Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Feb. 09, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | Alkame Holdings, Inc. | |
Entity Central Index Key | 1,522,165 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | No | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 198,485,547 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,015 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash | $ 749 | $ 172,730 |
Accounts receivable (net of reserve for bad debts of $148,000 and $23,000, respectively) | 106,558 | 82,510 |
Accounts receivable other | 1,008 | 70,243 |
Prepaid expenses - current | 7,000 | 260,000 |
Inventory | 172,857 | 70,243 |
Total current assets | 288,172 | 585,483 |
Fixed and intangible assets: | ||
Manufacturing equipment, net | 129,161 | 11,149 |
Software | 13,496 | 17,995 |
Intangible assets, net | 1,080,051 | 4,509 |
Total fixed and intangible assets, net | 1,222,709 | 33,653 |
Other assets: | ||
Deferred finance costs | 11,898 | 63,375 |
Investments | 25,630 | 68,400 |
Total other assets | 37,528 | 131,775 |
Total assets | 1,548,409 | 750,911 |
Current liabilities: | ||
Accounts payable and accrued expenses | 698,961 | 544,530 |
Accrued interest | 237,852 | 146,046 |
Accrued compensation | 510,000 | 762,000 |
Loans from officer | 26,456 | 3,489 |
Notes payable | 990,005 | 762,000 |
Note due Xtreme Shareholders | 207,000 | 1,018,782 |
Convertible debentures (net of debt discount of $64,455 and $280,288, respectively) | 471,546 | 168,961 |
Derivative instrument liability | 873,348 | $ 1,018,782 |
Series C Convertible Preferred Stock to be issued | 1,425,000 | |
Total current liabilities | 5,440,167 | $ 2,643,808 |
Long-term liabilities: | ||
Notes payable - long term | 26,199 | 131,490 |
Convertible debt - long term (net of debt discount of $73,811 and $132,254), respectively | 53,412 | 22,968 |
Total long-term liabilities | 79,611 | 154,458 |
Total liabilities | 5,519,778 | 2,798,266 |
Commitment and contingencies | 12,000 | |
Stockholders deficit | ||
Preferred stock - $0.001 par value, authorized - 20,000,000 shares; | 12,000 | 12,000 |
Series A Convertible Preferred stock - $0.001 par value, 12,000,000 shares designated; issued and outstanding - 12,000,000 and 12,000,000 shares, respectively | 12,000 | 12,000 |
Series B Preferred stock - $0.001 par value, 70,000,000 shares designated; issued and outstanding 65,398,334 and 65,398,334 shares, respectively | 65,398 | 65,398 |
Common stock - $0.001 par value, authorized - 900,000,000 shares; issued and outstanding - 181,985,547 and 74,045,606 shares, respectively | 181,986 | 74,046 |
Common stock to be issued | 13,500 | 13,500 |
Additional paid-in capital | 6,912,652 | 6,259,050 |
Accumulated deficit | (11,156,906) | (8,471,350) |
Total stockholders deficit | (3,971,370) | (2,047,355) |
Total liabilities and stockholders deficit | $ 1,548,409 | $ 750,911 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Common Stock, Par Value | $ .001 | $ 0.001 |
Common Stock, Shares Authorized | 900,000,000 | 900,000,000 |
Common Stock, Issued and outstanding | 181,985,547 | 74,045,606 |
Preferred Stock, Par Value | $ .001 | $ 0.001 |
Preferred Stock, Shares Authorized | 20,000,000 | 20,000,000 |
Preferred Stock, Series A, Par Value | $ .001 | $ 0.001 |
Preferred Stock, Series A, Designated | 12,000,000 | 12,000,000 |
Preferred Stock, Series A, Issued and Outstanding | 12,000,000 | |
Preferred Stock, Series B, Par Value | $ .001 | $ 0.001 |
Preferred Stock, Series B, Designated | 70,000,000 | 70,000,000 |
Preferred Stock, Series B, Issued and Outstanding | 65,398,334 | |
Bad debt reserve | $ 148,000 | $ 23,000 |
Convertible debentures, debt discount, current | 64,455 | 280,288 |
Convertible debentures, debt discount, noncurrent | $ 73,811 | $ 132,254 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | ||||
Revenues | $ 199,320 | $ 6,665 | $ 800,571 | $ 105,676 |
Cost of goods sold | 231,596 | 33,717 | 691,499 | 129,340 |
Gross profit (loss) | (32,276) | (27,052) | 109,072 | (23,664) |
Operating expenses: | ||||
Selling expenses | 128,129 | 242,935 | 571,415 | 642,800 |
General and administrative | 359,412 | 110,359 | 899,960 | 261,129 |
Depreciation and amortization | 26,272 | $ 711 | 110,206 | $ 2,133 |
Impairment of goodwill | 658,187 | 658,187 | ||
Impairment of customer list | 218,750 | 218,750 | ||
Total operating expenses | 1,390,750 | $ 354,005 | 2,458,518 | $ 906,062 |
Loss from operations | (1,423,026) | (381,057) | (2,349,446) | (929,726) |
Other Income / (Expenses): | ||||
Amortization of deferred financing costs | (11,441) | (18,549) | (74,810) | (34,799) |
Interest expense | 57,660 | 1,032,993 | 133,082 | 1,073,546 |
Amortization of beneficial conversion feature | (161,324) | (46,845) | (628,111) | (46,845) |
Gain on change in fair value of derivative liability | 347,251 | $ 374,363 | 499,266 | $ 374,363 |
(Loss) gain on settlement of debt | (104) | 627 | ||
Total other income (expenses) | 116,722 | $ 724,024 | 336,109 | $ 780,826 |
Net loss applicable to common stock holders | $ (1,306,304) | $ (1,105,081) | $ (2,685,556) | $ (1,710,552) |
Per share data | ||||
Net Loss per share - basic and diluted | $ (0.01) | $ (0.02) | $ (0.02) | $ (0.02) |
Weighted average number of shares outstanding- basic and diluted | 169,231,116 | 70,558,287 | 137,263,440 | 76,557,282 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net loss | $ (2,685,556) | $ (1,710,552) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Bad debts | 125,000 | 3,000 |
Depreciation and amortization | 127,021 | $ 2,401 |
Impairment of intangible assets | 876,937 | |
Amortization of beneficial conversion feature | 628,111 | $ 46,845 |
Gain on change in fair value of derivative liability | (499,266) | (374,363) |
Amortization of prepaid assets | 253,000 | 472,000 |
Amortization of deferred financing costs | $ 74,810 | 34,799 |
Non-cash interest expense | 1,001,280 | |
Changes in operating asset and liability account balances: | ||
Accounts receivable | $ 93,750 | $ 69,801 |
Accounts receivable - others | $ 24,056 | |
Deposits | $ 15,032 | |
Inventory | $ (27,434) | (14,064) |
Prepaid expenses | (10,000) | |
Accrued interest | $ 110,826 | 64,769 |
Accounts payable and accrued expenses | 524,871 | 228,773 |
Total adjustments | 2,124,182 | 1,400,671 |
Net cash used in operating activities | (561,374) | (309,881) |
Cash flows from investing activities | ||
Payment of purchase consideration to Xtreme Technologies, Inc. | (45,100) | $ (50,000) |
Cash acquired from Xtreme Technologies, Inc. | 13,287 | |
Funds spent on potential Joint Venture | (12,130) | |
Purchase of equipment | 43,395 | $ 7,168 |
Net cash used in investing activities | (87,338) | $ (57,168) |
Cash flows from financing activities: | ||
Proceeds from officer loans | 22,967 | |
Payment of financing costs | (26,893) | $ (39,250) |
Proceeds from notes payable | 171,515 | 100,000 |
Payments of notes payable | (44,691) | (7,000) |
Proceeds from convertible notes | 353,833 | 346,750 |
Net cash provided by financing activities | 476,731 | 400,500 |
Net decrease in cash | (171,981) | 33,451 |
Cash at beginning of period | 172,730 | 128,258 |
Cash at end of period | 749 | $ 161,709 |
Supplemental Schedule of Cash Flow Information: | ||
Cash paid for interest | $ 15,100 | |
Cash paid for income taxes | ||
Supplemental Schedules of Noncash Investing and Financing Activities: | ||
Conversion of notes payable and accrued interest into common stock | 314,653 | |
Common stock issued to settle accounts payable | $ 446,889 | |
Payment made by EROP to noteholders on Company's behalf | 318,000 | |
Assets taken over and liabilities assumed from Xtreme Technologies, Inc. | $ 2,050,000 | |
Conversion of common shares in Series B convertible preferred stock | $ 65,211 | |
Beneficial conversion feature on convertible debt | $ 353,832 | 1,348,030 |
Common stock issued for deferred financing cost | 625,000 | |
Amortization of equity deferred financing cost to additional paid-in capital | $ 26,042 |
Organization and Nature of Oper
Organization and Nature of Operations | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Operations | Alkame Holdings, Inc. (the "Company", we, us or our) was incorporated under the laws of the State of Nevada on April 19, 2010. The Company is in the business of distributing bottled/canned alkaline, antioxidant and oxygenated water. On June 24, 2013, the Company entered into a share exchange agreement with Alkame Water, Inc. (Alkame) and the shareholders of all of the issued and outstanding shares of Alkame. On June 25, 2013, the Company acquired 100% of the members shares of Alkame, a Company incorporated in the state of Nevada on March 1, 2012, in exchange for 150,000,000 common shares, comprised of 116,666,667 common shares privately transacted from the President of Company and the issuance of 33,333,333 common shares to shareholders of Alkame. Effectively, Alkame held 71% of the issued and outstanding common shares of the Company and the transaction has been accounted for as a reverse merger, where Alkame is deemed to be the acquirer and or the surviving entity for accounting purposes. As part of the acquisition transaction, all assets and liabilities of Alkame Holdings, Inc. at the date of acquisition were assumed by the former management. The transaction is accounted for using the purchase method of accounting. As a result of the recapitalization and change in control, Alkame is the acquiring entity in accordance with ASC 805, Business Combinations. Accordingly, the historical financial statements are those of Alkame, the accounting acquirer, immediately following the consummation of the reverse merger. Stock Purchase Definitive Agreement with Xtreme Technologies, Inc. On April 21, 2014, the Company entered into a Stock Purchase Definitive Agreement with Xtreme Technologies, Inc., an Idaho corporation. In accordance with the terms of the Agreement, the Company will purchase all of the outstanding shares of Xtreme for the purchase price of $2,050,000.00, payable as follows: · An initial cash deposit of $50,000 was converted into a non-refundable payment to extend the closing date; · An additional $50,000 deposit payment was made at the date of extension; · An additional cash payment of $525,000 shall be paid on or before the Closing Date (defined below), which, along with the additional $50,000 deposit, shall pay specific obligations on Xtremes balance sheet; · As amended per agreement on December 9, 2015, the balance of $1,425,000.00 shall be payable by the issuance of shares of the Companys Series C Preferred Stock with a stated value of $1.00 per share to be divided pro rata among the Companys shareholders of record as of the Closing Date. The Series C Preferred Stock includes an option to convert such shares of Series C Preferred Stock into the Companys Common Stock at the market price on the day prior to conversion; and · One of Xtremes previous officers and directors holds outstanding options to purchase up to 1,009,000 shares of Xtremes common stock at the price of $0.10 per share. At the Closing Date, pursuant to Idaho law, Xtreme shall notify this previous officer and director of his 30-day right to exercise any or all of his remaining options. If he elects to exercise any of his options within such 30-day period, the Company agrees to issue additional shares of Series C Preferred Stock in exchange for such Xtreme shares. o After proper notice, the holder permitted the options to expire unexercised. The following amendments were entered in relation the Xtreme acquisition: 1. Effective January 16, 2015, the sellers of Xtreme were given the option to rescind and terminate the transaction if the debt was not paid within 120 days of the closing date. 2. Effective April 15, 2015, the 120-day deadline was extended to 240 days after the closing date. Such deadline will be automatically extended by additional 30 day increments, provided that payments from EROP have been made to escrow within 60 days of the 240-day expiration period. 3. Effective December 9, 2015, the securities deliverable to the sellers of Xtreme was amended from Series B Preferred Stock to Series C Preferred Stock. On January 13, 2015, the Company completed the acquisition of Xtreme Technologies, Inc., an Idaho corporation. Under the Agreement, Amendment, and Second Amendment, Xtreme became our wholly-owned subsidiary and we acquired the patents on the proprietary process that we believe is the most technologically advanced in water treatment systems for complete hydration. We assumed the operations of Xtreme and continue its business of distributing technologically enhanced bottled water. Upon closing of the acquisition, we discovered that Xtreme was operating at a loss for the prior year and that it required a substantial cash infusion. We have begun a program of upgrading the production line, reorganized personnel, and began an effort to increase sales of the division so that it returns to profitability as quickly as possible. Our primary objective now is to introduce, promote, aggressively market and establish channels of distribution to sell our product to a wide range of consumers, first in the United States, Canada and Mexico, and then globally. We believe that holding the patents will enable us to enhance our position in the investment community, allow us to expand our reach in the distribution of product, and provide us access to other applications the water treatment technology has available. We are exploring other uses of our water so that we can diversify our portfolio of products to include other specialty uses outside of the bottled water and health water markets. The Companys fiscal year end is December 31. |
Going Concern
Going Concern | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | These accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. For the nine months ended September 30, 2015, the Company recognized $800,571 in revenue, and as of September 30, 2015 had an accumulated deficit of $11,156,906. The continuation of the Company as a going concern is dependent upon the continued financial support from its management, and its ability to identify future investment opportunities and obtain the necessary debt or equity financing, and generating profitable operations from the Companys future operations. However, there can be no assurance that these arrangements will be sufficient to fund its ongoing capital expenditures, working capital, and other cash requirements. The outcome of these matters cannot be predicted at this time. These factors raise substantial doubt regarding the Companys ability to continue as a going concern. These accompanying unaudited condensed consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The preparation of unaudited condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Companys estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | a) Use of Estimates The preparation of unaudited condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Companys estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. b) Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries Alkame Water, Inc. and Xtreme Technologies, Inc. All significant inter-company transactions are eliminated. c) Cash and Cash Equivalents For purposes of the statement of cash flows, cash includes demand deposits, saving accounts and money market accounts. The Company considers all highly liquid instruments with maturities of three months or less when purchased to be cash equivalents. d) Accounts receivable and concentration of credit risk Because the Company currently uses distributors as their main source of product sales and placement, there is an inherent risk that the distributor could experience difficulty in their payments for accounts they ship to. The result, may be that they, while collecting from the stores and chains they supply, they do not process through the payments to us. Although in the past the Company did see significant credit risk associated with the trade receivables, repayment is dependent upon the financial stability of the various distributors and customers to which shipment takes place. As a result, the Company is looking more closely at the credit worthiness of its customer and how large a footprint and customer base various distributors have, and is attempting to limit how much of our business is conducted through any one customer or distributor. Our concentration risk is being reevaluated on a quarterly basis. e) Allowance for doubtful accounts The allowance for doubtful accounts is based on the Companys assessment of the collectability of customer accounts and the aging of the accounts receivable. The Company regularly reviews the adequacy of the Companys allowance for doubtful accounts through identification of specific receivables where it is expected that payments will not be received. The Company also establishes an unallocated reserve that is applied to all amounts that are not specifically identified. In determining specific receivables where collections may not have been received, the Company reviews past due receivables and gives consideration to prior collection history and changes in the customers overall business condition. The allowance for doubtful accounts reflects the Companys best estimate as of the reporting dates. At September 30, 2015 and December 31, 2014, the Company had an allowance for bad debts in the amount of $148,000 and $23,000 respectively. f) Basic and Diluted Net Loss per Share The Company computes net loss per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. Such securities, shown below, presented on a common share equivalent basis and outstanding as of September 30, 2015 and 2014 have been excluded from the per share computations: As of September 30, 2015 September 30, 2014 Series A Convertible Preferred Stock 600,000,000 600,000,000 Series B Convertible Preferred Stock 65,398,334 65,210,834 Series C Convertible Preferred Stock 356,250,000 Convertible notes payable 356,576,614 5,862,185 Warrants 1,587,302 EROP conversion of debt 136,543,519 g) Financial Instruments Pursuant to ASC 820, Fair Value Measurements and Disclosures, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instruments categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value: Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Company did not have any Level 2 or Level 3 assets or liabilities as of September 30, 2015, with the exception of its convertible notes payable. The carrying amounts of these liabilities at September 30, 2015 approximate their respective fair value based on the Companys incremental borrowing rate. Cash is considered to be highly liquid and easily tradable as of September 30, 2015 and therefore classified as Level 1 within our fair value hierarchy. In addition, FASB ASC 825-10-25 Fair Value Option, or ASC 825-10-25, was effective for January 1, 2008. ASC 825-10-25 expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments h) Convertible Instruments The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for Accounting for Derivative Instruments and Hedging Activities. Professional standards generally provide three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as The Meaning of Conventional Convertible Debt Instrument. The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standards when Accounting for Convertible Securities with Beneficial Conversion Features, as those professional standards pertain to Certain Convertible Instruments. Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. ASC 815-40 provides that, among other things, generally, if an event is not within the entitys control could or require net cash settlement, then the contract shall be classified as an asset or a liability. i) Derivative Liabilities The Company assessed the classification of its derivative financial instruments as of March 31, 2015, which consist of convertible instruments and rights to shares of the Companys common stock, and determined that such derivatives meet the criteria for liability classification under ASC 815. ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described. j) Income Taxes Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted ASC 740 Accounting for Income Taxes as of its inception. Pursuant to ASC 740, the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in this financial statement because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years. k) Revenue Recognition The Company recognizes revenue in accordance with ASC-605, Revenue Recognition, which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or title has passed; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Revenues are recognized upon shipment, provided that a signed purchase order has been received, the price is fixed, title has transferred, collection of resulting receivables is reasonably assured, and there are no remaining significant obligations. Reserves for sales returns and allowances, including allowances for so called ship and debit transactions, are recorded at the time of shipment, based on historical levels of returns and discounts, current economic trends and changes in customer demand. Certain Internet generated transactions that are prepaid at time of order, are recognized at the time the merchandise ships from the warehouse to the customer. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required. l) Reclassification Certain reclassifications have been made to conform the prior period data to the current presentation. These reclassifications had no effect on reported net loss. |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2015 | |
Notes Payable [Abstract] | |
Notes Payable | Notes Payable to Stockholders The Company owed $38,199 and $43,490 at September 30, 2015 and December 31, 2014 respectively to a stockholder. During the year ended December 31, 2013, the Company had $63,000 in expenses paid on its behalf by this shareholder which was recorded as a Note. On August 1, 2013, the Company and note holder amended the Note by mutual agreement increasing the principal amount by an additional $10,000 for other services rendered by the former director. The Note is unsecured, and begin accruing interest August 1, 2014 at 5% per annum on the unpaid principal thereafter. Based on a repayment agreement that calls for monthly payments of $1,000 per month. During the nine months ended September 30, 2015 and 2014, the Company repaid $8,000 ($5,291 principal and $2,709 accrued interest) and $7,000 of the Note, respectively. Notes Payable to Xtreme Shareholders: In January 2015, an accredited investor group, EROP, filed and received approval by the courts for a 3(a)10 filing under which they acquired various debts, including the note due to the former shareholders of Xtreme Technologies, Inc. Under terms of the court order, they are able to convert the debts into common shares of the Company at a 40% discount to the market. The original balance acquire was $525,000. As of September 30, 2015 the balance is $207,000. Notes Payable, others: On March 29, 2013, the Company entered into a two-year promissory note agreement for $500,000. On April 8, 2013, the Company received $200,000 and on May 1, 2013, the Company received $300,000. On September 27, 2013, the note agreement was amended to include an additional advance to the Company of $250,000. Pursuant to the agreement, the loan is secured with a general security agreement, bears interest at 10% per annum, and $500,000 is due on March 30, 2015 and $250,000 is due on September 27, 2015. These notes are currently in technical default. To date, the lender has not declared a default, and continues to forebear on collection. On March 11, 2014, the Company entered into an additional two-year promissory note agreement for an additional $100,000 from the same investor group, on the same terms as outlined above. At September 30, 2015 and December 31, 2014, the Company has accrued interest of $183,625 and $119,875, respectively. The original note, and the amendment, each mature two years from date of issuance or amendment. At September 30, 2015, the Company classified $850,000 of this note payable as current liability. The Company paid 10% of proceeds from $750,000 of the long-term notes payable as financing cost of $75,000 to a consultant. The Company will amortize this cost over the term of the long-term note payable. The Company paid 10% of proceeds from the $100,000 long-term notes payable as financing cost of $10,000 to a consultant. The Company will amortize this cost over the term of the long-term note payable. During the nine months ended September 30, 2015 and 2014, the Company charged to operations $74,810 and $34,799 as amortization of deferred financing costs, respectively. As of September 30, 2015 and December 31, 2014, remaining balance in deferred financing cost of $11,898 and $63,375, respectively and is presented as part of other assets. In July 2015, the Company borrowed $70,000 from an accredited investor group on a term loan. The note carries interest at 15% per annum and requires repayment of a total of $98,000 through daily payments of $560. In August 2015, the Company borrowed $50,000 from an accredited investor group on a term loan. The note carries interest at 15% per annum and requires repayment of a total of $74,500 through daily payments of $899. |
Convertible debt
Convertible debt | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Convertible debt | The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for Accounting for Derivative Instruments and Hedging Activities. Professional standards generally provide three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as The Meaning of Conventional Convertible Debt Instrument. The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standards when Accounting for Convertible Securities with Beneficial Conversion Features, as those professional standards pertain to Certain Convertible Instruments. Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. ASC 815-40 provides that, among other things, generally, if an event is not within the entitys control could or require net cash settlement, then the contract shall be classified as an asset or a liability. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | ASC 825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 establishes three levels of inputs that may be used to measure fair value: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed is determined based on the lowest level input that is significant to the fair value measurement. Items recorded or measured at fair value on a recurring basis in the accompanying unaudited condensed consolidated financial statements consisted of the following items as of September 30, 2015: Fair Value Measurements at September 30, 2015 Quoted Prices in Active Significant Other Observable Inputs Significant Liabilities: Derivative Liabilities $ 873,348 $ 873,348 The debt derivative liabilities are measured at fair value using quoted market prices and estimated volatility factors based on historical prices for the Companys common stock and are classified within Level 3 of the valuation hierarchy. The following table provides a summary of changes in fair value of the Companys Level 3 financial liabilities as of September 30, 2015: Derivative Balance, December 31, 2014 $ 1,018,782 Additions 668,537 Change in fair value of derivative liabilities (813,971 ) Balance, September 30, 2015 $ 873,348 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | During the nine months ended September 30, 2015 and 2014, the Company received $22,967 and $0, respectively, in cash loans, and made cash payments on these amounts owing totaling $0 and $0 during the same periods. As of September 30, 2015 and December 31, 2014, the Company owed $26,456 and $3,489, to its President. The amounts owing are unsecured, non-interest bearing and due on demand. As of September 30, 2015 and December 31, 2014, the Company owes $210,000 and $120,000, respectively to Kaufman & Associates (holding more than 5% shares of the Company) in connection with a consulting agreement. |
Stockholders Deficit
Stockholders Deficit | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Stockholders Deficit | Where applicable, all common share numbers have been restated to retroactively reflect, the 1:3 reverse split affected by the Company on January 8, 2014. a) Authorized Authorized capital stock consists of: · 900,000,000 common shares with a par value of $0.001 per share; and · 10 0,000,000 preferred shares with a par value of $0.001 per share; o The Company has designated 12,000,000 shares as Series A Convertible Preferred Series Stock. Each share of Series A Preferred Stock is convertible into fifty (50) shares of Common Stock. o The Company has designated 70,000,000 shares as Series B Convertible Preferred Series Stock. Each share of Series B Preferred Stock is convertible into one (1) share of Common Stock. o The Company has designated 10,000,000 shares as Series C Convertible Preferred Series Stock. Each share of Series C Preferred Stock is convertible into $1.00 of Common Shares at the market price on the date of conversion. Increase in authorized shares On January 24, 2014, the Company filed a Certificate of Amendment to the Companys Articles of Incorporation (the Certificate of Amendment) with the Nevada Secretary of State. The Certificate of Amendment amends Article III of the Companys Articles of Incorporation to authorize the issuance of up to one hundred million (100,000,000) shares of Preferred Stock, par value $0.001 per share, which may be issued in one or more series, with such rights, preferences, privileges and restrictions as shall be fixed by the Companys Board of Directors from time to time. As a result of the Certificate of Amendment, we now have one billion (1,000,000,000) authorized shares, par value $0.001 per share, consisting of two classes designated as Common Stock and Preferred Stock. The total number of shares of Common Stock that we have authority to issue is nine hundred million (900,000,000) shares and the total number of shares of Preferred Stock that we have authority to issue is one hundred million (100,000,000) shares. The Companys Board of Directors and a majority of our shareholders approved the Certificate of Amendment. Series B Convertible Preferred Stock On January 24, 2014, pursuant to Article III of our Articles of Incorporation, the Companys Board of Directors voted to designate a class of preferred stock entitled Series B Preferred Stock, consisting of up to seventy million (70,000,000) shares, par value $0.001. Under the Certificate of Designation, holders of Series B Preferred Stock will participate on an equal basis per-share with holders of our common stock and Series A Preferred Stock in any distribution upon winding up, dissolution, or liquidation. Holders of Series B Preferred Stock are entitled to convert each share of Series B Preferred Stock into one (1) share of common stock. Holders of Series B Preferred Stock are also entitled to vote together with the holders of our common stock and Series A Preferred Stock on all matters submitted to shareholders at a rate of one (1) vote for each share held. The rights of the holders of Series B Preferred Stock are defined in the relevant Certificate of Designation filed with the Nevada Secretary of State on January 24, 2014. Series C Convertible Preferred Stock On January 24, 2014, pursuant to Article III of our Articles of Incorporation, the Companys Board of Directors voted to designate a class of preferred stock entitled Series C Preferred Stock, consisting of up to ten million (10,000,000) shares, par value $0.001. Under the Certificate of Designation, holders of Series C Preferred Stock will be entitled to receive the Stated Value per share ($1.00) in any distribution upon winding up, dissolution, or liquidation. Holders of Series C Preferred Stock are entitled to convert such number of shares of Common Stock equal to the quotient of the Stated Value per share divided by the closing price of our common stock on the day of conversion. Holders of Series C Preferred Stock are also entitled to vote together with the holders of our common stock, Series A Preferred Stock and Series B Preferred Stock on all matters submitted to shareholders at a rate of one (1) vote for each share held. The rights of the holders of Series C Preferred Stock are defined in the relevant Certificate of Designation filed with the Nevada Secretary of State on January 24, 2014. b) Share Issuances On January 28, 2014, six stockholders exchanged a total of 65,210,834 common shares for 65,210,834 Series B Convertible Preferred Stock. On January 12, 2015, the Company issued 3,600,000 common shares at an average price of $0.01926 per share to an accredited investor group in settlement of $69,336 of accounts and notes payable they had previously acquired from the various debt holders, and are being converting under a court approved settlement of a 3(a)10 filing. In February 2015, the Company issued 6,500,000 common shares at a price of $0.01706 per share to an accredited investor group in settlement of $110,910 of accounts and notes payable they had previously acquired from the various debt holders, and are being converting under a court approved settlement of a 3(a)10 filing. In February 2015, the Company issued 13,365,052 common shares at an average price of $0.01291 per share upon conversion by the holders of $166,970 of convertible debentures and $5,557 of accrued interest. In March 2015, the Company issued 16,100,000 common shares at a price of $0.00426 per share to an accredited investor group in settlement of $68,508 of accounts and notes payable they had previously acquired from the various debt holders, and are being converting under a court approved settlement of a 3(a)10 filing. In March 2015, the Company issued 24,373,736 common shares at an average price of $0.0108 per share upon conversion by the holders of $138,113 of convertible debentures and $4,013 of accrued interest. In April 2015, the Company issued 6,000,000 common shares at a price of $0.0024 per share to an accredited investor group in settlement of $14,400 of accounts and notes payable they had previously acquired from the various debt holders, and are being converting under a court approved settlement of a 3(a)10 filing. In May 2015, the Company issued 7,400,000 common shares at a price of $0.0042 per share to an accredited investor group in settlement of $29,748 of accounts and notes payable they had previously acquired from the various debt holders, and are being converting under a court approved settlement of a 3(a)10 filing. In June 2015, the Company issued 10,118,865 common shares at a price of $0.00698 per share to an accredited investor group in settlement of $70,613 of accounts and notes payable they had previously acquired from the various debt holders, and are being converting under a court approved settlement of a 3(a)10 filing. In August 2015, the Company issued 8,000,000 common shares at a price of $0.00335 per share to an accredited investor group in settlement of $26,800 of accounts and notes payable they had previously acquired from the various debt holders, and an additional 7,000,000 common shares at a price of $0.003 per share to the same accredited investor group in settlement of $21,000 of accounts and notes payable they had previously acquired from the various debt holders, and are being converting under a court approved settlement of a 3(a)10 filing. In September 2015, the Company issued 5,482,288 common shares at a price of $0.00198 per share to an accredited investor group in settlement of $10,855 of accounts and notes payable they had previously acquired from the various debt holders, and are being converting under a court approved settlement of a 3(a)10 filing. As of September 30, 2015 and December 31, 2014, there were 181,985,547 and 74,045,606 shares of common stock issued and outstanding, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | On January 13, 2015, the Company purchased one hundred percent (100%) of the shares of Xtreme Technologies, Inc. The aggregate purchase price was $2,050,000, paid as follows: (i) cash of $100,000; (ii) 1,425,000 restricted Preferred Series C stock shares valued at $1.00 per share, totaling $1,425,000; (iii) an unsecured promissory note of $525,000. This transaction was accounted for under the purchase method in accordance with ASC 805. In connection with the Xtreme Technologies, Inc. acquisition, the Company identified and recognized intangible assets of $1,400,000 representing patents, trade names, and customer relationships. The assets were being amortized on a straight line basis over their estimated life of seven (7) years for the patents, and three (3) years for the trade names and customer relationships. This resulted in the sum of the future net cash flows discounted to its present day value. The valuation provided for the patents, trade name, and customer relationships was based on managements calculations. During the nine months ended September 30, 2015 and 2014, the Company recognized amortization expense of $103,571 and $0, respectively. The Company will recognize amortization expense of $24,107 in the remainder of fiscal year ending 2015, $192,857 in the fiscal year ending 2016, $192,857 in the fiscal year ending 2017, $167,857 in the fiscal year ending 2018, and $142,857 each year in the fiscal years 2019 through 2024 and $71,429 in the fiscal year ending 2025. At September 30, 2015, the Intangible asset balance, net of accumulated amortization and impairment, is $1,077,679. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: ASSETS: Current assets $ 144,112 Property & equipment 91,431 Intangible assets 1,400,000 Goodwill 658,187 Total $ 2,293,730 LIABILITIES: Current liabilities $ 243,730 Net purchase price $ 2,050,000 In the third quarter of 2015, the Company determined that the goodwill and the balance of the unamortized customer list should be written down to zero value. As a result, the Company recorded a total impairment to the intangible assets of $876,937. Purchase Price Allocation In accordance with ASC 805, Business Combinations The following unaudited pro forma consolidated results of operations have been prepared, as if the acquisition had occurred as of January 1, 2014: Nine months ended September 30, 2015 2014 (Unaudited) (Unaudited) Revenue $ 804,676 $ 989,844 Net loss from continuing operations $ (1,792,303 ) $ (1,658,811 ) Net loss per share from continuing operations $ (0.01 ) $ (0.02 ) Weighted average number of common stock shares Basic and diluted 181,985,547 74,045,606 Series C Convertible Preferred Stock to be issued: During the nine months ended September 30, 2015, the Company committed to issue 1,425,000 shares of Series C Preferred stock valued at $1.00 per share as part of Stock Purchase Agreement entered into with Xtreme Technologies, Inc. |
Acquisition of Xtreme Technolog
Acquisition of Xtreme Technologies, Inc. | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Acquisition of Xtreme Technologies, Inc. | On January 13, 2015, the Company purchased one hundred percent (100%) of the shares of Xtreme Technologies, Inc. The aggregate purchase price was $2,050,000, paid as follows: (i) cash of $100,000; (ii) 1,425,000 restricted Preferred Series C stock shares valued at $1.00 per share, totaling $1,425,000; (iii) an unsecured promissory note of $525,000. This transaction was accounted for under the purchase method in accordance with ASC 805. In connection with the Xtreme Technologies, Inc. acquisition, the Company identified and recognized intangible assets of $1,400,000 representing patents, trade names, and customer relationships. The assets were being amortized on a straight line basis over their estimated life of seven (7) years for the patents, and three (3) years for the trade names and customer relationships. This resulted in the sum of the future net cash flows discounted to its present day value. The valuation provided for the patents, trade name, and customer relationships was based on managements calculations. During the nine months ended September 30, 2015 and 2014, the Company recognized amortization expense of $103,571 and $0, respectively. The Company will recognize amortization expense of $24,107 in the remainder of fiscal year ending 2015, $192,857 in the fiscal year ending 2016, $192,857 in the fiscal year ending 2017, $167,857 in the fiscal year ending 2018, and $142,857 each year in the fiscal years 2019 through 2024 and $71,429 in the fiscal year ending 2025. At September 30, 2015, the Intangible asset balance, net of accumulated amortization and impairment, is $1,077,679. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: ASSETS: Current assets $ 144,112 Property & equipment 91,431 Intangible assets 1,400,000 Goodwill 658,187 Total $ 2,293,730 LIABILITIES: Current liabilities $ 243,730 Net purchase price $ 2,050,000 In the third quarter of 2015, the Company determined that the goodwill and the balance of the unamortized customer list should be written down to zero value. As a result, the Company recorded a total impairment to the intangible assets of $876,937. Purchase Price Allocation In accordance with ASC 805, Business Combinations The following unaudited pro forma consolidated results of operations have been prepared, as if the acquisition had occurred as of January 1, 2014: Nine months ended September 30, 2015 2014 (Unaudited) (Unaudited) Revenue $ 804,676 $ 989,844 Net loss from continuing operations $ (1,792,303 ) $ (1,658,811 ) Net loss per share from continuing operations $ (0.01 ) $ (0.02 ) Weighted average number of common stock shares Basic and diluted 181,985,547 74,045,606 Series C Convertible Preferred Stock to be issued: During the nine months ended September 30, 2015, the Company committed to issue 1,425,000 shares of Series C Preferred stock valued at $1.00 per share as part of Stock Purchase Agreement entered into with Xtreme Technologies, Inc. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | We have evaluated subsequent events through the date of issuance of the unaudited condensed consolidated financial statements, and did not have any material recognizable subsequent events, other than the following: In November 2015, the Company issued 9,000,000 common shares at a price of $0.00192 per share to an accredited investor group in settlement of $17,280 of accounts and notes payable they had previously acquired from the various debt holders, and are being converting under a court approved settlement of a 3(a)10 filing. In November 2015, the Company designated a Series D Preferred Stock consisting of four million (4,000,000) shares, par value $0.001. The series is convertible into common stock of the Company at a conversion of ten (10) shares of common stock for every Series D Preferred Stock. In addition, holders of the series can vote in matters submitted for vote by the shareholders at the rate of twenty-five thousand (25,000) votes for each share held. Additional rights of the holders of the Series D Preferred Stock are defined in the relevant Certificate of Designation filed with the Nevada Secretary of State on November 25, 2015 and as Exhibit 3.1 to Form 8-K filed on November 30, 2015. In November 2015, the Company, retroactively entered into an employment agreement with Robert Eakle our executive officer and director for the year ended December 31, 2015. Simultaneously, the Company retroactively entered into a consulting agreement with Kaufman & Associates, Inc. Under the terms of the agreements, each will receive annual compensation of $120,000 and receive 1,000,000 shares of our newly created Series D Preferred Stock. Additional information and details of the agreements can be found in the agreements filed as Exhibits 10.1 and 10.2 to Form 8-K filed on November 30, 2015. In December 2015, the Company issued 7,500,000 common shares at a price of $0.0024 per share to an accredited investor group in settlement of $18,000 of accounts and notes payable they had previously acquired from the various debt holders, and are being converting under a court approved settlement of a 3(a)10 filing. As previously reported, on January 22, 2015, the Company entered into a binding Memorandum of Understanding to form a joint venture (the MOU) with Read Made, Inc. The purpose of the joint venture is to develop intellectual property associated with single use disposable baby bottles and market the completed products in the US and international markets. It has been brought to the Companys attention that Ready Made has signed a new agreement, without any formal termination of the existing MOU. The Company has decided to announce its formal rescission from the MOU, due to the inability to come to mutually agreeable terms. |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Use of Estimates | The preparation of unaudited condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company's estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. |
Principles of Consolidation | The preparation of unaudited condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company's estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. |
Cash and Cash Equivalents | For purposes of the statement of cash flows, cash includes demand deposits, saving accounts and money market accounts. The Company considers all highly liquid instruments with maturities of three months or less when purchased to be cash equivalents. |
Accounts receivable and concentration of credit risk | Because the Company currently uses distributors as their main source of product sales and placement, there is an inherent risk that the distributor could experience difficulty in their payments for accounts they ship to. The result, may be that they, while collecting from the stores and chains they supply, they do not process through the payments to us. Although in the past the Company did see significant credit risk associated with the trade receivables, repayment is dependent upon the financial stability of the various distributors and customers to which shipment takes place. As a result, the Company is looking more closely at the credit worthiness of its customer and how large a footprint and customer base various distributors have, and is attempting to limit how much of our business is conducted through any one customer or distributor. Our concentration risk is being reevaluated on a quarterly basis. |
Allowance for doubtful accounts | The allowance for doubtful accounts is based on the Companys assessment of the collectability of customer accounts and the aging of the accounts receivable. The Company regularly reviews the adequacy of the Companys allowance for doubtful accounts through identification of specific receivables where it is expected that payments will not be received. The Company also establishes an unallocated reserve that is applied to all amounts that are not specifically identified. In determining specific receivables where collections may not have been received, the Company reviews past due receivables and gives consideration to prior collection history and changes in the customers overall business condition. The allowance for doubtful accounts reflects the Companys best estimate as of the reporting dates. At September 30, 2015 and December 31, 2014, the Company had an allowance for bad debts in the amount of $148,000 and $23,000 respectively. |
Basic and Diluted Net Loss per Share | The Company computes net loss per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. Such securities, shown below, presented on a common share equivalent basis and outstanding as of September 30, 2015 and 2014 have been excluded from the per share computations: As of September 30, 2015 September 30, 2014 Series A Convertible Preferred Stock 600,000,000 600,000,000 Series B Convertible Preferred Stock 65,398,334 65,210,834 Series C Convertible Preferred Stock 356,250,000 Convertible notes payable 356,576,614 5,862,185 Warrants 1,587,302 EROP conversion of debt 136,543,519 |
Financial Instruments | Pursuant to ASC 820, Fair Value Measurements and Disclosures, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instruments categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value: Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Company did not have any Level 2 or Level 3 assets or liabilities as of September 30, 2015, with the exception of its convertible notes payable. The carrying amounts of these liabilities at September 30, 2015 approximate their respective fair value based on the Companys incremental borrowing rate. Cash is considered to be highly liquid and easily tradable as of September 30, 2015 and therefore classified as Level 1 within our fair value hierarchy. In addition, FASB ASC 825-10-25 Fair Value Option, or ASC 825-10-25, was effective for January 1, 2008. ASC 825-10-25 expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments |
Convertible Instruments | The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for Accounting for Derivative Instruments and Hedging Activities. Professional standards generally provide three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as The Meaning of Conventional Convertible Debt Instrument. The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standards when Accounting for Convertible Securities with Beneficial Conversion Features, as those professional standards pertain to Certain Convertible Instruments. Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. ASC 815-40 provides that, among other things, generally, if an event is not within the entitys control could or require net cash settlement, then the contract shall be classified as an asset or a liability. |
Derivative Liabilities | The Company assessed the classification of its derivative financial instruments as of March 31, 2015, which consist of convertible instruments and rights to shares of the Companys common stock, and determined that such derivatives meet the criteria for liability classification under ASC 815. ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described. |
Income Taxes | Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted ASC 740 Accounting for Income Taxes as of its inception. Pursuant to ASC 740, the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in this financial statement because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years. |
Revenue Recognition | The Company recognizes revenue in accordance with ASC-605, Revenue Recognition, which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or title has passed; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Revenues are recognized upon shipment, provided that a signed purchase order has been received, the price is fixed, title has transferred, collection of resulting receivables is reasonably assured, and there are no remaining significant obligations. Reserves for sales returns and allowances, including allowances for so called ship and debit transactions, are recorded at the time of shipment, based on historical levels of returns and discounts, current economic trends and changes in customer demand. Certain Internet generated transactions that are prepaid at time of order, are recognized at the time the merchandise ships from the warehouse to the customer. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required. |
Reclassification | Certain reclassifications have been made to conform the prior period data to the current presentation. These reclassifications had no effect on reported net loss. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Schedule of Anti-Dilutive Series A Convertible Preferred Stock | As of September 30, 2015 September 30, 2014 Series A Convertible Preferred Stock 600,000,000 600,000,000 Series B Convertible Preferred Stock 65,398,334 65,210,834 Series C Convertible Preferred Stock 356,250,000 Convertible notes payable 356,576,614 5,862,185 Warrants 1,587,302 EROP conversion of debt 136,543,519 |
Convertible debt (Tables)
Convertible debt (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Convertible Notes and Debentures | September 30, 2015 December 31, 2014 Convertible notes payable $ 663,222 $ 604,472 Unamortized debt discount (138,264 ) (412,543 ) Carrying amount $ 524,958 $ 191,929 Less: current portion (471,546 ) (168,962 ) Long-term convertible notes, net $ 53,412 $ 22,968 |
Fair Value of Financial Instr21
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Measurements | Fair Value Measurements at September 30, 2015 Quoted Prices in Active Significant Other Observable Inputs Significant Liabilities: Derivative Liabilities $ 873,348 $ 873,348 |
Schedule of Summary of Changes in Fair Value | Derivative Balance, December 31, 2014 $ 1,018,782 Additions 668,537 Change in fair value of derivative liabilities (813,971 ) Balance, September 30, 2015 $ 873,348 |
Acquisition of Xtreme Technol22
Acquisition of Xtreme Technologies, Inc. (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Acquisition Of Xtreme Technologies Inc. Tables | |
Schedule of Estimated Fair Value of Assets and Liabilities Acquired | ASSETS: Current assets $ 144,112 Property & equipment 91,431 Intangible assets 1,400,000 Goodwill 658,187 Total $ 2,293,730 LIABILITIES: Current liabilities $ 243,730 Net purchase price $ 2,050,000 |
Schedule of Unaudited Pro Forma Consolidated Results of Operations | Nine months ended September 30, 2015 2014 (Unaudited) (Unaudited) Revenue $ 804,676 $ 989,844 Net loss from continuing operations $ (1,792,303 ) $ (1,658,811 ) Net loss per share from continuing operations $ (0.01 ) $ (0.02 ) Weighted average number of common stock shares Basic and diluted 181,985,547 74,045,606 |
Nature of Operations and Contin
Nature of Operations and Continuance of Business (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Jan. 13, 2015 | |
Date of Incorporation | Apr. 19, 2010 | |
Current Fiscal Year End Date | --12-31 | |
Series C Preferred Stock Designated, Stated Value | $ 1 | |
Alkame Water Inc. | ||
Date of Acquisition | Jun. 25, 2013 | |
Shares Issued, related party | 116,666,667 | |
Shares Issued, former shareholders of Alkame Water | 33,333,333 | |
Shares Issued, Reverse Merger | 150,000,000 | |
Acquisition of Alkame Water | 100.00% | |
Acquisition of the Company by Alkame Water | 71.00% | |
Xtreme SPA | ||
Date of Agreement | Apr. 21, 2014 | |
Purchase Price | $ 2,050,000 | |
Cash Payment | 50,000 | |
Additional Cash Payment | 525,000 | |
Initial Deposit | 50,000 | |
Balance | $ 1,425,000 | |
Common Stock, shares | 1,009,000 | |
Common Stock, Price Per Share | $ 0.10 | |
Xtreme SPA Amdt | ||
Date of Agreement | Dec. 9, 2015 | |
Balance | $ 1,425,000 | |
Series C Preferred Stock Designated, Stated Value | $ 1 | |
Preferred Stock, Series C, to be issued | 1,425,000 | |
Xtreme Acquisition | ||
Series C Preferred Stock Designated, Stated Value | $ 1 | |
Preferred Stock, Series C, to be issued | 1,425,000 | |
Xtreme | ||
Purchase Price | $ 2,050,000 |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Accumulated deficit | $ (11,156,906) | $ (11,156,906) | $ (8,471,350) | ||
Revenues | $ 199,320 | $ 6,665 | $ 800,571 | $ 105,676 |
Basis of Presentation (Details
Basis of Presentation (Details Narrative) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Current Fiscal year end | --12-31 |
Summary of Significant Accoun26
Summary of Significant Accounting Policies - Schedule of Anti-Dilutive Series A Convertible Preferred Stock (Details) - shares | Sep. 30, 2015 | Sep. 30, 2014 |
Preferred Stock, Series A, Issued and Outstanding | 12,000,000 | |
Preferred Stock, Series B, Issued and Outstanding | 65,398,334 | |
Common Share Equivalent | ||
Preferred Stock, Series A, Issued and Outstanding | 600,000,000 | 600,000,000 |
Preferred Stock, Series B, Issued and Outstanding | 65,398,334 | 65,398,334 |
Preferred Stock, Series C, Issued and Outstanding | 356,250,000 | |
Convertible notes payable | 356,576,614 | 5,862,185 |
Warrants | 1,587,302 | |
EROP conversion of debt | 136,543,519 |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Summary Of Significant Accounting Policies Details Narrative | ||
Bad debt reserve | $ 148,000 | $ 23,000 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | May. 01, 2013 | Apr. 08, 2013 | |
Repayments of note payable | $ 44,691 | $ 7,000 | ||||||
Note payable related party | $ 38,199 | 38,199 | $ 43,490 | |||||
Accrued interest | 237,852 | $ 237,852 | 146,046 | |||||
Financing Costs | 1,001,280 | |||||||
Amortization of deferred finance costs | 11,441 | $ 18,549 | $ 74,810 | $ 34,799 | ||||
Deferred finance costs | 11,898 | 11,898 | 63,375 | |||||
Total current liabilities | 5,440,167 | 5,440,167 | 2,643,808 | |||||
Total long-term liabilities | 79,611 | $ 79,611 | 154,458 | |||||
Promissory Note 2 | ||||||||
Debt Instrument, Date | Mar. 11, 2014 | |||||||
Debt Instrument, Amount | 100,000 | $ 100,000 | ||||||
Accrued interest | 183,625 | 183,625 | ||||||
Total current liabilities | 850,000 | $ 850,000 | ||||||
Promissory Note | ||||||||
Debt Instrument, Date | Mar. 29, 2013 | |||||||
Debt Instrument, Amount | $ 500,000 | $ 500,000 | ||||||
Promissory Note, receivable | $ 300,000 | $ 200,000 | ||||||
Debt Instrument, Interest Rate | 10.00% | 10.00% | ||||||
Debt Instrument, Maturity Date | Mar. 30, 2015 | |||||||
Promissory Note 1 | ||||||||
Note payable related party | $ 63,000 | |||||||
Promissory Note, receivable | $ 10,000 | |||||||
Debt Instrument, Amended Date | Aug. 1, 2013 | |||||||
Debt Instrument, Interest Rate | 5.00% | |||||||
Consultant #1 | ||||||||
Expenses paid on behalf of the Company | $ 75,000 | |||||||
Consultant #2 | ||||||||
Expenses paid on behalf of the Company | $ 10,000 | |||||||
Prom Note Amdt #1 | ||||||||
Debt Instrument, Date | Sep. 27, 2013 | |||||||
Debt Instrument, Amount | $ 250,000 | $ 250,000 | ||||||
Debt Instrument, Interest Rate | 10.00% | 10.00% | ||||||
Debt Instrument, Maturity Date | Sep. 27, 2015 | |||||||
EROP | ||||||||
Debt Instrument, Date | Jan. 1, 2015 | |||||||
Debt Instrument, Amount | $ 525,000 | $ 525,000 | ||||||
Debt Instrument, Balance | $ 207,000 | $ 207,000 | ||||||
Promissory Note 2 | ||||||||
Accrued interest | $ 119,875 |
Convertible debt - Convertible
Convertible debt - Convertible Notes and Debentures (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Debt Disclosure [Abstract] | ||
Proceeds from convertible notes | $ 663,222 | |
Unamortized debt discount | (138,264) | $ (412,543) |
Carrying amount | 524,958 | 191,929 |
Less: current portion | (471,546) | (168,962) |
Long-term convertible notes, net | $ 53,412 | $ 22,968 |
Convertible debt (Details Narra
Convertible debt (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||||||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | Oct. 29, 2015 | Mar. 05, 2015 | Feb. 25, 2015 | Feb. 19, 2015 | Feb. 10, 2015 | Feb. 09, 2015 | Jan. 29, 2015 | Jan. 22, 2015 | Dec. 16, 2014 | Nov. 12, 2014 | Oct. 27, 2014 | Oct. 24, 2014 | Sep. 11, 2014 | Sep. 05, 2014 | Sep. 04, 2014 | Aug. 11, 2014 | Aug. 06, 2014 | |
Proceeds from convertible notes | $ 663,222 | |||||||||||||||||||||
Interest expense | $ 57,660 | $ 1,032,993 | 133,082 | $ 1,073,546 | ||||||||||||||||||
Amortization of Debt Discount | (161,324) | $ (46,845) | (628,111) | (46,845) | ||||||||||||||||||
Gain on change in fair value of derivative liability | $ 499,266 | $ 374,363 | ||||||||||||||||||||
Accredited Investor #3 | ||||||||||||||||||||||
Date of Agreement | Aug. 11, 2014 | |||||||||||||||||||||
Proceeds from convertible notes | $ 45,000 | |||||||||||||||||||||
Convertible Debt, term | 5 months | |||||||||||||||||||||
Convertible Debt, description | The debenture is convertible at 50% of the lowest traded price in the 20 days prior to the conversion. | |||||||||||||||||||||
Derivative Fair Value | 0 | $ 0 | $ 131,493 | |||||||||||||||||||
Derivative Liability Adjustment | 86,493 | 86,493 | ||||||||||||||||||||
Amortization of Debt Discount | 7,500 | $ 37,500 | ||||||||||||||||||||
Gain on change in fair value of derivative liability | $ 58,401 | |||||||||||||||||||||
Accredited Investor #4 | ||||||||||||||||||||||
Date of Agreement | Sep. 4, 2014 | |||||||||||||||||||||
Proceeds from convertible notes | $ 42,500 | |||||||||||||||||||||
Convertible Debt, term | 9 months | |||||||||||||||||||||
Convertible Debt, description | The debenture is convertible at 58% of the average of the three lowest trading prices in the 10 trading days prior to conversion. | |||||||||||||||||||||
Derivative Fair Value | 0 | $ 0 | $ 52,597 | |||||||||||||||||||
Derivative Liability Adjustment | 10,097 | 10,097 | ||||||||||||||||||||
Amortization of Debt Discount | 23,611 | 18,889 | ||||||||||||||||||||
Gain on change in fair value of derivative liability | $ 59,207 | |||||||||||||||||||||
Accredited Investor #5 | ||||||||||||||||||||||
Date of Agreement | Sep. 5, 2014 | |||||||||||||||||||||
Proceeds from convertible notes | $ 52,500 | |||||||||||||||||||||
Convertible Debt, term | 1 year | |||||||||||||||||||||
Convertible Debt, description | The debenture is convertible at 53% of the lowest trading price in the 20 trading days prior to the conversion. | |||||||||||||||||||||
Derivative Fair Value | 73,499 | $ 73,499 | $ 578,343 | |||||||||||||||||||
Derivative Liability Adjustment | 525,843 | 525,843 | ||||||||||||||||||||
Amortization of Debt Discount | 35,000 | 17,500 | ||||||||||||||||||||
Gain on change in fair value of derivative liability | $ 16,678 | |||||||||||||||||||||
Accredited Investor #6 | ||||||||||||||||||||||
Date of Agreement | Sep. 11, 2014 | |||||||||||||||||||||
Proceeds from convertible notes | $ 56,250 | |||||||||||||||||||||
Convertible Debt, term | 9 months | |||||||||||||||||||||
Convertible Debt, description | The debenture is convertible at 55% of the average of the two lowest trading price in the 25 trading days prior to conversion. | |||||||||||||||||||||
Derivative Fair Value | 0 | $ 0 | $ 300,489 | |||||||||||||||||||
Derivative Liability Adjustment | 244,239 | 244,239 | ||||||||||||||||||||
Amortization of Debt Discount | 31,250 | 25,000 | ||||||||||||||||||||
Gain on change in fair value of derivative liability | $ 84,645 | |||||||||||||||||||||
Accredited Investor #7 | ||||||||||||||||||||||
Date of Agreement | Oct. 24, 2014 | |||||||||||||||||||||
Proceeds from convertible notes | $ 55,000 | |||||||||||||||||||||
Convertible Debt, term | 1 year | |||||||||||||||||||||
Convertible Debt, description | The debenture is convertible at 60% of the lowest closing price in the 20 trading days prior to conversion. | |||||||||||||||||||||
Original Issue Discount | $ 5,000 | |||||||||||||||||||||
Derivative Fair Value | 50,792 | 50,792 | $ 162,550 | |||||||||||||||||||
Derivative Liability Adjustment | 107,550 | 107,550 | ||||||||||||||||||||
Amortization of Debt Discount | 41,250 | 13,750 | ||||||||||||||||||||
Gain on change in fair value of derivative liability | $ 34,423 | |||||||||||||||||||||
Accredited Investor #8 | ||||||||||||||||||||||
Date of Agreement | Oct. 27, 2014 | |||||||||||||||||||||
Proceeds from convertible notes | $ 33,000 | |||||||||||||||||||||
Convertible Debt, term | 2 years | |||||||||||||||||||||
Convertible Debt, description | The debenture is convertible at lesser of (a) $0.15 or (b) 60% of the lowest trading price in the 25 trading days prior to conversion. | |||||||||||||||||||||
Original Issue Discount | $ 3,000 | |||||||||||||||||||||
Derivative Fair Value | 53,565 | 53,565 | $ 100,870 | |||||||||||||||||||
Derivative Liability Adjustment | 67,870 | 67,870 | ||||||||||||||||||||
Amortization of Debt Discount | 12,375 | 4,125 | ||||||||||||||||||||
Gain on change in fair value of derivative liability | $ 4,182 | |||||||||||||||||||||
Accredited Investor #9 | ||||||||||||||||||||||
Date of Agreement | Oct. 29, 2014 | |||||||||||||||||||||
Proceeds from convertible notes | $ 55,000 | |||||||||||||||||||||
Convertible Debt, term | 1 year | |||||||||||||||||||||
Convertible Debt, description | The debenture is convertible at lesser of (a) $0.10 or (b) 60% of the lowest trading price in the 25 trading days prior to conversion. | |||||||||||||||||||||
Original Issue Discount | $ 5,000 | |||||||||||||||||||||
Derivative Fair Value | 55,221 | 55,221 | $ 142,870 | |||||||||||||||||||
Derivative Liability Adjustment | 87,870 | 87,870 | ||||||||||||||||||||
Amortization of Debt Discount | 41,250 | 13,750 | ||||||||||||||||||||
Gain on change in fair value of derivative liability | $ 33,270 | |||||||||||||||||||||
Accredited Investor #2 | ||||||||||||||||||||||
Date of Agreement | Aug. 6, 2014 | |||||||||||||||||||||
Proceeds from convertible notes | $ 68,000 | |||||||||||||||||||||
Convertible Debt, term | 9 months | |||||||||||||||||||||
Convertible Debt, description | The debenture is convertible at 58% of the average of the three lowest trading prices in the 10 trading days prior to conversion. | |||||||||||||||||||||
Derivative Fair Value | 0 | $ 0 | $ 94,657 | |||||||||||||||||||
Derivative Liability Adjustment | 32,145 | 32,145 | ||||||||||||||||||||
Amortization of Debt Discount | 30,222 | 37,778 | ||||||||||||||||||||
Gain on change in fair value of derivative liability | $ 90,253 | |||||||||||||||||||||
Accredited Investor #11 | ||||||||||||||||||||||
Date of Agreement | Dec. 16, 2014 | |||||||||||||||||||||
Proceeds from convertible notes | $ 39,772 | |||||||||||||||||||||
Convertible Debt, term | 2 years | |||||||||||||||||||||
Convertible Debt, description | The debenture is convertible at 60% of the lowest trading price in the 25 trading days prior to conversion. | |||||||||||||||||||||
Derivative Fair Value | 64,323 | $ 64,323 | $ 85,288 | |||||||||||||||||||
Derivative Liability Adjustment | 45,566 | 45,566 | ||||||||||||||||||||
Amortization of Debt Discount | 14,895 | 1,655 | ||||||||||||||||||||
Gain on change in fair value of derivative liability | $ 5,665 | |||||||||||||||||||||
Accredited Investor #12 | ||||||||||||||||||||||
Date of Agreement | Jan. 22, 2015 | |||||||||||||||||||||
Proceeds from convertible notes | $ 75,000 | |||||||||||||||||||||
Convertible Debt, term | 1 year | |||||||||||||||||||||
Convertible Debt, description | The debenture is convertible at 55% of the lowest trading price in the 20 trading days prior to conversion. | |||||||||||||||||||||
Derivative Fair Value | 97,161 | $ 97,161 | $ 210,982 | |||||||||||||||||||
Derivative Liability Adjustment | 135,982 | 135,982 | ||||||||||||||||||||
Amortization of Debt Discount | 56,250 | |||||||||||||||||||||
Gain on change in fair value of derivative liability | $ 113,821 | |||||||||||||||||||||
Accredited Investor #13 | ||||||||||||||||||||||
Date of Agreement | Jan. 29, 2015 | |||||||||||||||||||||
Proceeds from convertible notes | $ 28,000 | |||||||||||||||||||||
Convertible Debt, term | 9 months | |||||||||||||||||||||
Convertible Debt, description | The debenture is convertible at 55% of the lowest trading price in the 20 trading days prior to conversion. | |||||||||||||||||||||
Derivative Fair Value | 23,754 | $ 23,754 | $ 46,247 | |||||||||||||||||||
Derivative Liability Adjustment | 18,247 | 18,247 | ||||||||||||||||||||
Amortization of Debt Discount | 27,999 | |||||||||||||||||||||
Gain on change in fair value of derivative liability | $ 22,493 | |||||||||||||||||||||
Accredited Investor #14 | ||||||||||||||||||||||
Date of Agreement | Feb. 9, 2015 | |||||||||||||||||||||
Proceeds from convertible notes | $ 108,000 | |||||||||||||||||||||
Convertible Debt, term | 1 year | |||||||||||||||||||||
Convertible Debt, description | The debenture is convertible at 60% of the lowest trading price in the 20 trading days prior to conversion. | |||||||||||||||||||||
Derivative Fair Value | 141,415 | $ 141,415 | $ 192,372 | |||||||||||||||||||
Derivative Liability Adjustment | 73,521 | 73,521 | $ 73,521 | |||||||||||||||||||
Amortization of Debt Discount | 72,000 | |||||||||||||||||||||
Gain on change in fair value of derivative liability | $ 40,106 | |||||||||||||||||||||
Accredited Investor #15 | ||||||||||||||||||||||
Date of Agreement | Feb. 10, 2015 | |||||||||||||||||||||
Proceeds from convertible notes | $ 22,000 | |||||||||||||||||||||
Convertible Debt, term | 2 years | |||||||||||||||||||||
Convertible Debt, description | The debenture is convertible at 60% of the lowest trading price in the 25 trading days prior to conversion. | |||||||||||||||||||||
Derivative Fair Value | 37,011 | $ 37,011 | $ 41,170 | |||||||||||||||||||
Derivative Liability Adjustment | 19,710 | 19,710 | ||||||||||||||||||||
Amortization of Debt Discount | 10,083 | |||||||||||||||||||||
Gain on change in fair value of derivative liability | $ 4,159 | |||||||||||||||||||||
Accredited Investor #16 | ||||||||||||||||||||||
Date of Agreement | Feb. 19, 2015 | |||||||||||||||||||||
Proceeds from convertible notes | $ 35,000 | |||||||||||||||||||||
Convertible Debt, term | 2 years | |||||||||||||||||||||
Convertible Debt, description | The debenture is convertible at 50% of the lowest trading price in the 20 trading days prior to conversion. | |||||||||||||||||||||
Derivative Fair Value | 57,479 | $ 57,479 | $ 53,829 | |||||||||||||||||||
Derivative Liability Adjustment | 18,829 | 18,829 | ||||||||||||||||||||
Amortization of Debt Discount | 23,333 | |||||||||||||||||||||
Gain on change in fair value of derivative liability | $ (3,650) | |||||||||||||||||||||
Accredited Investor #17 | ||||||||||||||||||||||
Date of Agreement | Feb. 25, 2015 | |||||||||||||||||||||
Proceeds from convertible notes | $ 33,333 | |||||||||||||||||||||
Convertible Debt, term | 2 years | |||||||||||||||||||||
Convertible Debt, description | The debenture is convertible at the lower of (a) $0.10 per share; or (b) 60% of the lowest trading price in the 25 trading days prior to conversion. | |||||||||||||||||||||
Derivative Fair Value | 64,625 | $ 64,625 | $ 61,358 | |||||||||||||||||||
Derivative Liability Adjustment | 20,932 | 20,932 | ||||||||||||||||||||
Amortization of Debt Discount | 11,112 | |||||||||||||||||||||
Gain on change in fair value of derivative liability | $ 5,059 | |||||||||||||||||||||
Accredited Investor #18 | ||||||||||||||||||||||
Date of Agreement | Mar. 5, 2015 | |||||||||||||||||||||
Proceeds from convertible notes | $ 52,500 | |||||||||||||||||||||
Convertible Debt, term | 8 months | |||||||||||||||||||||
Convertible Debt, description | The debenture is convertible at 53% of the lowest trading price in the 20 trading days prior to the conversion. | |||||||||||||||||||||
Derivative Fair Value | 97,718 | $ 97,718 | $ 73,432 | |||||||||||||||||||
Derivative Liability Adjustment | 20,932 | 20,932 | ||||||||||||||||||||
Amortization of Debt Discount | 30,625 | |||||||||||||||||||||
Gain on change in fair value of derivative liability | $ 8,807 | |||||||||||||||||||||
Accredited Investor #10 | ||||||||||||||||||||||
Date of Agreement | Nov. 12, 2014 | |||||||||||||||||||||
Proceeds from convertible notes | $ 75,000 | |||||||||||||||||||||
Convertible Debt, term | 1 year | |||||||||||||||||||||
Convertible Debt, description | The debenture is convertible at 50% of the lowest trading price in the 20 trading days prior to conversion. | |||||||||||||||||||||
Derivative Fair Value | 101,204 | $ 101,204 | $ 324,627 | |||||||||||||||||||
Derivative Liability Adjustment | $ 249,627 | 249,627 | ||||||||||||||||||||
Amortization of Debt Discount | 56,250 | 4,795 | ||||||||||||||||||||
Gain on change in fair value of derivative liability | $ 94,135 | |||||||||||||||||||||
Warrants | 1,587,302 | 1,587,302 | ||||||||||||||||||||
Warrants, exercise price | $ 0.24 | $ 0.24 | ||||||||||||||||||||
Accredited Investor | ||||||||||||||||||||||
Date of Agreement | Aug. 6, 2014 | |||||||||||||||||||||
Proceeds from convertible notes | $ 82,500 | |||||||||||||||||||||
Convertible Debt, term | 1 year | |||||||||||||||||||||
Convertible Debt, description | The debenture is convertible at the lesser of $0.10 per share, or 60% of the lowest trade price in the 25 trading days prior to conversion. | |||||||||||||||||||||
Interest expense | 7,500 | |||||||||||||||||||||
Original Issue Discount | $ 7,500 | |||||||||||||||||||||
Derivative Fair Value | $ 0 | 0 | $ 190,451 | |||||||||||||||||||
Derivative Liability Adjustment | $ 107,951 | 107,951 | ||||||||||||||||||||
Amortization of Debt Discount | 65,313 | $ 17,187 | ||||||||||||||||||||
Gain on change in fair value of derivative liability | $ 142,317 |
Fair Value of Financial Instr31
Fair Value of Financial Instruments - Schedule of Fair Value Measurements (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Current liabilities | ||
Derivative instrument liability | $ 873,348 | $ 1,018,782 |
Fair Value, Inputs, Level 3 | ||
Current liabilities | ||
Derivative instrument liability | $ 873,348 |
Fair Value of Financial Instr32
Fair Value of Financial Instruments - Schedule of Summary of Changes in Fair Value (Details) - USD ($) | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Fair Value Disclosures [Abstract] | ||||
Derivative liability on convertible notes at inception | $ 668,537 | |||
Change in fair value of derivative liability | (813,971) | |||
Derivative instrument liability | $ 873,348 | $ 1,018,782 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |||
Proceeds from related parties | $ 22,967 | ||
Loans from officer | 26,456 | $ 3,489 | |
Accrued liabilites, consulting | $ 210,000 | $ 120,000 |
Stockholders Equity (Details Na
Stockholders Equity (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Jan. 24, 2014 | |
Common Stock, Par Value | $ .001 | $ 0.001 | ||
Common Stock, Shares Authorized | 900,000,000 | 900,000,000 | ||
Common Stock, Issued and outstanding | 181,985,547 | 74,045,606 | ||
Preferred Stock, Par Value | $ .001 | |||
Preferred Stock, Shares Authorized | 20,000,000 | 20,000,000 | ||
Preferred Stock, Series A, Designated | 12,000,000 | 12,000,000 | ||
Preferred Stock, Series B, Designated | 70,000,000 | 70,000,000 | ||
Preferred Stock, Series C, Designated | 10,000,000 | |||
Series C Preferred Stock Designated, Stated Value | $ 1 | |||
Authorized Issuance Preferred Stock, Shares | 100,000,000 | |||
Authorized Issuance Preferred Stock, Par Value | $ 0.001 | |||
Shares Authorized, Shares | 1,000,000,000 | |||
Shares Authorized, Par Value | $ 0.001 | |||
Authorized Issuance Common Stock, Shares | 90,000,000 | |||
Series B Preferred Stock Designated, Shares | 70,000,000 | |||
Series B Preferred Stock Designated, Par Value | $ 0.001 | |||
Sereis C Preferred Stock Designated, Shares | 10,000,000 | |||
Sereis C Preferred Stock Desiganted, Par Value | $ 0.001 | |||
Stockholder Exchange | ||||
Common Shares Exchanged for Series B Preferred Stock | 65,210,834 | |||
Series B Preferred Stock Issued for Exchange for Common Shares | 65,210,834 | |||
Date of Issuance | Jan. 28, 2014 | |||
Group Settlement | ||||
Common Stock, Par Value | $ 0.01926 | |||
Date of Issuance | Jan. 12, 2015 | |||
Common Stock, issued | 3,600,000 | |||
Accounts and notes payable, settlement | $ 69,336 | |||
Group Settlement #2 | ||||
Common Stock, Par Value | $ 0.01706 | |||
Date of Issuance | Feb. 1, 2015 | |||
Common Stock, issued | 6,500,000 | |||
Accounts and notes payable, settlement | $ 110,910 | |||
Debt Conversion | ||||
Common Stock, Par Value | $ 0.01291 | |||
Date of Issuance | Feb. 1, 2015 | |||
Common Stock, issued, conversions | 13,365,052 | |||
Common Stock, issued, conversions, value | $ 166,970 | |||
Debt Instrument, Accrued Interest | $ 5,557 | |||
Group Settlement #3 | ||||
Common Stock, Par Value | $ 0.00426 | $ 0.0024 | ||
Date of Issuance | Mar. 1, 2015 | Apr. 1, 2015 | ||
Common Stock, issued | 16,100,000 | 6,000,000 | ||
Accounts and notes payable, settlement | $ 68,508 | $ 14,400 | ||
Debt Conversion #2 | ||||
Common Stock, Par Value | $ 0.0108 | |||
Date of Issuance | Mar. 1, 2015 | |||
Common Stock, issued, conversions | 24,373,736 | |||
Common Stock, issued, conversions, value | $ 138,113 | |||
Debt Instrument, Accrued Interest | $ 4,013 | |||
Group Settlement #10 | ||||
Common Stock, Par Value | $ 0.0024 | |||
Date of Issuance | Dec. 1, 2015 | |||
Common Stock, issued | 7,500,000 | |||
Accounts and notes payable, settlement | $ 18,000 | |||
Group Settlement #5 | ||||
Common Stock, Par Value | $ 0.00698 | |||
Date of Issuance | Jun. 1, 2015 | |||
Common Stock, issued | 10,118,865 | |||
Accounts and notes payable, settlement | $ 70,613 | |||
Group Settlement #6 | ||||
Common Stock, Par Value | $ 0.00336 | |||
Date of Issuance | Aug. 1, 2015 | |||
Common Stock, issued | 8,000,000 | |||
Accounts and notes payable, settlement | $ 26,800 | |||
Group Settlement #8 | ||||
Common Stock, Par Value | $ 0.00198 | |||
Date of Issuance | Sep. 1, 2015 | |||
Common Stock, issued | 5,482,288 | |||
Accounts and notes payable, settlement | $ 10,855 | |||
Group Settlement #9 | ||||
Common Stock, Par Value | $ 0.00192 | |||
Date of Issuance | Nov. 1, 2015 | |||
Common Stock, issued | 9,000,000 | |||
Accounts and notes payable, settlement | $ 17,280 | |||
Group Settlement #4 | ||||
Common Stock, Par Value | $ 0.00402 | |||
Date of Issuance | May 1, 2015 | |||
Common Stock, issued | 7,400,000 | |||
Accounts and notes payable, settlement | $ 29,748 | |||
Group Settlement #7 | ||||
Common Stock, Par Value | $ 0.003 | |||
Common Stock, issued | 7,000,000 | |||
Accounts and notes payable, settlement | $ 21,000 |
Acquisition of Xtreme Technol35
Acquisition of Xtreme Technologies, Inc. - Schedule of Estimated Fair Value of Assets and Liabilities Acquired (Details) - USD ($) | Sep. 30, 2015 | Jan. 13, 2015 | Dec. 31, 2014 |
ASSETS | |||
Total current assets | $ 288,172 | $ 585,483 | |
Manufacturing equipment, net | 129,161 | 11,149 | |
Intangible assets, net | 1,080,051 | 4,509 | |
Total assets | 1,548,409 | 750,911 | |
LIABILITIES AND STOCKHOLDERS DEFICIT | |||
Total current liabilities | 5,440,167 | $ 2,643,808 | |
Xtreme SPA 1 | |||
LIABILITIES AND STOCKHOLDERS DEFICIT | |||
Purchase Price | 2,050,000 | ||
Xtreme Acquisition 1 | |||
ASSETS | |||
Intangible assets, net | $ 1,400,000 | ||
Xtreme | |||
ASSETS | |||
Total current assets | $ 144,112 | ||
Manufacturing equipment, net | 91,431 | ||
Intangible assets, net | 1,400,000 | ||
Goodwill | 658,187 | ||
Total assets | 2,293,730 | ||
LIABILITIES AND STOCKHOLDERS DEFICIT | |||
Total current liabilities | 243,730 | ||
Purchase Price | $ 2,050,000 |
Acquisition of Xtreme Technol36
Acquisition of Xtreme Technologies, Inc. - Schedule of Unaudited Pro Forma Consolidated Results of Operations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenues | $ 199,320 | $ 6,665 | $ 800,571 | $ 105,676 |
Loss from operations | $ (1,423,026) | $ (381,057) | $ (2,349,446) | $ (929,726) |
Net Loss per share - basic and diluted | $ (0.01) | $ (0.02) | $ (0.02) | $ (0.02) |
Weighted average number of shares outstanding- basic and diluted | 169,231,116 | 70,558,287 | 137,263,440 | 76,557,282 |
Xtreme SPA 1 | ||||
Revenues | $ 804,676 | $ 989,844 | ||
Loss from operations | $ (1,792,303) | $ (1,658,811) | ||
Net Loss per share - basic and diluted | $ (0.01) | $ (0.02) | ||
Weighted average number of shares outstanding- basic and diluted | 181,985,547 | 74,045,606 |
Acquisition of Xtreme Technol37
Acquisition of Xtreme Technologies, Inc. (Details Narrative) - USD ($) | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Jan. 13, 2015 | Dec. 31, 2014 | |
Intangible assets, net | $ 1,080,051 | $ 4,509 | ||
Series C Preferred Stock Designated, Stated Value | $ 1 | |||
Trade Names | ||||
Intangible Asset Useful Life | 3 years | |||
Xtreme Acquisition | ||||
Amortization Expense | $ 102,571 | $ 0 | ||
Series C Preferred Stock Designated, Stated Value | $ 1 | |||
Preferred Stock, Series C, to be issued | 1,425,000 | |||
Patents | ||||
Intangible Asset Useful Life | 7 years | |||
Xtreme SPA 1 | ||||
Series C Preferred Stock Designated, Stated Value | $ 1 | |||
Preferred Stock, Series C, to be issued | 1,425,000 | |||
Xtreme Acquisition 1 | ||||
Intangible assets, net | $ 1,400,000 | |||
Amortization Expense Remainder Of Fiscal Year | 24,107 | |||
Amortization Expense, Year Two | 192,857 | |||
Amortization Expense, Year Three | 192,857 | |||
Amortization Expense, Year Four | 167,857 | |||
Amortization Expense, Year Five through Nine | 142,857 | |||
Amortization Expense, After Year Five | 71,429 | |||
Intangible assets, | 1,080,051 | |||
Series C Preferred Stock Designated, Stated Value | $ 1 | |||
Preferred Stock, Series C, to be issued | 1,425,000 | |||
Xtreme | ||||
Intangible assets, net | $ 1,400,000 |
Subsequent events (Details Narr
Subsequent events (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Common Stock, Par Value | $ .001 | $ 0.001 | |
Preferred Stock, Series D, Par Value | $ 0.001 | ||
Preferred Stock, Series D, Designated | 4,000,000 | ||
Preferred Stock, Series D, description | The series is convertible into common stock of the Company at a conversion of ten (10) shares of common stock for every Series D Preferred Stock. In addition, holders of the series can vote in matters submitted for vote by the shareholders at the rate of twenty-five thousand (25,000) votes for each share held. | ||
Consultant #1 | |||
Payment to Consultant | $ 120,000 | ||
Preferred Stock, Series D, To be Issued | 1,000,000 | ||
CEO | |||
Officer Compensation | $ 120,000 | ||
Preferred Stock, Series D, To be Issued | 1,000,000 | ||
Group Settlement #10 | |||
Date of Issuance | Dec. 1, 2015 | ||
Common Stock, issued | 7,500,000 | ||
Accounts and notes payable, settlement | $ 18,000 | ||
Common Stock, Par Value | $ 0.0024 | ||
Group Settlement #9 | |||
Date of Issuance | Nov. 1, 2015 | ||
Common Stock, issued | 9,000,000 | ||
Accounts and notes payable, settlement | $ 17,280 | ||
Common Stock, Par Value | $ 0.00192 |