSORY NOTE (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 | Jan. 02, 2015 | Aug. 08, 2014 |
Related party Promissory note | ||||
Promissory note payable, due on demand, interest at 3% and 7%, respectively | $ 1,000,000 | $ 1,000,000 | ||
Accrued interest on note | 73,047 | 57,726 | ||
Total amount of note payable | $ 1,073,047 | $ 1,057,726 | ||
Working capital fund | $ 1,000,000 | |||
Interest rate annually | 7.00% | |||
Reduced Annual interest rate | 3.00% |
Interest Expense ( Details)
Interest Expense ( Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Interest Expense Details | ||||
Company recognized interest expense | $ 7,704 | $ (2,950) | $ 15,321 | $ 14,550 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | Jun. 30, 2016 | May 31, 2014 |
RELATED PARTY TRANSACTIONS Details | ||
Company has received working capital advances from CCB and Maxillofacial totaling (included an amount of 430,000) | $ 1,515,910 | |
The Company owes to the president | $ 5,000 | |
Working capital advance made | $ 5,000 |
INSURANCE FUNDING (Details)
INSURANCE FUNDING (Details) - USD ($) | Jul. 25, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
iNSURANCE FUNDING Details | |||
The Company owes to First Insurance Funding for financing of its D&O insurance policy | $ 68,000 | ||
Under the terms of the insurance financing, payments | $ 7,730 | ||
Insurance funding interest rate | 5.50% | ||
The total outstanding due to First Insurance Funding | $ 68,000 | $ 22,964 |
CONVERTIBLE NOTES PAYABLE (Deta
CONVERTIBLE NOTES PAYABLE (Details) | Jun. 30, 2016USD ($)shares | Dec. 31, 2015USD ($)$ / shares |
CONVERTIBLE NOTES PAYABLE Details | ||
Convertible loan payable having a balance due | $ 50,000 | |
Common stock at a conversion price per share | $ / shares | $ 0.10 | |
Interest free for number of years for a long term convertible note | 4 | |
Long term convertible note amount | $ 50,000 | |
The new Convertible Note bears interest at the rate | 3.50% | |
Holder and its affiliates owes more than the Company's outstanding common stock. | 4.90% | 4.90% |
Company determined fair value of new debt | $ 1,435,000 | |
Company recorded a loss on debt extinguishment | $ 1,385,000 | |
The holder of the Note converted face value | $ 5,000 | |
Holder of note converted note 5,000 face value into shares | shares | 500,000 | |
The balance of note | $ 45,000 | |
Interest accured there on | 0 | |
Outstanding convertible note payable having a balance due | $ 265,490 | $ 400,000 |
Note bears interest rate per annum | 4.00% | |
Holder of the Note converted due under the note | $ 154,000 | |
Converted note interest includes | $ 19,490 | |
S-8 shares of the Company's common stock. | shares | 1,540,000 | |
Balance on the note amounted | $ 265,490 | |
Accured interest there on | $ 0 |
STOCK INCENTIVE PLAN (Details)
STOCK INCENTIVE PLAN (Details) - shares | Jun. 30, 2016 | Dec. 31, 2015 | May 29, 2015 |
STOCK INCENTIVE PLAN Details | |||
Company may issue up to S-8 shares to officers, employees , directors or consultants | 10,000,000 | ||
Shares available for issuance under the plan | 8,460,000 | 10,000,000 |
PREFERRED STOCK (Details)
PREFERRED STOCK (Details) | Jun. 30, 2016$ / sharesshares | Dec. 31, 2015$ / sharesshares |
Preferred stock | ||
Total authorized shares of preferred stock | 5,000,000 | 5,000,000 |
Per share value of Preferred stock | $ / shares | $ 0.0001 | $ 0.0001 |
Shares designated as Series A Convertible Preferred Stock. | 1,000,000 | 1,000,000 |
Undesignated shares of Preferred Stock. | 4,000,000 | 4,000,000 |
Shares of Series A convertible preferred stock issued and outstanding | 1,000,000 | 0 |
Conversion rights of every share of Series A Convertible preferred stock in to common shares | 5 | |
Liquidation Preference of every share of Series A Convertible preferred stock | $ / shares | $ 1 | |
Votes per share of preferred stock held. | 100 |
COMMON STOCK (Details)
COMMON STOCK (Details) - $ / shares | Jun. 30, 2016 | Dec. 31, 2015 |
Common stock | ||
Company has authorized shares of common stock | 300,000,000 | 300,000,000 |
Company had shares of common stock issued and outstanding | 41,802,659 | 39,633,706 |
Per share value of common stock | $ 0.0001 | $ 0.0001 |
Common stock - Employment agree
Common stock - Employment agreement CEO (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Sep. 13, 2015 | |
Common stock - Employment agreement CEO | ||||
Company issued restricted shares of the Company's common stock based upon the average ten (10) day closing price immediately preceding the grant date | 125,000 | 125,000 | ||
Company recorded compensation expense in the accompanying consolidated statement of operations | $ 52,500 | |||
Company recorded accrued compensation expense in the accompanying consolidated financial statements | $ 67,375 | $ 48,250 | ||
Company was obligated to issue restricted shares of the Company's common stock to CEO | 125,000 |
Common stock - Employment agr38
Common stock - Employment agreement CTO (Details) - USD ($) | Jun. 30, 2016 | Apr. 01, 2016 | Jan. 01, 2016 |
Common stock - Employment agreement CTO | |||
Annual base compensation payable to Mr. Changoer | $ 126,000 | ||
Quarterly incentive payments of either cash or shares of the Company's common stock | 120,000 | ||
Company was obligated to issue restricted shares of the Company's common stock to Mr. Changoer | 120,000 | ||
Accrued compensation expense in the accompanying unaudited condensed consolidated financial statements to account for the required issuance of the incentive shares | $ 58,200 |
Common stock issues for service
Common stock issues for services and conversions (Details) - USD ($) | Jun. 30, 2016 | Mar. 17, 2016 |
Common stock issues for services and conversions | ||
Company issued restricted shares of common stock as payment for consultant services | 3,953 | |
Company recorded compensation expense in the accompanying unaudited condensed consolidated financial statements as a result of the issuance | $ 3,123 | |
Company issued restricted shares of its common stock in exchange for the conversion of a convertible note payable, | 500,000 | |
Amount of convertible note payable converted for shares | $ 5,000 | |
Company issued unrestricted S-8 shares of its common stock in exchange for the conversion of a convertible note payable, | 1,540,000 | |
Principal amount of convertible note payable converted for shares | $ 134,510 | |
Accrued interest on convertible note payable converted for shares | $ 19,490 |
EMPLOYMENT AGREEMENT AND COMMIT
EMPLOYMENT AGREEMENT AND COMMITMENTS (Details) - USD ($) | Jun. 30, 2016 | Jun. 13, 2016 | Apr. 01, 2016 | Mar. 13, 2016 | Jan. 01, 2016 | Jun. 13, 2014 |
EMPLOYMENT AGREEMENT AND COMMITMENTS | ||||||
Annual base compensation payable under the agreement | $ 126,000 | $ 240,000 | ||||
One-time incentive payment payable in restricted shares of the Company's common stock | 500,000 | |||||
Quarterly incentive payments of either shares of the Company's common stock or cash equal to fair market value of shares | 120,000 | 125,000 | ||||
Company was obligated to issue restricted shares of common stock | 125,000 | 120,000 | 125,000 | |||
Accrued compensation expense recorded to account for the required issuance of the incentive shares to CEO | $ 115,625 | |||||
Accrued compensation expense recorded to account for the required issuance of the incentive shares to CTO | $ 58,200 |
Commitments and reservation agr
Commitments and reservation agreement (Details) | Oct. 01, 2015USD ($) |
Commitments and reservation agreement | |
Company paid the reservation fee in the amount as per the agreement | $ 65,170 |
Reservation fee deposit gives the company an exclusive right to purchase the building land for a purchase price in (Euros) | $ 1,110,000 |
Company extended reservation for a period in months | 12 |
GOING CONCERN (Details)
GOING CONCERN (Details) | Jun. 30, 2016USD ($) |
GOING CONCERN DETAILS | |
Company has negative working capital | $ 2,583,588 |
Incurred accumulated deficit in the period | 13,627,404 |
Cash used in operating activities of continuing operations | $ 545,588 |
Subsequent transactions (Detail
Subsequent transactions (Details) | Aug. 18, 2016USD ($)shares | Aug. 17, 2016shares | Aug. 15, 2016shares |
Subsequent transactions | |||
Company issued shares of its Series A Convertible Preferred Stock in exchange of its Undesignated Preferred Stock | 1,000,000 | ||
Undesignated Preferred Stock exchanged for Series A Convertible Preferred Stock | 1,000,000 | ||
Under the terms of the exchange Series A Convertible Preferred Stock received in exchange converted in to restricted shares | 5,000,000 | ||
Company designated shares of a new Series B Convertible Preferred Stock | 500,000 | ||
Company designated shares of a new Series C Convertible Preferred Stock | 500,000 | ||
Voting rights per share | 100 | ||
Each share of Series B and C Convertible Preferred stock is convertible into shares of the Company's common stock | 1 | ||
Company issued all shares of its newly designated Series B Preferred Stock to Sanammad Foundation | 500,000 | ||
Cash received on issue of Series B Preferred Stock to Sanammad Foundation | $ | $ 50,000 | ||
Company issued all shares of its newly designated Series C Preferred Stock to MJNA Investment Holdings, LLC | 500,000 | ||
Cash received on issue of Series C Preferred Stock to MJNA Investment Holdings, LLC | $ | $ 65,000 |